Pre-market update:

• Asian markets traded 0.8% higher. 
• European markets are trading 0.3% lower. 
• US futures are trading 0.5% lower. 

Economic reports due out (all times are eastern): Treasury Budget (2)

Technical Outlook (SPX):

• SPX gave up the gains and then some from Friday.  
• The downside of Friday’s sell-off is that we are a shade below the support line off of the 7/16 closing lows. The slightly rising support sits at 1693. 
• Looking at another gap down to begin the week. These gap-downs tend to offer little in the way of dip-buyers, in fact it tends to invite them to the party. Seldom do we close at the lows on these types of days. 
• The days in which we’ve seen selling this month (4 in total) has been very light. More like a lack of buying interest than a true desire to push the market’s lower and liquidate positions. 
• 1676 will continue to be the bigger-picture support level. Break and close below it, and you have a new lower-low in this market. 
• Well off of overbought levels. 
• VIX popped back into the 13’s – 13.41 to be exact. 
• Note the head and shoulders pattern forming on the 30-minute chart. 
• This market action is nearly identical to the action we saw from 3/6 through 4/8. That pattern ultimately led to a move higher in the market, though it was rocky at times. 
• Shooting stars on the VIX indicator has recently been a great indicator of a potential rally in the coming days. We saw that occur on Wednesday. 
• Of importance is the 1676-1685 area. A healthy market won’t creep below 1685. However, a complete shift in the market would take place if SPX were to close below 1676. 
• There is little, and I mean almost no reason to be short this market right now. None. Not with the Fed’s policy or until that changes. 
• 1676 is a very key level for this market in the case of a sell-off. That would create a new lower-low. 
• I remain a buyer in this market. The opportunities to swing short are far too unpredictable, choosing to focus on the long side is the best way to manage risk and maximize profits at this juncture. 
• 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:

• Sold HRB at 31.40 for a 4% gain. 
• Added one additional position to the portfolio on Friday. 
• Currently 80% long/20% cash.  
• Current Longs: CAB at 70.38, PNK at 21.59, CMI at 121.60, ASML at 89.63, MU at 13.86, HUM 91.08, CS at 29.91. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: