Pre-market update (updated 9am eastern):

• European markets are trading mixed/flat..
• Asian markets traded in a wide range from -0.6% to +2.0%.
• US futures are trading slightly higher ahead of the opening bell.

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Housing Starts (8:30am), Redbook (8:55am)

Technical Outlook (SPX):

• First time we’ve seen a multi-day sell-off in the market in nearly a month (2/20-21).
• Disappointing day overall for the bears that saw the gap down filled in quick order. Considering overnight futures, the S&P rallied 25 points off of the overnight lows before ‘so-so’ drop into the close.
• Volume in the SPY has been higher in the last two days than what we have become accustomed to seeing.
• VIX spiked 18% which is much more than what we are used to seeing out of similar moves, which signifies that there is growing fear, and that the market may in fact be becoming suddenly risk adverse.
• The SPX has yet to experience 3-straight days of selling since 12/21, so the bears have a tall order in front of it today.
• Be cautious of adding/piling on new short positions today. Once the market starts to bounce, that is when you need to be proactive and get out. The bounces are going for a much longer period of time and quickly erasing the market weakness quickly.
• The nearest  short-term support level for this market lies at 1514. At which point if that breaks, a test of the rising down channel would be in order at 1511.
• 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.
• Also the amount of margin being used to buy stocks are at levels that historically have led to notable reversals in the market.
• SPX remains extremely overbought in the short-term.
• Significant bearish divergence on the T2108 as the market is putting in recovery highs, the T2108 (% of stocks trading above their 40-day MA) is significantly lower.
• 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:

• Shorted RCL at $33.57.
• Closed HCL fat 24.62 for a -1.5% loss.
• Remain Long SLV at $27.97, short PETM at $62.48.
• Remaining patient at these elevated price levels – not going to force position that aren’t there.
• Here is my real-time swing-trading portfolio and past-performance

Chart for SPX: