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

  • European markets are trading 0.8% higher. 
  • Asian markets traded between 1.1% higher on average. 
  • US futures are trading and in mixed fashion with slight weakness. 

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

Technical Outlook (SPX):

  • Monster rally on Friday from better than expected GDP report, creating an  unexpected higher-high in the market. 
  • SPX has rallied a 48 points in 2 days which is extremely atypical. Don’t be surprised to see some profit taking here over the next day or two. 
  • Resistance barriers have, including the down-trend off of the 4/2 highs, been broken on Friday. There aren’t any major resistance barriers in the near term for the SPX to face. Minor resistance lies around 1402-6. 
  • Previous uptrend is now flattened out some, now that we have managed to create another higher-high. Current uptrend support lies at 1337. 
  • If another sell-off were to ensue, watch for a break and close below 1329 for a new lower-low in the market.  
  • Volume in the broader market continues to increase day-after-day. Volume on Friday was very strong. 
  • At this point, the goal for the bulls has to be to continue to trade higher and challenge the 1422 highs from 4/2 which are now well within reach. 
  • Double bottom recently formed in SPX 30-min chart has been confirmed. 
  • Solid support formed at the 50-day moving average. 
  • Of concern is the bearish crossover signal found in this week’s SharePlanner Reversal Indicator. Caution is warranted. 
  • VIX is currently trading below 17.

My Opinions & Trades:

  • Closed out of MWV at $28.72 from $28.50 for a -0.8% loss. 
  • Long MDT at $38.15. 
  • Long WTW at $51.10
  • Remain long HES $45.60. 


SP Market Analysis 7-30-12