• SP 500 Market Analysis 11-21-14

Pre-market update:

  • Asian markets traded 0.3% higher.
  • European markets are trading 2.1% higher.
  • US futures are trading 0.8% higher ahead of the market open. 


Economic reports due out (all times are eastern): Kansas City Fed Manufacturing Index (11)

Technical Outlook (SPX):

  • Heavy gap up today after China issued a surprise rate cut. 
  • Don’t add any new long positions until it becomes obvious that the bulls can hold on to the strength and not allow a gap fill to ensue. 
  • 10-day moving average continues to bring in the dip buyers. The last four times we have tested the 10-day, has led to heavy buying thereafter. 
  • Volume still remains below average. 
  • SPX 30-minute chart shows price moving out of recent consolidation. 
  • VIX dropped 2.7% to 13.58. Watch how weak the VIX is this morning for a gauge on how reliable this market rally should be today. 
  • If SPX breaks 2030 it would represent a break of key support and likely more weakness would follow. 
  • 5-day and 10-day moving average are converging which makes a break of both in one day much more possible and more significant too. 
  • Historically trend-lines that are steeper/greater than 45 degrees are nearly impossible to maintain over an extended period of time. 
  • 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:

Chart for SPX:

SP 500 Market Analysis 11-21-14

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