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

  • European markets are trading 0.6% higher. 
  • Asian markets were mixed in their trading. 
  • US futures are slightly higher ahead of the bell. 

Economic reports due out (all times are eastern): Dallas Fed Manufacturing Survey (10:30am)

Technical Outlook (SPX):

  • Hard bounce for the market on Friday, and in particular the SPY bounced right off of the 20-day moving average and created a HUGE bullish engulfing pattern. 
  • Also managed to reclaim the 10-day moving average. 
  • Going forward SPX needs to close above 1422 and take out 1426 recent intraday highs.
  • Volume remains at ridiculously low levels – even more so on Friday. 
  • We are well-off of overbought levels – which gives this market plenty of room to run. 
  • SharePlanner Reversal Indicator received a bullish confirmation signal. 
  • Support above the 1405 level was recaptured on Friday. 
  • With Friday’s bounce, the pullback we saw for most of last week should be presumed over at this point and that the a new higher-high should be established. 
  • When we tested the 10-day moving average Thursday, unlike previous opportunities, bulls showed no desire to buy the dip. 
  • VIX is currently sitting at 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
  • 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:

  • On Friday I bought LTD at $48.47. 
  • On Friday I bought FBHS at $24.54. 
  • BRO is on the cusp of being closed out. 
  • Any new long positions will likely result in me closing out an existing long position. 
  • Current stop-losses have been adjusted across the board. 
  • Stop-loss in AMZN moved up to $237.90.
  • HE Short stop-loss has been has been tightened to 27.40. 
  • BRO Short stop-loss has been has been tightened to 25.85.
  • ALXN stop-loss moved up to $100.98
  • Remain long SAFM at $40.55, ALXN at $102.53, LXP at $9.21, and AMZN at $233.90. Short BRO at $25.65, HE at $28.45.
  • Track my portfolio RealTime here. 

Charts:

SP 500 Market Analysis 8-27-12