Pre-market update (updated 8:30am eastern):
- European markets are trading 0.4% higher.
- Asian markets traded in a mixed/flat manner.
- US futures are slightly higher ahead of the opening bell.
Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am)
Technical Outlook (SPX):
- We saw dip buyers jump in after establishing the lows from the first hour’s trading today.
- Volume was incredibly low today. Interesting tidbit – while the SPY hit a 52-week high, its volume hit a 52 week low.
- We’ll once again look to challenge the 1422 level to see whether we can break through resistance and post new recovery highs.
- It’s not uncommon if we consolidate below this resistance level for a while. You just don’t want to see a steep sell-off after touching the 1422 level.
- The 10-day moving average is trailing price nicely and is offering solid support, but is close to parabolic.
- We remain overbought both in the short and long-term time frames.
- VIX is at unbelievably low levels that haven’t been seen since 6/2007 – currently it sits at 14.
- You may also see a pullback to 1405, which is the top consolidation range the market pulled out of. That too may offer a level of support for SPX as well before eventually breaking through 1422.
- It’s not uncommon to see large market rallies going into an incumbent re-election.
- 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 1368.
- SPX trading above all significant moving averages (10,20,50,200).
- 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:
