Pre-market update:

• Asian markets traded 1.1% higher.
• European markets are trading 0.2% lower. 
• US futures are trading flat ahead of the market open. 
  

Economic reports due out (all times are eastern): MBA Purchase Applications (7), ADP Employment Report (8:15), EIA Petroleum Status Report (10:30), FOMC Minutes (2), Consumer Credit (3)

Technical Outlook (SPX):

• Solid bounce out of the market yesterday and first positive trading session of 2014. 
• Once 1849 clears, SPX should see a very strong push higher thereafter. 
• Volume is steadily getting strong after being insanely low the last two weeks of the trading year. 
• SPX also re-captured the 10-day moving average which is a great indicator of direction but of late not a great area of support for price. 
• The problem for the bears is that the 5 down days had just minimal losses in total, indicating little fear in this market and a likelihood that this is a mere light volume pullback and nothing else. 
• The 10-day moving average going forward shouldn’t be relied on much as numerous failures has plagued it without any support since December. Let it re-establish itself as a support overlay before considering it again. 
• Slightly outside of overbought levels on SPX. 
• VIX dropped to 12.92 yesterday. 
• VIX has been great of late for using divergences to market reversals. 
• 1809 going forward becomes the critical level in the short-term that the SPX must not drop below. 
• January is starting off in much the same way as December 2013 did – so keep that in mind. 
• Trend-line support off of the October lows lies at 1801 – and currently out of reach for the bears. 
• There is absolutely no reason at all to be net-short this market. 
• 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:

• Sold FLS at 76.86 yesterday for a 6.4% gain. 
• Added one new position yesterday. 
• Remain long EWBC at 34.52, JDSU at 13.00, GT at 23.81, SBGI at 36.60.
• I expect to add 1-2 new positions today. 
• Long 50% / Cash 50% 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: