Pre-market update:

• Asian markets traded 0.1% lower. 
• European markets are trading 0.2% lower. 
• US futures are trading 0.6% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): MBA Purchase Applications (7), Consumer Price Index (8:30), Treasury International Capital (9), Housing Market Index (10), Beige Book (2)

Technical Outlook (SPX):

• One of the choppier trading sessions that we’ve seen in quite some time on the SPX yesterday. While the range might not have been impressive, there were multiple 10 point or near 10 point swings throughout the day. 
• The resistance, as shown by the dotted line below, is causing some resistance for the SPX, but should see price gap above it this morning. 
• 1691 is the key price level for the bulls to hold today as it represents the long-term trend-line off of the November 2012 lows. 
• Volume picked up yesterday and was much higher than what we saw the previous two green days. 
• SPX remains firmly entrenched in overbought territory. 
• The bearish wedge formed on the SPX since the May highs is concerning to me and resistance there stands at 1735 and moving slightly higher each day. 
• Experiencing some resistance the last two-days in the SPX from the August highs at 1709
• Big day for the VIX as it rose 16% to 18.66. 
• There is a strong chance, at any moment for news, rumors, false rumors to rock the market in the opposite direction with the ongoing talks in Washington between Republicans and Democrats. 
• If we truly plan on on holding Wednesday’s lows, then this market bounce will be very strong, much like we saw off of recent lows in late June and late August. 
• A move below 1627 would mark a new lower-low in the market and confirm a downtrend for the first time since the November 2012 lows were established. 
• Markets don’t care about the economy nor earnings. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up. 

My Opinions & Trades:

• Did not add any new positions yesterday. 
• Did not close out any existing positions yesterday. 
• Despite current conditions, the likelihood that Congress will not resolve stalemate beyond the alleged default deadline is a low probability. One side will cave. Remember  you’re dealing with a bunch of cowards in DC. 
• Currently 60% long / 40% cash.  
• Current Longs: GNW 12.82, ACAS at 13.67, LYV at 18.80, CMI at 133.25, NWL at 27.84, FCX at 33.80. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: