Pre-market update:

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

Economic reports due out (all times are eastern): PMI Manufacturing Index (8:58), ISM Manufacturing Index (10), Construction Spending (10)

Technical Outlook (SPX):

• Half day of trading saw another final hour sell-off to wipe away the day’s gains. 
• Until that sell-off, the SPX was sporting a solid short-term breakout play out of a 3-day price range. Now it just remains fixed in a 4-day holding pattern instead.
• Watch out for the bearish wedge I mentioned before. As it stands now we are on verge of confirming that pattern to the downside. Any type of weakness would confirm.
• The paltry volume levels on Wednesday and Friday should see a nice pick up today. 
• Remain cautious towards the market’s gains on the day once the final hour approaches, we’ve seen this happen three out of four trading sessions last week. Be extremely careful with long positions in the final hour when day-trading. 
• SPX has risen for 8 straight weeks – since March’s 2009 bottom, that is unprecedented. 
• A move below 1800 could get traders rather uneasy. The key level for the bulls to hold sits at 1777. At that point the current rally would be over and a new lower-low would be in place. 
• In essence, I don’t see any reason to be short yet in this market. Wait for the market to change directions first. 
• The market can continue to rise higher if it so chooses and if so, you continue to trade long. However, bearish signs that arise should cause you to temper your expectations of a strong future upside move and manage the risk accordingly. 
• SPX 30-minute chart shows a strong breakout pattern, followed by a strong pullback to support. 
• The 10-day moving average has been an excellent guide for the health of this market during strong uptrends. No different here. 
• VIX spiked to 13.70 on Friday. 
• Markets don’t care about the economy nor earnings. 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:

• No new positions added on Friday. 
• Will look to tighten up the stop-losses on current trades. 
• May add 1-2 new positions today. 
• Current Longs: GT at 21.71,  ETFC at 17.63, KKR at 23.18, AAPL at 524.09, JAH at 56.50.
• Long 50% / Cash 50% 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: