Pre-market update (updated 9am eastern):

  • European markets are trading mixed & flat.
  • Asian markets traded -0.4% lower.
  • US futures are significantly higher ahead of the bell.

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Consumer Price Index (8:30am), Housing Starts (8:30am), Redbook (8:55am), Industrial Production (9:15am)

Technical Outlook (SPX):

  • Huge sell-off across the board that saw over 90% of all stocks finish in the red. 
  • Notice how the sell-off came on the heels of us trading well outside the upper Bollinger Band. 
  • Heavy volume that was the strongest since last month’s options expiration. 
  • That one day of trading pushed us back below the 10 & 20 day moving averages, that is despite us just trading at all time highs. 
  • Often times these heavy +90% down days, are met with a heavy market bounce as a result. 
  • Don’t assume this market will simply got through a dead-cat bounce  process. We have not seen a dead-cat market response in ages. These bounces, tend to rip to new  highs. 
  • Gold and silver had historic sell-offs the likes of which hasn’t been seen in years. Expect more of these types of days as Europe continues to collapse under its own economic weight. 
  • SPX managed to trade back into the previous consolidation zone, which nullifies the breakout we had experienced last week. 1538 is a KEY price level. If we break below it, conditions become increasingly bearish. 
  • 1545 represents the rising, lower channel band. As long as that rising level is not violated the trend thereby remains intact.
  • VIX leaped an astounding 43% yesterday, and well outside of its upper Bollinger band. 
  • Markets don’t care about the economy. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up. 
  • Both channels (July October 2012) and the price channel we are currently in are very similar in nature. 
  • We haven’t seen a market pullback in excess of 4% since October/November time-frame. 

My Opinions & Trades:

Chart for SPX:

SP 500 Market Analysis 4-16-13

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