Pre-market update:

• Asian markets traded 2.5% lower. 
• European markets are trading 0.3% lower. 
• US futures are trading 0.3% lower. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7),EIA Petroleum Status Report (10:30), Consumer Credit (3)

Technical Outlook (SPX):

• Depsite the SPX violating the 1700 level on the SPX, the index is still in good shape. 
• Of much more importance is the 1676-1685 area. A healthy market won’t creep below 1685. However, a complete shift in the market would take place if SPX were to close below 1676. 
• Therefore a heavy sell-off at all costs must be avoided by the bulls, otherwise, there are far worse implications than one day of losses. 
• Also broken yesterday was the rising trend-line off of the 6/24 lows. But in yesterday’s trading plan, I mentioned how this would ultimately happen in order that the rising trend-line would flatten out and lose some of its extreme steepness. 
• A silver lining for bulls was the fact that the buyers came in at the 10-day moving average and held it. 
• Volume picked up a slight bit from what we saw on Monday. 
• 30-minute chart shows its intraday trend-line off of 6/24 lows has also been broken. 
• Once we become overbought on the SPX as we are now, we tend to stay there for quite a while. 
• There is little, and I mean almost no reason to be short this market right now. None. Not with the Fed’s policy or until that changes. 
• 1676 is a very key level for this market in the case of a sell-off. That would create a new lower-low. 
• VIX spiked 7.4% to 12.7.
• I remain a buyer in this market. The opportunities to swing short are far too unpredictable, choosing to focus on the long side is the best way to manage risk and maximize profits at this juncture. 
• Markets don’t care about the economy. 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:

• Sold WHR at 133.53 for a 2.1% gain. 
• Managed to add one new position yesterday. 
• Currently 90% long/10% cash.  
• Current Longs: COG at 77.21, GS at 167.50, BA at 106.64, ASML at 89.63, HRB at 30.19, SJM at 104.63, HUM 91.08, BLK at 285.50. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: