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

  • European markets are trading 0.4% higher. 
  • Asian markets traded between 1.7% higher on average. 
  • US futures are moderately higher heading into the open. . 

Economic reports due out (all times are eastern): GDP (8:30am), Consumer Sentiment (9:55am)

Technical Outlook (SPX):

  • Huge day in the markets yesterday for the bulls, erasing the last 2, almost 3 days of weakness. 
  • Rally went all the way up to the resistance off of the downtrend from the 4/2 highs. 
  • A close above 1376, preferably above 1380 would mark a new high in the market and increase the bullishness in this market. 
  • With the recent break of the uptrend/channel that the market had been trading in, 
  • Nice Double bottom formed on the 30-min SPX chart.
  • While on the daily, you have a double top-formation coming together that could pose as trouble in the days ahead if confirmed with a close below 1334.
  • 50-day moving average showing solid support over the past three trading sessions. 
  • At this point, SPX hasn’t actually put in a ‘lower-low’ yet, and is therefore still in an uptrend overall. 
  • Because of this, you want to be careful about how bearish you get until there is a legitimate breakdown in the market and not merely a pullback (which is what recent selling is at this point). 
  • Bulls must hold 1329. A close below that level, and you have what would begin a new downtrend. 
  • 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. 
  • VIX pushed  back below 20, and remains under 18. 

My Opinions & Trades:

  • Will look to add new longs to my swing-trade portfolio – anywhere between 1-3. 
  • Covered GNC yesterday for a -1.7% loss. 
  • Remain long HES $45.60 and short MWV at $28.50


SP Market Analysis 7-27-12