Pre-market update (updated 9am eastern):

• European markets are trading -0.7% lower.
• Asian markets traded 0.7% higher. 
• US futures are trading slightly lower ahead of the bell. 

Economic reports due out (all times are eastern): Jobless Claims (8:30am), EIA Natural Gas Report (10:30am)

Technical Outlook (SPX):

• While we finished higher yesterday, the overall market action was far from being what I’d consider bullish. 
• Massive head and shoulders pattern on the 5-minute chart that is still in play going into today’s session. 
• A break above 521 would effectively kill the H&S pattern. 
• Volume seems to be picking back up in the market. 
• VIX traded back up to 13 yesterday, despite the market finishing the day in positive territory – a bearish divergence. 
• Despite the early morning weakness, don’t get short right off the bat, the dip buyers love to come in after 10:30am and buy the market up right away. Let’s see if the same is true again today. 
• SPX continues to follow the 10-day moving average nearly perfectly. 
• Unlike previous breakouts of prior consolidation, this one lacks a lot of enthusiasm and momentum, which should concern the bulls. 
• But based on the price action at the present, the only direction we can confidently trade in is to the upside. 
• A pullback to 1475 would likely satisfy as a pullback to the lower rising channel, and be considered healthy for this market. 
• More than 60 days have passed since we’ve seen a 5% pullback in the markets.
• Only one day in the new trading year that has resulted in us closing down more than 1%. 
• 30-minute chart is looking overly bearish with the H&S that is on it. 
• 1495 remains as the necessary price level bears need to drive price below in order to get momentum on their side. 
• Market has creeped back into short-term overbought. On mid-to-long-term indicators, we have remained overbought for months now.
• There’s not much in the way overhead of the market not hitting all-time highs from a technical analysis standpoint. 
• The gappiness in both directions at the top of a major trend is not a healthy sign for the market. 
• Worries about European economies starting to re-emerge. 
• The channel that we are currently trading in looks very similar to the channel that we traded in last year from June through September. 

My Opinions & Trades:

• Closed out DVA at $119.12 from $116.20 for a 2.5% gain. 
• Added SJM at $90.25 yesterday. 
• Added WLL at $49.27 yesterday. 
• Won’t be able to hold DVA beyond today due to earnings coming out this week. 
• Remain Long FCX at $35.50 and POL at $23.16..
• Will likely add 1-2  new positions to the portfolio today. 
• Here is my real-time swing-trading portfolio and past-performance

Chart for SPX: