• SP 500 Market Analysis 5-13-13

Pre-market update (updated 8am eastern):

  • European markets are trading 0.3% lower.
  • Asian markets traded traded in a wide, mixed range from -1.4% lower up to +1.2% higher. 
  • US futures are moderately lower.. 

Economic reports due out (all times are eastern): Retail Sales (8:30am), Business Inventories (10am)

Technical Outlook (SPX):

  • SPX managed to close at all times highs yet again.
  • But the pattern over the last three days, and considering this morning’s weakness, could be an indication of some consolidation in the near term. 
  • The Bollinger bands at the present are continuing to expand and lift this market’s ceiling for future rallies. 
  • SPX has been short-term overbought since 4/26. 
  • 30-minute charts shows an overextended market, and could allow for a 10-13 point pullback. 
  • Additional weakness today, would not be at all a bad thing for these markets. Few setups  out there, and less and less stocks are participating in this market rally. 
  • As long as the SPX doesn’t break 1580, any pullback we experience should be just fine and keep the bullish sentiment in place. 
  • A push above the upper Bollinger band would likely result in a climatic top. 
  • We are up seven straight months, the last time we saw such a rally was when the market bottomed in 2009. 
  • I ultimately think that there is a strong possibility of the SPX finishing the month of May in the red. 
  • Continue trading to the long side while the bullishness continues. No need to try to call a top on this market when it shows no desire to do so. Don’t try to be a hero in your trading. 
  • 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. 
  • Both channels (July October 2012) and the price channel we are currently in are very similar in nature. 
  • We haven’t seen a market pullback in excess of 4% since October/November time-frame. 

My Opinions & Trades:

Chart for SPX:

SP 500 Market Analysis 5-13-13

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