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

• European markets are trading +0.6% higher.
• Asian markets traded 1.1% higher. . 
• US futures are trading slightly higher ahead of the opening bell. 

Economic reports due out (all times are eastern): New Home Sales (10am)

Technical Outlook (SPX):

• SPX finished higher for a 7th straight day. finding resistance against the upper rising channel. 
• We haven’t seen in years where the market has finished higher 8 straight days. The odds of a pullback today is much more favorable, despite the market trading higher in the pre-market. 
• Be very careful about adding long positions to your portfolio today. This market is at major extremes on every time frame, and on every noteworthy indicator. 
• The last three time we were this overbought on the weekly chart, the following weeks we saw anywhere between a 2-4 week pullback in the markets. 
• Candle on the SPY and SPX forms a bearish doji-candle, and is a common candle that marks the top of a market rally. 
• Volume  remains steady. 
• The short-term stochastics hasn’t traded above 80.00 for this long in years. 
• It is extremely difficult to break higher out of a rising channel – hardly ever happens, much less after rising six straight days higher prior to. 
• T2108 posted in the Market Group shows a market that has only been this ‘overbought’ a few times in the past three years. 
• Continued support sits at the 10-day moving average, as we have managed to trade above it now for 16 straight days. 
• At 1451, you have a significant inflection point for the markets. If the market pulls back and price dips below this price level, there is a significant gap to fill (on the SPY) and will likely see a push below 1430. 
• The channel that we are currently trading in looks very similar to the channel that we traded in last year from June through September. 
• I’m becoming somewhat concerned by this market because now we have one very large gap and one smaller gap (formed 1/17) that has yet to be filled on the SPY, not to mention the large unfilled gap from November ’12.
• VIX still remains at the historical lows achieved on Friday by closing at 12.43.
• Of late, there have been quite a few market rallies/sell-offs in the last hour of trading, much like what we saw yesterday and Friday.
• There’s really no significant level of resistance for the market until you get to 1501. 
• It will take a significant move, but below 1398, the trend will be very bearish. 
• Be aware of upcoming news events and discussions that will permeate the markets: Debt Ceiling Debate, Fiscal Cliff Part II, Employment Recovery. 

My Opinions & Trades:

• Closed out LO at $39.50 from $39.16 for a 0.9% gain. 
• No new positions yesterday. 
• Remain Short TEVA at $38.10, TGT at $61.03 and ALV at $65.29 
• Remain Long BG at $75.11, RDS.B at $70.25.
• Stop-Losses have been updated for a number of positions.  
• Here is my real-time swing-trading portfolio and past-performance

Chart for SPX: