• SP Market Analysis 7-9-12

Pre-market update (updated 9:00am eastern):

  • European markets are -0.3% lower.
  • Asian markets took a hard hit finishing -1.4% lower.
  • US Markets are slightly lower ahead of the opening bell. 

Economic reports due out (all times are eastern): Consumer Credit (3pm) 

Technical Outlook (SPX):

  • SPX sold off about -1% on Friday, and recovered about 1/3 of its losses off the lows of the day. 
  • There was not any not notable technical damage done to the SPX from previous two trading sessions.
  • 30-minute chart shows a well-deserved pullback, but the series of higher-highs and higher-lows still in place. 
    • Last two days have helped the market come off of short-term overbought levels. 
  • Roughly 1330 represents today’s  rising support level that must be held, which is 24 points away from Friday’s close. 
    • In order for a violation to occur price must close below 1330 – intraday breaks carries little significance. 
  • SPY chart shows that the Friday gap down held (which the opposite happens more times than  not)
    • 3 out of the last 4, and the last 2 down days as well, have all ended in doji-candles, showing that the selling has been some what controlled and lacked any real fear from market bulls. 
  • SPRI indicator is showing a market that is beginning to enter bullish extremes. No reversal though. 
  • An area of concern for the bulls is the fact that the the rally off of the 6/4 lows is forming a bearish wedge. 
  • Breaking through the 1390’s will be difficult as there are plenty of separate resistance levels in that area. 
  • Below 1306-1308 price level, will nullify the current rally off of the 6/4 lows – would represent a ‘lower-low’ in the market. 
  • Despite Friday’s sell-off , VIX finished notably in th red. 

My Opinions & Trades:

  • I will be looking to add two new positions to the portfolio amid recent market weakness. 
  • Closed WBC on Friday for a -3.95% loss (Stopped out).
  • No new positions added on Friday. 
  • I don’t see really any strong evidence to be short “right-now”. 
  • Still long WNR at $20.51, CMG at 378.44, UA at $93.09, HD at $51.50 . 
  • Increasing my stop-loss in WNR to $22.70 locking in 10.7% in gains and providing plenty of wiggle-room for the stock. 

Charts:

SP Market Analysis 7-9-12

You Might Like

  • South Korea and its impact on the US stock market.

    South Korea: The Hidden Driver of US Tech Volatility

  • Learn to trade within your means.

    Stop Trying to Hit Home Runs: Start Trading Within Your Means

  • Avoiding traps on stock breakout plays.

    How to Trade Breakouts Without Getting Trapped