Pre-market update:

• Asian markets traded -0.5% lower. 
• European markets are trading 0.5% lower. 
• US futures are trading 0.3% higher ahead of the market open. 
  

Economic reports due out (all times are eastern): MBA Purchase Applications (7), ADP Employment Report (8:15), EIA Petroleum Status Report (10:30), Bernanke Speaks (3)

Technical Outlook (SPX):

• SPX gave traders a long overdue bounce. However much of that bounce may be lost with a market gap down this morning. 
• Keep an eye on 1674 today it represents two key price points. First it is the lows from Monday, and secondly it is where the rising trend-line off of the November lows currently rests. 
• If the Monday lows were to break today, and of course it would take a 20+ point sell-off to do that, the conditions of the market would dramatically flip to the bearish side of things. 
• SPX remains right at the cusp of oversold conditions short-term. 
• There appears to be a respectable amount of support at the 50-day moving average. 
• Volume remained average. 
• VIX dropped down to 15.54. 
• The gap down that we are seeing this morning is typically a hard thing for the bears to hold on to. Just look at Monday’s price action. As a result, if you are looking to get short on this market, don’t chase the market after it opens. Most of the time the day’s lows are put in place within the first hour of trading and then an attempted rally ensues. 
• Long-term I don’t believe a government shutdown hurts the market.
• If a compromise is reached, expect a significant bounce back. 
• Confirmed Head and shoulders pattern on the SPX 30-minute chart still in play. 
• 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:

• Added one new position yesterday to the portfolio. 
• Close no trades out yesterday.  
• Currently 70% long / 30% cash.  
• Current Longs: RDC at 37.17, ACAS at 13.42, UHS at 73.85, MPEL at 31.59, CSE at 11.86, ITMN at 15.31
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: