• d7d962d06181cd3c4892a198.png (600×625)

Economic Reports Due out (Times are EST): Empire State Manufacturing Survey (8:30am), Treasury International Capital (9am), Industrial Production (9:15am), Consumer Sentiment (9:55am)

Pre-market Update (Updated 8:30am eastern):

  • US futures are slightly higher ahead of the open. 
  • European markets are trading 1.2% higher. 
  • Asian markets traded on average -0.6% lower. 

Technical Outlook (SPX):

  • Solid day for the bulls yesterday, as price action is finally starting to move out of the 5-day consolidation range. 
  • To spur on the bulls to additional buying, there needs to be a close above 1334
  • Today is options expiration so there is an increased likelihood of volatility in the market (as if we don’t have enough already). 
  • 50-day moving average could create headwinds for SPX at 1347. 
  • Continue to follow SPX’s 10-day moving average for short-term support in this market. 
  • Inverse head and shoulders forming over the past month – currently working on the right shoulder – could see confirmation today. 
  • IH&S pattern very obvious on the 30-minute chart.
  • SPX is no longer overbought. 
  • Volume remains relatively average. 
  • The markets in general have pulled back roughly 10% off of its recent highs which is typically considered a “pullback” in the markets. 
  • A break below 1306 would represent a resumption of the downward trend. 
  • VIX is still elevated and rests above 21 – below 20 and the bear’s hopes for a break lower is greatly hampered. However, it did take a pretty solid hit yesterday. 

My Opinions & Trades:

  • I am looking to add more long positions to the portfolio going into today’s open. Conditions are becoming more favorable. 
  • Careful about trading in and out of this market too much – I’m playing with my original stop-losses which is usually 3-4% off of the entry price and gives me enough wiggle room to weather the choppiness of this market day-to-day. 
  • Day-traded SDS yesterday and sold at $16.51 from $16.58 for a -0.4% loss. 
  • Bought PCYC at $40.66 yesterday. 
  • Currently Long PPL at $27.65.

Charts:

d7d962d06181cd3c4892a198.png (600×625)

 

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