Pre-market update:

• Asian markets traded -1.7% lower.
• European markets are -0.4% lower. 
• US futures are trading 0.3% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): New Home Sales (10), Dallas Fed Manufacturing Survey (10:30)

Technical Outlook (SPX):

• SPX drastically changed its colors Friday when it dropped 2.1% in one trading session. 
• With that move, the SPX closed below and outside of 3 standard deviations of 20-day moving average (using Bollinger Bands).
• That has rarely ever happened and last time I saw it occur was May 2010 which saw a significant bounce occur. 
• Every time the lower band has been tested (not necessarily broken) we have seen significant bounces come within a few days of this happening. 
• I’m not a huge fan of chasing short positions here in this market situation. I would rather play the bounce first and then use the bounce to position new shorts. 
• The boxed consolidation that we had been trading in for over a month has been broken as well as the trend-line off of the October lows. 
• Until 1772 is broken there is not a significant lower-lower put in place for SPX.
• SPX sliced right through the 50-day moving average. 
• Bulls need to do whatever it can to close in the green today.
• SPX in oversold territory.  
• VIX hit an intraday high of 18 on Friday. January, which is often used as a barometer for the rest of the year, in terms of sentiment, remains firmly in the red for the month. 
• 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:

• Added one new position on Friday.
• Sold KKR at $25.19 for a 2.8% loss. 
• Remain long BRO at 32.06
• Based on market action, I will look to add 1-2 new positions today. 
• Long 30% / Cash 70% 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: