Pre-market update (updated 8:30am eastern):
- European markets are trading -0.2% lower.
- Asian markets traded in a mixed/flat manner.
- US Markets are slightly lower heading into the open.
Economic reports due out (all times are eastern): Retail Sales (8:30am), Empire State Manufacturing Survey (8:30am), Business Inventories (10am)
Technical Outlook (SPX):
- Huge Friday with SPX bouncing off of it’s upward trend-line from the 6/4 lows and the 50-day moving average.
- From there, SPX needs to get back above 1374 (and most importantly close above it) to form form a new ‘higher-high’ in the market.
- Friday’s bounce came just as we were touching oversold conditions in the very short-term (weekly chart and SPRI shows a much more overbought market).
- After Thursday’s elongated lower shadow, I’ve decided to adjust the upward trend-line off of the 6/4 lows connecting it with that day’s lows.
- As a result, there is a well-defined channel that the market is trading in, and eliminates the bearish channel we had seen before.
- A break below 1329, would break the channel.
- Huge doji candle on the weekly SPX – some might say its a shooting-star, but I”d disagree, as it occurred inside of last week’s candle body.
- Nonetheless, it does represent some indecision by the markets, as well as underlying weakness, evident by the long lower shadow off of the body of the candle.
- During the six-straight days of sell-off that ended last week, the entire time, the bulls managed to keep the VIX under 20. Currently it sits below 17.
- 30-minute chart shows a nice bounce and breakout of the temporary downward channel.
- Breaking through the 1390’s will be difficult as there are plenty of separate resistance levels in that area.
- Below 1306-1308 price level, will nullify the current rally off of the 6/4 lows – would represent a ‘lower-low’ in the market.
My Opinions & Trades:
