Pre-market update:

• Asian markets traded 1.2% higher. 
• European markets are trading 0.6% higher.
• US futures are trading 0.6% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): Employment Situation (8:30), Consumer Credit (3)

Technical Outlook (SPX):

• SPX continued its bounce yesterday and pushed above 1772 and into the resistance zone between 1772 and 1794. 
• Finished a fraction below the 10-day moving average, but with today’s strength it should push through it. 
• If there were ever an opportunity to push the SPX lower today, the bad employment number and miss was it on a silver platter, instead we are looking at a 10+ point gap up at the open. 
• Despite the largest sell-off in over 7 months on Monday, the SPX is actually in reach to finish higher on the week – which would be the first time in four weeks. 
• 30- minute chart of the SPX continues to rally off of the double bottom. 
• Volume is averaging out some in the past two days. 
• VIX continues to drop hard – over 13% yesterday and down to 17.23.
• If the bears are going to reverse the recent tide of selling, it needs to do so before allowing the bulls to cross 1794. 
• If the bears get squeezed out of their positions today, there is plenty of ammunition there to really push the markets significantly higher. It is all about inducing a strong level of fear that they will lose their profits if they don’t cover. 
• Monday’s sell-off was the biggest we’ve seen since 6/20/13. 
• A lower-low has now been formed on the SPX chart. 
• The potential for a major short squeeze is very possible – traders are getting sucked into the short trade and it is already becoming very crowded. 
• 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:

• Did not close out any positions yesterday. 
• Added one additional long yesterday. 
• Remain long SPLK at 75.00 and MU at 23.19, BHI at 56.98, GA at 11.07, BAS at 17.15. 
• Will consider 1-2 new positions based on market conditions. 
• Long 50% / Cash 50% 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: