• S and P 500 Market Analysis 2-26-13

Pre-market update (updated 8am eastern):

  • European markets are trading -1.8% lower.
  • Asian markets traded -1.5% lower. 
  • US futures are trading slightly higher ahead of the opening bell. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45ma), Redbook (8:55am), FHFA House Price Index (9am), S&P Case Shiller HPI (9am), New Home Sales (10am), Consumer Confidence (10am), Bernanke speaks (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am)

Technical Outlook (SPX):

  • Monday kicked off the week with a major sell-off, nearly 2% in total. By far the largest sell-off of 2013. 
  • VIX spiked more 33% yesterday, which is a rarity you’ll see that big of a move out of the ‘fear index’ as it settles in just below 19. 
  • SPX nearing short-term oversold territory, which once it reached that point back in late December, it immediately bounced higher. 
  • If we see a break at 1480 today of the rising channel, the next logical support level for the market rests at 1465. 
  • Volume continues to be much higher on down days and above average while the up-days tend to be below average. 
  • It is likely that any gap higher, after the depth of the sell-off yesterday, will get sold today. 
  • We saw the SPX break 1495 which was key in my opinion for determining whether this was momentary weakness or a new leg down in the broader market. 
  • 30-minute chart shows a market in free-fall. 
  • We haven’t seen a market pullback in excess of 4% since October/November time-frame. 
  • The channel that we are currently trading in looks very similar to the channel that we traded in last year from June through September. 

My Opinions & Trades:

  • Shorted HOG yesterday at $51.83. 
  • Shorted CX at $10.20 yesterday. 
  • Closed out HCBK at $8.63 from $8.73 for a -1.2% loss. 
  • Closed MTB at$102.37 from $105.73 for a -3.2% loss. 
  • Market reversal of late is providing some great short setups for us to scale into. 
  • Remain Long ADBE at $38.88; Short ILMN at $48.40.
  • Here is my real-time swing-trading portfolio and past-performance

Chart for SPX:

S and P 500 Market Analysis 2-26-13

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