Pre-market update:

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

Economic reports due out (all times are eastern): MBA Purchase Applications (7), Wholesale Trade (10), EIA Petroleum Status Report (10:30), FOMC Minutes (2)

Technical Outlook (SPX):

• Major technical breakdown yesterday. 
• SPX broke through the 50-day moving average on Monday with a big follow through and confirmation on Tuesday. 
• Most importantly though is the fact we got our first decisive break of the rising trend-line off of the November 2012 lows. This is a game changing event. 
• The next task for the bears will be to form a lower-low in the market. For that to occur the SPX would have to close below 1627. 
• Janet Yellen will nominated to replace Bernanke as the new Fed chairman. It was a foregone conclusion so its effect on the market today has been minimal. 
• A bounce is definitely possible at this point, but I would not expect it to be anything more than a dead-cat bounce unless proven otherwise. 
• SPX needs a significant move to repair its damage already done. Above 1683 and you reclaim that rising trend-line and it needs to happen now. 
• Volume was stronger during yesterday’s sell-off. 
• We are also back in oversold territory. 
• VIX rose sharply into the 20’s for the first time since June ’13.
• Large Bearish wedge has confirmed as shown below. 
• If a compromise is reached, expect a significant bounce back. 
• 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:

• Added one new short position yesterday. 
• Sold UHS at 76.7 for a 3.9% gain yesterday. 
• Sold MPEL at 32.14 for a 1.7% gain. 
• Sold RDC at 36.25 for a 2.4% loss. 
• Sold GNW at 12.59 for a 1.7% loss. 
• Sold ACAS at 13.44 for a 2.2% loss. 
• I’m content being net short at this point. May add more shorts to the portfolio. 
• Currently 10% long / 30% short / 60% cash.  
• Current Longs: CSE at 11.86
• Current Shorts: STT at 65.83, TIF at 76.07. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: