• SP 500 Market Analysis 6-12-13

Pre-market update (updated 9am eastern):

  • European markets are trading 0.1% higher. 
  • Asian markets traded 0.7% lower.
  • US futures are trading moderately higher.

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am), Treasury Budget (2pm)

Technical Outlook (SPX):

  • Heavy sell-off yesterday despite early optimism that the weakness would get bought up by the dip buyers. Ultimately that failed. 
  • Its important that if additional weakness is ushered in today, that 1613 on the rising trend-line off of the November lows is held. 
  • Volume of late has been below average, particularly during the two-day sell-off we are in right now. 
  • Since 5/22 the market has finished in the red nine out of the last fourteen times – which is the greatest among of bearishness we’ve seen this year. 
  • Strong correlation between US Market’s and the Japanese markets right now, as the latter is in the midst of a significant sell-off since 5/22. 
  • SPX has come off of oversold conditions, while the VIX is back above 17. 
  • There is the potential that Monday’s highs marked the first lower-high of 2013. 
  • The tendency is to want to get short heavily here, I would advise against it, and wouldn’t rule out the possibility that all of this blows over and the buyers eventually regain interest in this market. 
  • We need to either break Monday’s highs or Thursday’s low to gain a clear understanding for direction in this market. 
  • The 30 minute chart on SPX appears to be consolidating over the two days in a wide range. 
  • Key price support rests at 1601. 
  • 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. 

My Opinions & Trades:

Chart for SPX:

SP 500 Market Analysis 6-12-13

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