Pre-market update:

• Asian markets traded 0.4% higher.
• European markets are trading flat..
• US futures are trading 0.1% lower ahead of the market open. 
  

Economic reports due out (all times are eastern): None

Technical Outlook (SPX):

• Another solid market performance on Friday, leaving the market extremely over-extended and in a position for some likely profit-taking near-term.
• If/when the profit taking occurs, I wouldn’t let it alarm you, even if it results in a +20 point pullback on SPX. 
• As long as price holds the 1900 level, all is well. 
• Volume has remained steady over the past three days. 
• Profit taking at this point isn’t all that bad. In fact for me, it is a welcomed development. Ideal trade setups without high levels of risk are hard to come by. This market needs to reset some. 
• I cut my long exposure in my portfolio by 20% on Friday as the market seemed over extended. The two non-performing stocks (See “My Trades” below”) were cut to reduce exposure at this stage in the rally. 
• VIX dropped an astounding 8.7% down to 10.7% and broke support dating back to April of 2013. 
• VIX reading is the lowest since February of 2007 at 10.73.
• Rally on Friday marked the tenth time in the last twelve trading sessions SPX has finished in the green. 
• Strong rallies into a mature, short-term rally are often signals of a short-term top being near by.
• The rally off of the 4/14 lows has support at 1899. 
• 30 minute chart of SPX is heavily overbought and is consolidating near the highs. 
• The only moving average that has shown any significant measure of support recently has been the 50-day moving average. That is the only one I would stay focused on at this point. 
• There does remain a significant gap up to fill from 5/27 on the SPY chart. 
• The market doesn’t care about the economy nor earnings. That is not what is driving it. The market only cares about what the Fed is doing to keep equities propped up. 

My Trades:

• Closed out NXPI for a 0.8% gain. 
• Closed out HPQ for a 0.1% loss. 
• Both positions were considered non-performers. 
• Did not add any new long positions on Friday. 
• I will look to add 1-2 new long positions today. 
• Remain long AKAM at 54.52, HAL at 63.07, WDC at 87.93, STT at 65.75, IR at 60.11
• 50% Long / 50% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: