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

  • Europe is trading -0.2% lower.   
  • Asian markets traded in a wide/mixed range, from -0.29% up to +2.2%. 
  • US futures are slightly up ahead of the opening bell. 

Economic reports due out (all times are eastern): Treasury International Capital (9am), Industrial Productions (9:15am), E-Commerce Retail Sales (10am) 

Technical Outlook (SPX):

  • After spending time in positive territory early on, the market gave back its gains for the third straight day. 
  • However, there was some signs of life as the market managed to rally into the close. 
  • The market is extremely oversold on both the daily and weekly charts – but much more so on the weekly. Look for some strength next week during Thanksgiving week. 
  • But let the market show you its hand first before jumping in heavy on the long side. 
  • Volume during the sell-off has been for the most part average. 
  • Stocks like Apple (AAPL) are going to have to decide whether they are going to bounce at critical support levels. Failure to do so could drag Nasdaq down even further. 
  • For the second straight day, the the price action rode the lower bollinger band but without breaking it at the close. 
  • Looking at the weekly chart, we’ve typically bounced after testing the lower bollinger band on the weekly chart, which is currently at 1341, and is my target for a bounce – just like we did on 6/1. 
  • Market remains fixed in oversold territory, and setting up for a Thanksgiving bounce next week (typically bullish for trading). 
  • Price Support  at 1355 was broken as well. 
  • If there is a rally in the coming days, I’d look for 1404 to be targeted resistance. 
  • Last time we broke through the 200-day SMA, it led to a major sell-off in August 2011 that lasted through early October of that same year. 
  • 30-min chart show s the possibility for some consolidation. 
  • VIX remains just a shade below 18. 

My Opinions & Trades:

  • Covered SODA at $34.34 from $35.69 for a 3.8% gain. 
  • Covered HOLX at $19.57 from $20.16 for a 2.93% gain. 
  • Covered CAKE at $33.16 from $33.26 for a 0.3% gain. 
  • Remain short Short CLNE at $12.88.
  • Will begin adding 1-2 new long positions to the portfolio to gear up for a market bounce. 

Chart for SPX:

S and P 500 Market Analysis 11-16-12