Pre-market update:

• European markets are 1.4% lower. 
• Asian markets traded 1.7% lower.
• US futures are trading significantly lower, and off the morning lows.  

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 managed to hold its own on Friday but that was it. Initial sell-off was eventually bought up into the close, but little, in the way of recovery, was made. 
• 1608 would make a lot of sense in terms of a market bounce to previous resistance. At that point, I would look for new opportunities for shorting stocks. 
• We’ve established a downward channel that can be seen below that I believe, if it can hold, should warrant a short-term bounce at these levels. 
• We are quickly approaching short-term oversold levels. 
• The same thing that pushed the market up over the last four and a half years, the absence of it will lead the market right back down. That is what we are seeing as a result of the Fed’s tapering talks. 
• This kind of volatility hasn’t been seen since the summer of 2011. 
• The major technical development from yesterday is that we breached major price support at 1601. 
• As a result of that, we have now established a lower-high and lower low for the first time in this market. 
• Any bounce higher at this juncture should be considered a dead cat bounce. 
• The bias should be to the short side for trading, but the entries must be well-timed 
• With recent selling, we are now trading well below the 10,20, and 50-day moving averages. 
• We are also trading well below the lower Bollinger Band, which is a prime opportunity for a short-term bounce as well.
• However, unlike trading above the upper Bollinger Band, the market can trade for extended periods in very bearish sell-offs, well below the lower band. See 2008, 2009, and Summer of 2011 for reference. 
• Heavy pullback in the VIX bringing it back into the 18’s.  
• We are looking at having our first down month of the year. 
• Markets don’t care about the economy. 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:

• Sold CLR at 83.55 for a 1.2% loss and sold BWLD at 95.35 for a -3.5% loss. 
• Long AMZN long at 273.44. 
• If the market can bounce here, I may look to add some long exposure for a brief period. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: