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

  • European markets are trading -0.4% lower. 
  • Asian markets were mixed in their trading. 
  • US futures are flat ahead of the bell. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales, Redbook (8:55am), S&P Case-Shiller HPI, Consumer Confidence (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am)

Technical Outlook (SPX):

  • Yesterday’s price action saw the S&P give back a decent amount of gains it held during the day. 
  • One could make the argument that the price action since breaking the 1422 highs intraday, has been the result of a bull-flag on the daily. 
  • 30-min chart on SPX shows a well established bullish trend over the past month. Action since 8/21 has the potential for a new channel downward possibly forming. 
  • If we sell-off again today, watch the 20-day moving average to act as a possible support level for the market, in which bulls try to buy the dip at. 
  • 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. 
  • 10-day moving average has been rather useless of late, largely going ignored by the indices. 
  • Going forward SPX needs to close above 1422 and take out 1426 recent intraday highs.
  • Volume remains at ridiculously low levels – Monday was no better. 
  • 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. 
  • Sharp spike in the VIX yesterday pushing it above 16. 
  • 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:

  • Busy day on Monday for trading…
  • Bought RNDY at $7.86
  • Bought RHT at $57.56
  • Bought CRM at $145.39
  • Sold SASFM at $43.95 from $40.55 for a -0.3% loss. 
  • Sold LTD at $51.20 from $47.53 for a -1.3% loss. 
  • Both of these longs were considered the bottom dwellers of my portfolio and shed to make room for new positions. 
  • Covered BRO at 25.85 from $25.65 for a -0.8% loss. 
  • 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. 
  • ALXN stop-loss moved up to $100.98
  • Remain long FBHS at $24.54, ALXN at $102.53, LXP at $9.21, and AMZN at $233.90. Short HE at $28.45.
  • Track my portfolio RealTime here. 


SP 500 Market Analysis 8-28-12