Pre-market update (updated 9:00am eastern):

  • European markets are trading 0.6% higher.
  • Asian markets traded 0.7% higher.
  • US futures are slightly higher ahead of the bell.

Economic reports due out (all times are eastern): NFIB Small Business Optimism Index (7:30am), ICSC-Goldman Store Sales (7:45am), Producer Price Index (8:30am), Retail Sales (8:30am), Redbook (8:55am), Business Inventories (10am)

Technical Outlook (SPX):

  • S&P finished lower for the first time in seven sessions.
  • Volume has become nearly obsolete and in line with holiday like volume. In fact volume has decreased 8 out of the last 9 sessions.
  • Such low volume levels leads me to believe that we may be weakening under the surface and that the slightest bit of bad news accompanied with volume will trigger a stop-order raid on the bulls.
  • The choppiness that has been a part of the trading action is due in large part to the low volume levels as well.
  • We remain well-overbought on all time frames.
  • Watch the 10-day moving average for minor support at 1392.
  • Next level for bulls to overtake is the 1422 recovery highs on the SPX.
  • It’s not uncommon to see large market rallies going into an incumbent re-election.
  • If you look at the 4 previous higher-highs in the market since the 6/4 bottom, then one could conclude that we’ve reached another temporary top, and are prime for another pullback.
  • 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
  • At this point, uptrend support rests at 1356.
  • SPX trading above all significant moving averages (10,20,50,200).
  • VIX has moved below 15 for the first time since March.
  • If another sell-off were to ensue, watch for a break and close below 1354 for a new lower-low in the market.

My Opinions & Trades:

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