• SP 500 Market Analysis 5-01-13

Pre-market update (updated 9am eastern):

  • European markets are trading 0.4% higher.
  • Asian markets traded -0.1% lower.
  • US futures are slightly higher. 

Economic reports due out (all times are eastern): MBA Purchase Applications, ADP Employment Report, PMI Manufacturing Index (8:58), Treasury Refunding Announcement (9am), ISM Manufacturing Index (10am), Construction Spending (10am), EIA Petroleum Status Report (10:30am), FOMC Meeting Announcement (2pm)

Technical Outlook (SPX):

  • The SPX finished higher for the 7th time out of the last 8 days. 
  • The first day of the trading month tends to be rather bullish. Last month we finished the first trading session in the red, but the three previous months were all positive. 
  • FOMC Statement comes out today, which can create additional volatility to the markets. Upon its release, there tends to be two false moves in the market price action, followed by a third move that is legitimate. Don’t get sucked into a trade based on the first two moves. 
  • SPX firmly in overbought territory. Yesterday proved that dip buying is still the norm in this market. 
  • We also hit all time closing highs in the SPX yesterday, but there is still a possibility, that we could be forming a double-top in the market right now. A break of 1536-8 would be significant, but not likely to happen anytime soon. 
  • 1569 remains a key rising support level that was formed off of the channel that started back in November. 
  • VIX settled in at 13.5 – we haven’t seen a push lower in this measurement as the market has risen to new highs, instead it has traded sideways. 
  • 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. 
  • Both channels (July October 2012) and the price channel we are currently in are very similar in nature. 
  • 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 5-01-13

    You are unauthorized to view this page.

You Might Like

  • The rise of the retail trader in the stock market.

    The Retail Trading Revolution: How Small Investors Are Reshaping the Stock Market

  • fading the gap

    Fading the Gap: How Large Overnight Moves in SPY and QQQ Play Out During the Trading Day

  • how to trade a bear flag

    How to Trade a Bear Flag