Pre-market update:

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

Economic reports due out (all times are eastern): MBA Purchase Applications (7), Consumer Price Index (8:30), Retail Sales (8:30), Business Inventories (10), Existing Home Sales (10), EIA Petroleum Status Report (10:30), FOMC Minutes (2)

Technical Outlook (SPX):

• Yesterday marked the first time we saw two consecutive days of selling since 10/30 – 10/31. 
• A third day of selling in-a-row today would be he first time that has happened since mid-September. 
• 1786 will be a key short-term rising support level as it represents the trend-line off of the October lows. If that level breaks the next logical support level comes in at 1771 and then 1750 thereafter. 
• Volume remains on the light side during the 2-day sell-off which brings into question the legitimacy of the mini-pullback. 
• The bears, if they are really planning on making a showing of the recent selling, needs to have a heavy move, ideally in excess of 1% to the downside. Failure to do this makes it very difficult to take any selling that we see seriously, because the pullback will lack any real fear in the bulls. 
• Always expect the dip to be bought at some point and plan accordingly with any shorts that you may have. 
• SPX has traded higher for six weeks straight on the weekly chart. 
• Also problematic for the SPX is the fact that we are trading outside the upper Bollinger Band on the weekly chart. Historically when this happens, particularly after two straight weeks of such, the likelihood for a near-term sell-off increases dramatically. 
• Solid uptick in VIX saw the index rise to 13.68 and 2.2%. 
• SPX 30-minute chart looks poised a new lower-low. 
• The 20-day moving average remains as a solid barometer for gauging the direction and health of the 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:

• Sold LLTC yesterda at 41.70 for a 1.3% gain. 
• Sold GPC yesterday at $81.99 for a 0.9% gain. 
• Sold ETFC yesterday at 17.46 for a 2.6% loss
• Did not add any new positions to the portfolio yesterday. 
• I’m careful about the prospects of adding additional long positions in the current market environment. 
• Wait at least an hour after the market opens before considering a new position today. 
• Currently 10% long / 20% short / 70% cash.  
• Current Longs: CHS at $17.30, 
• Current Shorts:  FFIV at $84.05, MGM at $19.27
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: