Pre-market update:

• Asian markets traded -0.8% lower.
• European markets are trading flat.  
• 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):

• For the third time in the last five trading sessions, SPX tested the 1772 level and held it. 
• Strong bounce off of the lows intraday that nearly saw SPX go green, but only to give up half the bounce by the market close. 
• For any bounce at this point, the bulls need to push price above 1799 at the close and ultimately above 1809. 
• For the bears this is simply just another attempt to push the markets below 1772. 
• Strong volume on Friday to close out the month. 
• All eyes now shift to Janet Yellen today as she is now at the helm of the Federal Reserve. 
• 30-minute chart of SPX shows a good deal of consolidation over the last five days of trading. 
• VIX spiked higher on Friday to 18.48. 
• January represented the first down month since August 2013. 
• A bearish January has had little effect the rest of the year, as three out of the last four bearish January’s have seen a positive return on the year. 
• Five out of the last seven trading sessions have seen heavy sell-offs. 
• The potential for a major short squeeze is very possible – traders are getting sucked into the short trade and it is already becoming very crowded. 
• Until 1772 is broken there is not a significant lower-lower put in place for SPX.
• 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:

• Added two new positions on Friday. 
• Closed AREX out on Friday at 19.73 for a 2.7% loss .
• Remain long UTX at 113.48, CX at 12.28, SPLK at 75.00 and MU at 23.19. 
• Long 60% / Cash 40% 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: