Pre-market update:

• Asian markets traded 0.1% lower.
• European markets are trading 1.1% higher. 
• US futures are trading 0.3% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): Employment Situation (8:30), Wholesale Trade (10)

Technical Outlook (SPX):

• SPX has been stuck in a 20 point range over the past 5 trading days – that is tight by any measure. 
• Of late, and last 3 days in particular, SPX has been hovering over the 10-day moving average. 
• I think it starts becoming important here for price action to breakout and above the aforementioned range and start challenging the highs again. 
• The current price pattern comes across to me as having the potential to get very bearish very fast if the bulls don’t remain steadfast. 
• Last two market sessions have been extremely choppy. 
• It could be that we are seeing ‘zero’ market direction at the moment due to the torch being passed from Bernanke to Yellen for the Fed Chair. Once that transition is complete, traders may become more comfortable with the market. 
• A break below 1823 could become a huge problem for the SPX short-term as it would create a new lower-low for the index. This is where the bears should have their sights set on. 
• Volume remains average for now. 
• 30-minute chart has a bit of an inverse head and shoulders pattern that has formed since the beginning of the new year. 
• VIX rose ever so slightly yesterday to 12.89.
• Once 1849 clears, SPX should see a very strong push higher thereafter. 
• Slightly outside of overbought levels on SPX. 
• 1809 from longer-term perspective becomes the critical price 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 1806 – 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:

• Added 1 additional position to the portfolio yesterday. 
• Closed out JDSU at $12.74 for a 2% loss. 
• Remain long EWBC at 34.52, GT at 23.81, SBGI at 36.60, CAT at 89.14, AIG at 51.54, CX at 11.80.
• I will look to add 1-2 new positions today. 
• Long 70% / Cash 30% 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: