• S and P 500 Market Analysis 12-4-12

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

  • Europe is trading 0.4% higher.
  • Asian markets traded in a wide range from -0.6% up to +0.2%.
  • US futures are slightly higher ahead of the open. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am)

Technical Outlook (SPX):

  • Despite the historically positive gap-up on the first of the month, SPX instead sold off and eventually traded lower on the day. 
  • Most notable, was the rejection at the 50-day moving average. 
  • On SPY the price action turned the last two days into a bearish engulfing pattern. 
  • 30-minute chart looks distributive. 
  • Watch rising support at the 3-day EMA. 
  • Overall, despite the pullback yesterday, the action looks orderly and without panic. 
  • Stocks remain overbought in general and on the SPX. This can last a while, and does not necessarily mean that a pullback is imminent. 
  • Ideally for the bulls, if price action can close at or above 1429, the downtrend off of the September highs would be officially done and over with, as a new higher high would be established for the first time. 
  • Next level of price resistance rests at 1437. 
  • Fiscal Cliff discussions continues to dominate the news. 
  • SharePlanner Reversal Indicator shows a strong possibility for a Santa Rally
  • SPX currently has recaptured the 10, 20, and 200-day moving averages. 
  • VIX rose above 16.

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 12-4-12

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