• SP 500 Market Analysis 4-22-13

Pre-market update (updated 9am eastern):

  • European markets are trading 0.7% higher.
  • Asian markets traded 0.9%% higher.
  • US futures are moderately higher ahead of the bell. 

Economic reports due out (all times are eastern): Chicago Fed National Activity Index (8:30am), Existing Home Sales (10am)

Technical Outlook (SPX):

  • A respectable  bounce on Friday that brought us back above the 1551 level on the SPX, that represents the rising trend-line off of the November lows. 
  • For the first time since 12/28/12 we have hit short-term oversold conditions for the market. The previous time, this led to a short term bounce. 
  • The bounce occurred after testing the lower Bollinger Band. 
  • So far the bulls have managed to hold the 1538 on a closing price basis which is a critical support level for this market. 
  • SPX regained the 50-day moving average. 
  • With this mornings gap up, bears need to be very careful that they secure their profits and not allow the bounce to wipe them away. 
  • 1538 is the KEY level for me today. We break 1538 and there is no support until we get under 1500. 
  • VIX dropped down below 15. 
  • 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. 
  • 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 4-22-13

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