• S and P 500 Market Analysis 1-09-13

Pre-market update (updated 8:30am eastern):

  • European markets are trading 0.3% higher.
  • Asian markets traded 0.5% higher.. 
  • US futures are trading slightly higher ahead of the opening bell.. 

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

Technical Outlook (SPX):

  • Nice morning sell-off yesterday followed by a respectable recovery wiping out half the losses before the close. 
  • Yesteday’s sell-off continued a two-day pullback. 
    • Overall the pullback looks very orderly, and when you have the kind of afternoon rally we saw  yesterday, it’s a good sign that we aren’t facing any kind of market top here. 
  • Volume was on par with recent levels
  • Market remains overbought on nearly every time frame. 
  • Notice the channel that we are currently trading in off of the November lows, and how recent selling has come after touching the upper band. 
  • For the bulls, a pullback to 1448ish would keep things very bullish, but there remains the possibility that we could pullback to the trend-line off of those November lows. That price level would be somewhere around 1408 to 1415 as it stands currently. 
  • VIX continues to weaken for a sixth straight day, dropping us further below 14. This is happening despite three out of the last four trading sessions finishing in the red. It shows that there is not much fear right now in this market of possible downside swings. 
  • There’s really no significant level of resistance for the market above 1466 until you get to 1501. 
  • It will take a significant move, but below 1398, the trend will be bearish. 
  • Be aware of upcoming news events and discussions that will permeate the markets: Debt Ceiling Debate, Fiscal Cliff Part II, Employment Recovery. 
  • There is still a huge gap on the SPY chart that ultimately needs to be filled. 
  • 30-minute chart looks toppy.

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 1-09-13

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