Pre-market update:

• Asian markets traded 1.7% lower. 
• European markets are trading -1.1% lower. 
• US futures are trading -1.0% lower ahead of the market open. 
  

Economic reports due out (all times are eastern): Chicago PMI (9:45), Dallas Fed Manufacturing Survey (10:30)

Technical Outlook (SPX):

• A significant pullback in play for the SPX as the index is looking at a gap down in excess of 1%
• Most importantly is to watch the rising trend-line off of the November 2012 lows. Today the rising support sits at 1671 and is most certainly in play today. 
• 20-day and 50-day moving averages will be broken at the market open today. 
• Large gaps like what we are seeing today will typically see 1 of 2 outcomes: 1) the market flat-lines after the first hour of trading, 2) and this one happens more times than not, the bulls buy the dip and often times leads to a rally off of the day’s lows.
• In essence, the bears struggle to hold large gap downs through an entire day of trading.
• As a result, I wouldn’t short anything off of this.
• The entire gap down is a result of the looming government shutdown that is likely to take place at midnight.
• Long-term I don’t believe a government shutdown hurts the market.
• If a compromise is reached, expect a significant bounce back. 
• A bounce is becoming long overdue in this market, as a negative finish today will market 7 out of 8 days the SPX has finished lower. 
• Head and shoulders pattern on the SPX 30-minute chart to confirm today. 
• Markets don’t care about the economy nor earnings. 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:

• No new trades on Friday. 
• Did not close out any trades either. 
• Currently 50% long / 50% cash.  
• Current Longs: BIDU at $143.15, RDC at 37.17, ACAS at 13.42, UHS at 73.85, MPEL at 31.59.
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: