• S and P 500 Market Analysis 3-011-13

Pre-market update (updated 9am eastern):

  • European markets are trading mixed.
  • Asian markets traded 0.2% higher. 
  • US futures are trading moderately higher ahead of the opening bell. 

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

Technical Outlook (SPX):

  • SPX rose on Friday for the sixth straight session and eight out of the last nine. 
  • Rising more than six straight days is a very difficult feat. While this doesn’t happen very often, we actually rose eight straight days earlier this year, though the gains were far less than the gains we saw in this current run. 
  • Coupled with the fact that we are well outside the upper Bollinger-Band, a pullback here makes sense. 
  • Compared to what we saw throughout the week, Friday’s session saw a significant jump in volume. 
  • We are extremely oversold in the short-term. 
  • A possible reversal doji on the SPY daily. 
  • While we can still move higher from here, I believe there is far more risk over the next 2-3 days in doing so. 
  • 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.
  • The weekly chart shows a strong breakout in place. 
  • VIX is back in the 12’s.
  • 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:

S and P 500 Market Analysis 3-011-13

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