• SP 500 Market Analysis 8-23-12

Pre-market update (updated 8:30am eastern):

  • European markets are mixed in their trading. 
  • Asian markets were +0.5% higher. 
  • US futures are slightly lower ahead of the opening bell. 

Economic reports due out (all times are eastern): Jobless Claims (8:30am), PMI Manufacturing Index Flash (9am), New Home Sales (10am), FHFA House Price Index (10am), EIA Natural Gas Report (10:30am)

Technical Outlook (SPX):

  • Markets continue to languish of the past three trading sessions, but did manage yesterday to rally off of the lows and finish above the 10-day moving average. 
  • We tested the support level (as previously noted) at 1405 which represents the previous support level prior to breaking out. 
  • So far the pullback is not all that worrisome. Looks to be more of standard profit taking, and I’d expect the market to push higher in the coming days. 
  • Volume dropped off a bit yesterday and continues to trade at abnormally low levels. 
  • We’ve pulled off of overbought market conditions. 
  • Watch the 10-day moving average today at 1411 – this has represented a regular point for dip buying in the market to occur – just as we saw yesterday. 
  • It’s not uncommon if we consolidate below the 1422  resistance level for a while. You just don’t want to see a steep sell-off after touching the 1422 level. 
  • Strong spike in the VIX pushing it back  up above 15. 
  • 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 1370.
  • SPX trading above all significant moving averages (10,20,50,200).
  • 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:

  • Sold ARUN yesterday at 17.06 for a 1.7% gain from $16.79. 
  • Bought ALXN at $102.53 yesterday. 
  • Bought SAFM at $40.55 yesterday. 
  • Bought ADSK at $35.23 yesterday. 
  • Current stop-losses have been adjusted across the board. 
  • Stop-loss in AMZN moved up to $236.00.
  • HE Short stop-loss has been has been tightened to 27.53. 
  • BRO Short stop-loss has been has been tightened to 25.85.
  • Remain long WOOF at $19.01, LXP at $9.21, and AMZN at $233.90. Short BRO at $25.65, HE at $28.45.

Charts:

SP 500 Market Analysis 8-23-12

You Might Like

  • The rise of the retail trader in the stock market.

    The Retail Trading Revolution: How Small Investors Are Reshaping the Stock Market

  • fading the gap

    Fading the Gap: How Large Overnight Moves in SPY and QQQ Play Out During the Trading Day

  • how to trade a bear flag

    How to Trade a Bear Flag