Pre-market update:

• Asian markets traded 0.2% higher.
• European markets traded 1.0% higher. 
• US futures are trading 0.3% higher. 
  

Economic reports due out (all times are eastern): MBA Purchase Applications (7), PMI Manufacturing Index Flash (8:58), New Home Sales (10), EIA Petroleum Status Report (10:30) 

Technical Outlook (SPX):

• A much needed day in the red for the market yesterday. 
• Yesterday’s close will put the market right on the steep rising trend-line off of the 6/24 lows. It’s likely we will break this trend-line sooner rather than later and put in a more legitimate higher-low. 
• 10-Day Moving average has been followed by the markets as well and also offers the possibility of short-term support as well at 1685. 
• To put this latest run in the market in perspective the SPX has rallied in the last month or 30 days 132 points higher off of the lows. That is a pace that is unsustainable, and the notion of a pullback to bring the prices back to a healthy medium becomes more realistic. 
• Also during that time, the SPX has finished higher 16 out of 20 days ~ un-freakin’-believable. 
• There is plenty of room overhead for SPX to rally – roughly 29 points worth without hitting any heavy resistance, though I do suspect some once 1700 is tested. 
• Key support for the index on a short-term basis is at 1671. Break that level, and we’ll likely see a more extended pullback. 
• Slow and steady rise into 1700 – the key is that the SPX doesn’t violently sell-off as it nears 1700. Consolidation underneath the 1700 level is completely fine for the SPX. 
• Pay no attention right now that the market is over-extended. Such conditions rarely matters with the Fed’s involvement in the markets. 
• VIX is at 12.66. 
• This uptrend looks nearly the same as the one we saw on 4/19 and lasted until 5/19. I’m curious if it will lead to a similar extended pullback as a result. 
• 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:

• Added SOHU at 67.91 yesterday. 
• CL reports tomorrow – don’t hold through earnings. 
• Current Longs: WU at 17.45, MENT at 20.55, CL at 58.84, HRB at 30.19, SJM at 104.63, BDX at 99.98, GOOG at 887.47
• May look to take gains in stocks that are stagnant and replace them with better setups today. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: