Pre-market update:

• Asian markets traded 1.4% lower.
• European markets are trading 0.8% lower.  
  
• US futures are trading flat ahead of the bell. 
  

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

Technical Outlook (SPX):

• Major sell-off yesterday that took us below the 8/21 lows of this market forming a short-term lower-low. 
• On the other hand, we sold off down to major rising support off of the November 2012 trend-line and held it. Today will be critical for whiether we hold it again. 
• If the rising trend-line breaks the next critical level of support is the 1560 level of the SPX which was the last previous major higher-low. 
• VIX spiked nearly 12% to 16.77. 
• Volume was higher than anything we saw over the past 3 days. 
• The last two gap downs have held their own very well with no attempt from the dip-buyers to reverse its action. 
• SPX needs to finish above 1633 to hold the rising trend-line off of the November lows from last year. 
• 1687 represents the next major level of resistance for the SPX to break through which previously was the consolidation support level for the market from 7/16 – 8/14.
• I still maintain that the best strategy for this market is to continue trading to the long side in this market. Sell-offs in this environment are quick and hard to capitalize on – better off holding on to the long side and buying on the dips.
• 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 no new positions yesterday. 
• Sold PAAS yesterday at 12.99 for a 3% loss. 
• Currently 80% long / 20% cash.  
• Current Longs: URS at 49.85, BMRN at 64.50, FLR at 65.99, WYNN at 139.08, XEC at 79.75, FDX 108.18, CMI at 123.48.
  
• Will wait on this market today to see whether the bulls come in and provide support at key price levels. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: