Pre-market update:

• Asian markets traded in a wide range from -0.6 to +1.2%
• European markets are trading 0.1% higher.
• US futures are trading 0.2% lower ahead of the market open. 
  

Economic reports due out (all times are eastern): MBA Purchase Applications (7), ADP Employment Report (8:15), Treasury Refunding Announcement (8:30), ISM Non-Manufacturing Index (10), EIA Petroleum Status Report (10:30)

Technical Outlook (SPX):

• SPX managed to bounce yesterday off of the rising trend-line from the August lows. 
• Theoretically, SPX could rally without resistance to 1770. 
• Strong volume showing over the last three days. 
• Bounce wasn’t notably strong – will need to see some follow-through today of equal or greater measure. 
• All throughout the day the bears tried to pounce on the rally and short the market back down as low as they could, but did so without success. 
• Monday’s sell-off was the biggest we’ve seen since 6/20/13. 
• VIX dropped back to 19.11. Price action there at recent highs is similar to previous bottoms in the SPX. 
• Possibe bottoming pattern forming on the SPX 30-minute chart. But only a possibility at this point. 
• Critical support at 1772 was broken Monday and next significant level is all the way down to 1655. 
• A lower-low has now been formed on the SPX chart. 
• The potential for a major short squeeze is very possible – traders are getting sucked into the short trade and it is already becoming very crowded. 
• 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:

• Did not close out any positions yesterday. 
• Added one long position yesterday. 
• Remain long SPLK at 75.00 and MU at 23.19. CAM at 60.40.
• Will consider 1-2 new positions based on market conditions. 
• Long 40% / Cash 60% 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: