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

• European markets are trading flat and mixed.
• Asian markets traded -0.8% lower. . 
• US futures are trading mixed with the SPX slightly lower and Nasdaq slightly higher ahead of the bell. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), FHFA House Price Index (9am)

Technical Outlook (SPX):

• SPX closed yesterday right on the rising upper channel. As happened last time, we should see some profit taking as a result. 
• It is extremely difficult to break higher out of a rising channel – hardly ever happens, much less after rising five straight days higher prior to. 
• Volume came back down to normal levels. 
• T2108 posted in the Market Group yesterday shows a market that has only been this ‘overbought’ a few times in the past three years. 
• Continues support sits at the 10-day moving average, as we have managed to trade above it now for 14 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 yesterday) 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:

• Sold WCC at $71.50 from $68.24 for a 4.8% gain. 
• Shorted ALV at $65.29.
• Remain Short TEVA at $38.10 and Long BG at $75.11, LO at $39.16, 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: