• S and P 500 Market Analysis 1-15-13

Pre-market update (updated 9:00am eastern):

  • European markets are trading -0.7% lower.
  • Asian markets traded mixed and 0.3% higher. 
  • US futures are trading moderately lower ahead of the opening bell.. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Producer Price Index (8:30am), Retail Sales (8:30am), Empire State Manufacturing Survey (8:30am), Redbook (8:55am), Business Inventories (10am)

Technical Outlook (SPX):

  • Another day similar to Friday, where we sell-off in the early going, consolidate after a small bounce, and then rally towards break-even at the close. 
  • We are looking at another gap down this morning and a strong possibility we see similar price action to the previous two trading days. 
  • Volume has been lighter the past two trading sessions, which suggests there is no real panic during the sell-off and that we are more likely just working off overbought market conditions than actually looking to move significantly lower. 
  • It almost appears as if we are trying to create another bull-flag which would have started just one day after breaking out of another bull-flag. If that is the case, there could be concern that the market is lacking sustained buying power to move the markets higher, and instead is having to rely on quick bursts. 
  • Markets can rally far longer than you’d expect them to. But considering extent of the current bounce off of the previous lower-low and comparing other similar trends, we should be nearing the top of the current price range before pulling back to form a new higher-low. 
  • A short-term push below 1451 would give good reason to tighten stops or take gains on existing positions and let the the pullback work its magic. 
  • 30-minute chart shows a nice breakout of previous consolidation, but looks extremely vulnerable if we break that 1451 level on a pullback. 
  • 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.
  • The VIX remains in the 13’s .
  • There really isn’t any support found on any of the major moving averages. 
  • Notice the channel that we are currently trading in, off of the November lows (see chart below).
  • 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 very 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. 

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 1-15-13

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