Pre-market update:

• European markets are 0.3% higher. 
• Asian markets traded 1.7% higher.
• US futures are trading moderately higher.  

Economic reports due out (all times are eastern): Jobless Claims (8:30am), Personal Income and Outlays (8:30am), Pending Home Sales (10am), EIA Natural Gas Report (10:30am), Kansas City Fed Manufacturing Index (11am), Farm Prices (3pm)

Technical Outlook (SPX):

• After yesterday’s rally and close above 1603, the next major obstacle will be trying to push through 1608 which represents a heavy load of resistance. 
• As well as the 10, 20 and 50-day moving averages that all lie between 1612 and 1619. 
• Originally, I thought we would just rally to 1608 and then experience another market drop and continuation of the downtrend, but the more I considered market conditions, the more I believed that original belief was flawed. 
• Previous sell-offs always had a pipeline of bad news. This sell-off does not. The only negative news piece is really last week’s FOMC statement and presser. 
• For the downturn to persist, there needs to be greater negativity in this market. Right now it isn’t there. 
• The last two closes for trading has resulted in the bears trying to load up on shorts at the close. Yesterday’s though seemed much more muted than the day before’s. 
• This market move seems to be much more than a typical bounce and one that is likely to result in the further squeezing of bears and their positions. 
• I simply do not think the bears can keep driving this market lower without some form of a catalyst, besides the tapering comments made before by the FOMC. 
• Possible resistance could be had at 1608, but it actually looks like we are going to open above that level. 
• Volume continues to trade heavier over the last five sessions. 
• We are off short-term oversold levels. 
• We have now established a lower-high and lower low for the first time in this market for 2013. 
• VIX dropped back into the 17’s. 
• The S&P 500 is on the verge of having its first down month of 2013. Needs to close above 1630 in the next two days to avoid that. 
• 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 GOOG at 872.67
• Added V at 182.15.
• Current Longs: PCYC at 80.56, WLP at 80, CME at 76.35, LPI at 20.28, GS at 153.16
• I probably only want to add a max of 10% more in long exposure today. Could add more than just one position if I close out some others first. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: