• SharePlanner Reversal Indicator 3-13-13

Pre-market update (updated 9am eastern):

  • European markets are trading -0.4% lower..
  • Asian markets traded -0.8% lower. 
  • US futures are trading slightly lower ahead of the opening bell.

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), Retail Sales (8:30am), Import and Export Prices (8:30am), Business Inventories (10am), EIA Petroleum Status Report (10:30am), Treasury Budget (2pm)

Technical Outlook (SPX):

  • SPX finally experienced its first down-day in nearly two weeks, snapping a 7 straight days of consecutive higher prices. 
  • However, the slight pullback does little to change the inflated prices of stocks in general right now. 
  • Ideally, we are still in need of a more sustained pullback to 1500-1510 level simply for the reason, that it would once again bring stocks back to a place with more ideal setups and opportunities for trading. 
  • Volume on the selling front yesterday was slightly higher than what we’ve seen of late. 
  • Fear has completely escaped this market which puts investors, unknowingly in a very vulnerable position. 
  • Also the amount of margin being used to buy stocks are at levels that historically have led to notable reversals in the market. 
  • I’m looking for a pullback more than anything at this juncture and an opportunity for stocks to create more favorable setups to the long-side as a result. 
  • We are extremely overbought in the short-term. 
  • While we can still move higher from here, I believe there is far more risk over the next 2-3 days in doing so. 
  • Significant bearish divergence on the T2108 as the market is putting in recovery highs, the T2108 (% of stocks trading above their 40-day MA) is significantly lower.
  • The weekly chart shows a strong breakout in place. 
  • VIX bounced back into the 12’s yesterday. 
  • 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:

SharePlanner Reversal Indicator 3-13-13

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