• SP 500 Market Analysis 6-22-12

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

  • US futures are slightly higher ahead of the open.
  • European markets are trading -0.6% lower. 
  • Asian markets are trading -0.9% lower. 

Economic Reports Due out (Times are EST): None

Technical Outlook (SPX):

  • SPX saw one of its biggest sell-offs of the year yesterday. 
    • Broke through the 10-day moving average, that had previously acted as reliable support for the market. 
    • Interestingly, the 100-day moving average has been a tough resistance barrier over the past 3 days. 
    • 50-day moving average was also broken without any fight. 
  • It’s safe to say we are no longer overbought this morning. 
  • Wednesday and Thursday’s volume levels are significantly higher on the SPY than what we saw on Monday and Tuesday when the market was up. 
  • We broke the upward trend-line in SPX yesterday.
    • However, that doesn’t mean the uptrend is over, but the steepness and acceleration does flatten out, and puts into question where the market bottoms out at. 
    • A drop below 1306 is what I’m watching for a shift in market sentiment. 
  • The move off of the June 4th lows is very similar to the bullishness that we saw in October of last year and September 2010. 
  • There is now an established uptrend in place on SPX off of the 6/4 lows with consecutive higher-highs and higher-lows now (two of each). 
  • SPX has a confirmed the inverse head and shoulders price pattern in place. 
  • 30-minute chart shows price action pulling back to support and the previous area where significant consolidation occurred. 
  • VIX back above the pivotal 20 level. 

My Opinions & Trades:

  • Yesterday’s continual sell-off puts inserts fear right back into this market. 
  • I’m taking a wait-and-see approach. 
  • Sold PCYC at $47.17 from $40.66 for a 16% gain
  • Sold LF at $10.28 from 10.60 for a -3% loss
  • Sold AH at $11.94 from $12.50 for a -4.5% loss. 
  • Sold CHD at $52.81 from $53.95 for a -2% loss. 
  • Shorted CHD at $52.74. 
  • I am still long AMZN at $221.60 and WNR at $20.51

Charts:

 SP 500 Market Analysis 6-22-12

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