Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), Productivity and Costs (8:30am), EIA Petroleum Status Report (10:30am), Beige Book (2pm), Treasury STRIPS (3pm)

Premarket Update (Updated 7:30am eastern):

  • US futures are up strong, well over 1%. 
  • European markets are trading 1.5% higher. 
  • Asian markets traded on average 1.6% higher. 

Technical Outlook (SPX):

  • We experienced a slight bounce yesterday, but even so could not close above the 200-day moving average. 
  • Today ‘s morning strength potentially puts us back above 1300, and would represent about a 33 point bounce off of Monday’s lows. 
  • We remain oversold in both short and long-term time-frames. 
  • Watch 1310 area as a potential break-point in the current downtrend and a move above the existing bullish wedge that is forming. 
  • The S&P is now trading below all major moving averages. 
  • Bullish wedge forming on the daily, that has been little noticed by other traders. We bounced off of the lower end of the wedge at Monday’s lows. 
  • Minor support at 1249, 1209 would also represent a level of price support, should we close below 1275 support. . 
  • 30-minute chart shows a bounce playing out here. 
  • Nearest level of resistance for the S&P is at 1334 and 1340 and then again at  1357. 
  • VIX is still elevated and rests above 24.

My Opinions & Trades:

 

  • Don’t be too anxious to re-short this market – let this bounce play itself out. 
  • Risk is elevated for new positions to the short-side. 
  • Bought PPL yesterday at $27.65
Charts:

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