Pre-market update (updated 8:30am eastern):
- European markets are trading in a mixed fashion.
- Asian markets traded mixed/flat.
- US futures are trading break-even.
Economic reports due out (all times are eastern): None
Technical Outlook (SPX):
- Late afternoon rally managed to lift the markets into positive territory for a sixth consecutive day.
- Volume, despite the strength in the market, is seeing holiday-like volume, which to put it plainly, is incredibly weird.
- We remain well-overbought on all time frames.
- If we were to rally for a 7th day in a row, it would be an event that hasn’t happened in years.
- Watch the 10-day moving average for minor support at 1390.
- The six-day rally the market is on, hasn’t occurred since 3/7-3/12.
- However, the gains that are being made are sluggish at best, and without much fanfare.
- Setting up for a pullback at the very least heading this week as buyers seem to be lacking conviction at these levels (just look at…yes…volume!)
- SPX poised to make a move to 1422 and challenge the year’s highs.
- It’s not uncommon to see large market rallies going into an incumbent re-election.
- 30-min chart has us primarily trading in a sideways channel.
- If you look at the 4 previous higher-highs in the market since the 6/4 bottom, then one could conclude that we’ve reached another temporary top, and are prime for another pullback.
- One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3
- At this point, uptrend support rests at 1355.
- SPX trading above all significant moving averages (10,20,50,200).
- VIX has moved below 15 for the first time since March.
- If another sell-off were to ensue, watch for a break and close below 1354 for a new lower-low in the market.
My Opinions & Trades:
- Bought EL at $55.07 on Friday
- Moved my stop-loss in MDT up to $39.61.
- Bought OSK at $23.74.
- Going to consider any sell-off as opportunities to buy stocks on the cheap. Dip buying should be the norm until a lower-low is put in place.
- Remain long OSK at $23.74, RHT at $56.19, AIG at $32.46, MDT at 38.15 and AMZN at $233.90. Short BRO at $25.65, HE at $28.45