• S and P 500 Market Analysis 2-15-13

Pre-market update (updated 8am eastern):

  • European markets are trading -1.8% lower.
  • Asian markets traded -1.8% lower. 
  • US futures are trading slightly lower ahead of the opening bell. 

Economic reports due out (all times are eastern): Consumer Price Index (8:30am), Jobless Claims (8:30am), PMI Manufacturing Index Flash (8:58am), Existing Home Sales (10am), Philadelphia Fed Survey (10am), Leading INdicators (10am), EIA Natural Gas Report (10:30am), EIA Petroleum Status Report (11am)

Technical Outlook (SPX):

  • Heavy, heavy sell-off yesterday that pushed us right through the 10-day moving average. 
  • 20-day moving average is set to be tested at 1510. This will be the first legitimate test of the 20-dma this year. 
  • Another sell-off today that takes  us below support at 1495 (16 points away) would likely lead us to testing the lower, rising channel (see below) at 1475. 
  • The last time we experienced a heavy sell-off in the markets it was met with an equal bounce the following day. 
  • Volume was above average and supported the overall market move in regards to the intensity of it. 
  • The VIX popped up nearly 20% yesterday from the low 12’s up to the mid-14’s, showing that volatility is starting to creep back into this market. 
  • 30-minute chart of SPX shows an index breaking below major support levels in the short-term. 
  • Much of the rally, outside of the initial burst on 12/31 & 1/2 has been marked by a drift higher rather than rampant surges and large gaps higher. 
  • A break of 1495 is absolutely key in this market to get the bears motivated. 
  • A pullback to 1475 would likely satisfy as a pullback to the lower rising channel, and be considered healthy for this market. 
  • We haven’t seen a market pullback in excess of 4% since October/November time-frame. 
  • There’s not much in the way overhead resistance that will keep this market from hitting all-time highs from a technical analysis standpoint. 
  • The channel that we are currently trading in looks very similar to the channel that we traded in last year from June through September. 

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 2-15-13

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