Pre-market update (updated 8:30am eastern):
- European markets are trading 0.3% higher.
- Asian markets traded 0.8% higher.
- US futures are mixed ahead of the opening bell.
Economic reports due out (all times are eastern): Consumer Sentiment (9:55am), Leading Indicators (10am)
Technical Outlook (SPX):
- Yesterday’s rally was quite a shocker for most market participants and broke out of the 5-day trading range.
- The 10-day moving average has come right up underneath the bottom of price action. Use this level as the first support level for the markets should a pullback occur.
- Volume picked back up yesterday, but still at historically low levels. If you take out volume for ETF’s and high frequency trading, there a relatively low amount of traders in this market.
- The next destination for this market is a move towards 1422 – which represents the recovery highs.
- You may also see a pullback to 1405, which is the top consolidation range the market pulled out of. That too may offer a level of support for SPX as well.
- We’ve managed to come off of overbought levels in the short-term. But remain extremely overbought longer-term.
- Since the pullbacks off the 6/4 bottom, the pullbacks have ranged around 30-60 points each time, which would give us a range of 1390-60.
- With these low volume levels, continue to expect intraday choppiness in the market.
- Next level for bulls to overtake is the 1422 recovery highs on the SPX.
- It’s not uncommon to see large market rallies going into an incumbent re-election.
- 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 1361.
- 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:
- Stopped out of COG at $43.20 from $42.01 for a -2.8% loss.
- Bought RHT at $57.27.
- Stop-Loss in ARUN moved up to $17.10
- Stop-loss in AMZN moved up to $230.90
- Stop-loss in RHT move up to $56.70.
- Moved my stop-loss in MDT up to $39.99.
- Portfolio with the addition of RHT and removal of COG has given my portfolio a more bullish tilt going forward.
- 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 ARUN at $16.79, MDT at 38.15 and AMZN at $233.90. Short BRO at $25.65, HE at $28.45, COG.