Pre-market update (updated 8:30am eastern):
- European markets are trading 0.7% higher.
- Asian markets traded 1.2% higher.
- US futures are moderately higher ahead of the open.
Economic reports due out (all times are eastern): Jobless Claims (8:30am), Existing Home Sales (10am), Philadelphia Fed Survey (10am), Leading Indicators (10am), EIA Natural Gas Report (10:30am)
Technical Outlook (SPX):
- We finished just a shade below that critical 1374 resistance level. Today’s early morning pre-market strength has us gapping up and through this price level.
- By finishing above this price level, we’ll essentially put in a new higher-high in the market, but only the closing price matters.
- Yesterday we managed to break through the descending trend-line off of the 4/2 highs (see chart below).
- Weak jobless claims number may provide some headwinds for the market today .
- A close below 1325 would create both a lower-high and a lower-low, and thereby turn the market bearish.
- It didn’t take long but SPX is back into short-term overbought.
- Weekly shows SPX coming off of overbought levels, ever so slightly.
- Not any more. There’s actually the possibility that we are forming a head and shoulders pattern on the daily chart when looking at the action from the past month.
- Volume continues to provide low readings.
- Watch the SPRI – it shows a much more overbought market.
- After last 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 1333, would break the channel.
- The VIX remains under 17.
- 30-minute chart shows somewhat of an inverse head and shoulders pattern, and support at 1356.
- Breaking through the 1390’s will be difficult as there are plenty of separate resistance levels in that area.
My Opinions & Trades:
