Pre-market update (updated 9am eastern):

• Europe is trading -1.6% lower. 
• Asian markets traded slightly higher. 
• US futures are down strong and in excess of -1%.

Economic reports due out (all times are eastern): FOMC Meeting Begins, ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Richmond Fed Manufacturing Index (10am)

Technical Outlook (SPX):

• Huge rally yesterday in the final 45 minutes to bring the market from down -10 points to finish in positive territory. 
• Despite the positive rally, SPX is gapping down over 16 points ahead of the bell. 
• Don’t throw in the towel yet… Gap downs typically are the bear’s worst enemy, usually seeing a bottom in the first hour of trading, and a gradual rally thereafter. 
• We are breaking down and below 1425 – the market’s key support. Assuming that holds, that puts us outside of the channel that’s we’ve been trading in since September. 
• We will also break below the 50-day moving average, which we’ve continuously seen the market bounce off of. 
• Next key level of support after 1425 is 1400. Break that level, and things will really start to get ugly. 
• FOMC Statement tomorrow – could there be an October Surprise? If Romney wins, it is unlikely Bernanke is reappointed in 2014.
• 30 minute chart looks extremely choppy, but mirror image of daily price action. If today’s weakness holds, you have a perfect triple top in play. 
• VIX back below 17. 
• Fed’s QE3 launch is going to add a lot of buying power to this market and drive more people out of interest-bearing assets and into equities in search of some kind of return. 
• One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3

My Opinions & Trades:

• No trades closed out yesterday.
• Shorted URBN at 36.32. 
• Bought WLT at $39.34. 
• Long AGU at $106.23. 
• Remain Short in CAKE at $33.97, EXPD at $35.65, and CPRT at $27.00.
• Track my portfolio RealTime here.

Chart for SPX: