• S and P 500 Market Analysis 1-14-13

Pre-market update (updated 9:00am eastern):

  • European markets are trading mixed and 0.1% higher.
  • Asian markets traded 0.8% higher but in mixed fashion.. 
  • US futures are trading slightly lower ahead of the opening bell.. 

Economic reports due out (all times are eastern): None

Technical Outlook (SPX):

  • After trying to dip lower on Friday, SPX managed to finish the day near break-even, but with the candle pattern of a shooting star. 
    • Often times this can represent a bearish short-term peak in the market. 
  • Markets can rally far longer than you’d expect them to. But considering extent of the current bounce off of the previous lower-low and comparing other similar trends, we should be nearing the top of the current price range before pulling back to form a new higher-low. 
  • A short-term push below 1451 would give good reason to tighten stops or take gains on existing positions and let the the pullback work its magic. 
  • Bull-flag that we had mentioned before on the SPX was confirmed on Thursday. 
  • Apple has some negative news out regarding waning demand, impacting its stock and the Nasdaq as well. 
  • SPX is trading at 5 year highs. 
  • Volume remains steady over the past few weeks of trading. 
  • 30-minute chart shows a nice breakout of previous consolidation, but looks extremely vulnerable if we break that 1451 level on a pullback. 
  • Of late, there have been quite a few market rallies/sell-offs in the last hour of trading, much like what we saw on Friday.
  • The VIX closed at new recent lows again, and almost below 13. 
  • There really isn’t any support found on any of the major moving averages. 
  • Notice the channel that we are currently trading in, off of the November lows (see chart below).
  • There’s really no significant level of resistance for the market above 1466 until you get to 1501. 
  • It will take a significant move, but below 1398, the trend will be very bearish. 
  • Be aware of upcoming news events and discussions that will permeate the markets: Debt Ceiling Debate, Fiscal Cliff Part II, Employment Recovery. 
  • There is still a huge gap on the SPY chart that ultimately needs to be filled. 

My Opinions & Trades:

Chart for SPX:

S and P 500 Market Analysis 1-14-13

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