• SP 500 Market Analysis 4-08-13

Pre-market update (updated 9am eastern):

  • European markets are trading 0.4% higher.
  • Asian markets traded in a very wide and mixed range but up on average of 1.1%.
  • US futures are slightly higher ahead of the bell. 

Economic reports due out (all times are eastern): None

Technical Outlook (SPX):

  • Like most big gap-downs tend to be, Friday resulted in another buy the gap opportunity, that saw the market recover nearly 2/3’s of it’s losses. 
  • Despite the SPX finishing lower, the VIX finished lower as well, closing the day at 13.89.
  • Overall, I would say that the day resulted in a dismal failure for the bears and an opportunity that was squandered away. 
  • It proves as well that Dip-Buying is still very alive and well in this market. 
  • We are also finding ourselves back in the consolidated range that we were inside of for much of March. 
  • SPX is no longer overbought. 
  • Volume was notably higher on Friday. 
  • If we are to experience a significant sell-off today, watch the 1532 level which represents the upward rising channel underneath the price action as well as the 50-day moving average. 
  • Any close below 1538, would breakdown the market below the consolidation level and usher in a new wave of bearishness.
  • On Friday, this level was tested and it held. 
  • I’d give the market a good hour of trading before considering any new trades today. 
  • 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. 
  • Ideally, we are still in need of a more sustained pullback to 1500-1510 level simply for the reason, that it would once again bring stocks back to a place with more ideal setups and opportunities for trading. 
  • Both channels (July October 2012) and the price channel we are currently in are very similar in nature. 
  • We haven’t seen a market pullback in excess of 4% since October/November time-frame. 

My Opinions & Trades:

Chart for SPX:

SP 500 Market Analysis 4-08-13

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