• SP Market Analysis 7-24-12

Pre-market update (updated 8:00am eastern):

  • European markets are trading -0.2% lower.
  • Asian markets traded -0.5% lower. 
  • US futures are trading slightly lower ahead of the open. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Bernanke Speaks (8:45am), Redbook (8:55am), PMI Manufacturing Index Flash (8:58am), FHFA House Price Index (10am), Richmond Fed Manufacturing Index (10am)

Technical Outlook (SPX):

  • SPX gaped down significantly yesterday, and below the current uptrend, only to see consistent buying throughout the entire session, and eliminating over half of the day’s losses. 
  • As a result, we are still holding onto the current uptrend but need to hold on to 1343 today to keep it in place. 
  • Yesterday’s trading put us back below the 10-day and 20-day moving averages. Neither of these have been significant S/R levels for the market, but are simply worth noting from a sentiment/direction standpoint. 
  • Volume remained steady yesterday.
  • A ‘lower-low’ would be put in place at a close below 1325, the latter of which would make this market notably bearish. 
  • Sell-off comes, after a few days being short-term overbought. 
  • On 7/18 we managed to break through the descending trend-line off of the 4/2 highs (see chart below). 
    • But not this is starting to look like an incredible ‘head-fake’.
  • Watch the SPRI that I posted this past Sunday and how it shows us near-ready for the reversal signal. 
  • Also note the price resistance the SPX is up against on the weekly chart. 
  • The VIX remains under 19. A push back above 20, would increase the bearishness of the market. 
  • 30-minute chart shows a nice channel uptrend being threatened by today’s early morning action. 

My Opinions & Trades:

  • Busy Trading session yesterday, getting stopped out and also adding new positions
  • Will look to buy the dip today, assuming 1343 holds up. 
  • Sold AGU at $93.70 from $89.66 for a 4.5% gain. 
  • Sold NFLX at $79.45 from $82.76 for a -4.0% loss. 
  • Sold PCLN at $659 from $644.80 for a 2.2% gain. 
  • Added new positions as noted below. 

 

Charts:

SP Market Analysis 7-24-12

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