Pre-market update:

• Asian markets traded 1.1% higher.
• European markets are trading 1.6% higher.
  
• US futures are trading 0.2% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): PMI Manufacturing Index Flash (9:45), Existing Home Sales (10), Leading Indicators (10)

Technical Outlook (SPX):

• Huge day for the market in terms of seeing the first signs of the bears being short-squeezed. The previous three days of the market rally, I didn’t see any of this behavior unfold. 
• Strong potential for additional upside, particularly if SPX can get back above 2064 and stay there. At that point a higher-high is formed and creates a significant problem for the bears. 
• In three of the last four months we’ve seen the first half of the month trade noticeably lower, followed by a significant rally during the second half of the month to recover all or nearly all of the month’s losses. The exception was the month of November.
• By breaking the 2064 price level on SPX, the head and shoulders pattern on the daily chart is in jeopardy of being nullified.
• It’s not wise to try and short a market bounce like we saw yesterday. Once the squeeze starts it can last days before bulls run out of ammunition.
• SPX 30 minute chart continues to provide a series of consecutive higher-highs and higher-lows. Very healthy.
• VIX dropped 13% down to 16.39, which is its lowest level of the year.
• Volume was much higher than average – a strong sign for the market.
• SPX broke above the down trend off of the December highs yesterday.
• Perfect channel that has formed over the last two months that is worth watching going forward as Friday’s bounce occurred right when it was tested. 
• The market doesn’t care about the economy nor earnings. That is not what is driving it. The market only cares about what the Fed is doing to keep equities propped up. 

My Trades:

• Closed out HAL yesterday at $40.80 for a 0.8% gain. 
• Added three new long position to the portfolio yesterday.
• Did not close out any positions yesterday. 
• Will consider adding 1-2 new positions today. 
• Remain long CTSH at $55.30. 
• 40% Long / 60% cash. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: