Pre-market update (updated 8:30am eastern):

• European markets are trading -0.3% lower. 
• Asian markets traded 1.0% higher. . 
• US futures are trading slightly lower ahead of the opening bell. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), ADP Employment Report (8:15am), GDP (8:30am), EIA Petroleum Status Report (10:30am), FOMC Meeting Announcement (2:15pm)

Technical Outlook (SPX):

• Significant bullish engulfing candle on the SPY and SPX yesterday that wiped away the previous day’s losses. 
• The push higher was done on very low volume, which casts doubt on the legitimacy of the move higher. 
• GDP was a surprising -0.1% while expectations were at +1.0%. That is a huge miss on one of the biggest reports, yet the market hardly cares. 
• Fed policies continue to fuel a market higher in a languishing economy. 
• FOMC Statement comes out today at 2:15pm. 
  • Usually there is a knee jerk reaction in the beginning, followed by a hard reversal. Then comes the third move, and that is usually the move that is legitimate and determines the direction the market will run. 
• We continue to ride higher against the rising channel, but not breaking out of it. 
• VIX settled at 13.31 yesterday.
• With this mornings weakness, if the dip buyers fail to prop the market up, could mark the beginning of a long awaited pullback for this market. 
• So far, this January is the best we’ve seen since 1994. The best January in 19 years. 
• The 10-day moving average continues to trail the current price action in the market. That should be the first layer of support on a market pullback. 
• Be very careful about adding long positions to your portfolio today. This market is at major extremes on every time frame, and on every noteworthy indicator. 
• The last three times we were this overbought on the weekly chart, the following weeks we saw anywhere between a 2-4 week pullback in the markets. 
• T2108 posted in the Market Group shows a market that has only been this ‘overbought’ a few times in the past three years. 
• At 1451, you have a significant inflection point for the markets. If the market pulls back and price dips below this price level, there is a significant gap to fill (on the SPY) and will likely see a push below 1430. 
• The channel that we are currently trading in looks very similar to the channel that we traded in last year from June through September. 
• Be aware of upcoming news events and discussions that will permeate the markets: Debt Ceiling Debate, Fiscal Cliff Part II, Employment Recovery. 

My Opinions & Trades:

• Added GM as a short yesteday at $28.44
• Added INGR yesterday at $67.72 as a long
• Closed RDS.B at $74.03 from $72.94 for a 2.8% gain. 
• Coved TEVA at $37.42 from 38.35 for a 1.8% gain. 
• Remain Short TGT at $61.03, HDB at $40.71.
• May add a new short position if we can get some renewed weakness in the market today. 
• Here is my real-time swing-trading portfolio and past-performance

Chart for SPX: