Pre-market update (updated 9am eastern):

• European markets are trading 0.3% higher. 
• Asian markets traded mixed and 0.5% higher. 
• US futures are trading notably higher, in excess of 10 points on the SPX, ahead of the bell. 

Economic reports due out (all times are eastern): Employment Situation (8:30am), PMI Manufacturing Index (8:58am), Consumer Sentiment (9:55am), ISM Manufacturing Index (10am), Construction Spending (10am)

Technical Outlook (SPX):

• The morning’s employment number is sparking a large gap up on the SPX. 
• We are looking at the likelihood of a gap up to new 5-year, recovery high. 
• It is not at all uncommon to see the market rally on the first day of the trading month, quite common actually. 
• Over the past two days we’ve seen a pullback of 9 points which matches the pullback that we saw from 1/7-1/8 as well. 
• Short-term (but definitely not long-term) we’ve come off of oversold levels. 
• Despite yesterday’s minor sell-off, the VIX finished lower on the day, which is a bullish divergence. 
• Gaps higher on the SPX, historically are a nightmare for the bulls to hold on to. Recently though, over the past two months the market has consistently gapped higher and held those gains. Watch for whether this continues. 
• A gap-and-crap often results in a sharp spike higher in early trading on top of the gap it already has, followed by a peak in the market that will be achieved before 10:30am. 
• Watch the 1494 level which represents the 10-day moving average. We have traded and closed above the 10-day moving average for 22 straight days. 
• A pullback to 1470 would actually be a very healthy pullback area for this market and would help to cool the market off some before pushing back higher again. 
• If we finish below 1502 today, we’ll have our first negative close on the SPX on the weekly chart in four weeks. 
• This past January was the best we’ve seen since 1994. The best January in 19 years. 
• Be very careful about adding long positions to your portfolio today. This market is at major extremes on every noteworthy indicator. 
• The last three times we were this overbought on the weekly chart, the following weeks we saw anywhere between a 2-4 week pullback in the markets. 
• T2108 posted in the Market Group shows a market that has only been this ‘overbought’ a few times in the past three years. 
• At 1451, you have a significant inflection point for the markets. If the market pulls back and price dips below this price level, there is a significant gap to fill (on the SPY) and will likely see a push below 1430. 
• The channel that we are currently trading in looks very similar to the channel that we traded in last year from June through September. 
• Be aware of upcoming news events and discussions that will permeate the markets: Debt Ceiling Debate, Fiscal Cliff Part II, Employment Recovery. 

My Opinions & Trades:

• No new positions added yesterday. 
• Remain Long INGR at $67.72. 
• Remain Short TGT at $61.03, GM at $28.44, GLW at $12.04.
• May add a new short position if we can get some renewed weakness in the market today. 
• Here is my real-time swing-trading portfolio and past-performance

Chart for SPX: