• S and P 500 Market Analysis 11-26-12

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

  • Europe is trading -0.5% lower. 
  • Asian markets traded 0.1% higher. 
  • US futures are moderately lower.  

Economic reports due out (all times are eastern): Chicago Fed National Activity Index (8:30am), Dallas Fed Manufacturing Survey (10:30am)

Technical Outlook (SPX):

  • SPX closed higher for the 5th straight day and finished outside the declining channel. 
  • However, price has gone straight into price resistance at 1404-1410. 
  • Indices across the board are extremely overbought short-term, particularly the SPX after rallying 66 points in 5 trading sessions. 
  • Volume declined each day over the last 5 days, but that is primarily due to the holiday week, and is not a fair barometer to judge by. 
  • Despite the strong rally of late, the SPX failed to make a higher-high. As a result, I’d view this market with skepticism. 
  • Moderate-to-extreme gap downs have a difficult time sustaining their momentum, and often times results in a significant mid-day reversal that wipes away some or all of the days losses. 
  • SPX currently has recaptured the 10, 20, and 200-day moving averages. 
  • 30-minute chart shows price support at 1404, 1390, and 1376.
  • VIX has dropped to 15-flat

My Opinions & Trades:

  • Sold AET on 11/21 for a 3.5% gain.
  • Sold ITW at 11/21 for a 1.2% gain. 
  • Still holding PHG 25.41 long. 

Chart for SPX:

S and P 500 Market Analysis 11-26-12

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