• SP 500 Market Analysis 5-28-13

Pre-market update (updated 9am eastern):

  • European markets are trading 1.5% higher.
  • Asian markets traded traded 0.8% higher. 
  • US futures are up strong ahead of the bell. 

Economic reports due out (all times are eastern): S&P Case-Shiller HPI, Consumer Confidence (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am), Dallas Fed Manufacturing Survey (10:30am)

Technical Outlook (SPX):

  • We’ve had only our second three-day pullback of the year in the SPX. The Dow had its first to end the week last week. 
  • If today is to finish in the red, it would be a first for the SPX since late December 2012. 
  • The last two days of selling has shown us that the dip buyers are still around in this market and have bought up the market after setting the intraday lows. 
  • 20-day moving average looks like it may be affording the SPX some support on a short-term basis. 
  • We are well off of overbought levels here. 
  • The bearish volume that we had seen on Wednesday and Thursday of last week, tapered off dramatically on Friday, possibly due though to it being a holiday weekend. 
  • I wouldn’t discount the likelihood of us trading back up towards 1670’s and created a new area of consolidation. 
  • That has been the pattern of late…Consolidation…Big Breakout….Consolidation….Big Breakout…. Rinse/repeat.
  • Gap up for the bulls are not the enemy that gap downs are for bears. 
  • A push below 1597 would be necessary to get the month of May in the red. 
  • The long-term trend-line off of the February lows sits at 1610 today, and likely safe from the reaches of the market for now.
  • 30-minute chart shows a potential double bottom forming. 
  • Drawing a Fibonacci retracement on the most recent market rally, from the April lows, has a 50% retracement at 1604. A 38.2% retracement would be a 1620. 
  • We are up seven straight months, the last time we saw such a rally was when the market bottomed in 2009. 
  • 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. 
  • 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 5-28-13

You Might Like

  • South Korea and its impact on the US stock market.

    South Korea: The Hidden Driver of US Tech Volatility

  • Learn to trade within your means.

    Stop Trying to Hit Home Runs: Start Trading Within Your Means

  • Avoiding traps on stock breakout plays.

    How to Trade Breakouts Without Getting Trapped