Economic Reports Due out (Times are EST): NFIB Small Business Optimism Index (7:30am), ICSC-Goldman Store Sales (7:45am), Import and Export Prices (8:30am), Redbook (8:55am), Treasury Budget (2pm)
Pre-market Update (Updated 8:30am eastern):
- US futures are slightly higher.
- European markets are trading 0.4% higher.
- Asian markets traded on average 0.7% higher.
Technical Outlook (SPX):
- Major sell-off reversal yesterday and finished significantly lower on the day with a huge SPY bearish engulfing pattern.
- Market is coming off of short-term overbought conditions, but just slightly with yesterday’s sell-off.
- Broke back below the 20-day moving average but found support at the 10-day MA.
- Bullish wedge breakout still intact
- S&P needs to get back above 1334, to change the mood of the market. Much more bullish above that price level.
- Volume remains relatively average.
- The markets in general have pulled back roughly 10% off of its recent highs which is typically considered a “pullback” in the markets.
- The possibility also exists that we are putting in a very short-term inverse head and shoulders pattern on the S&P, in which we would unlikely push past 1334 before pulling back moderately to form the right shoulder.
- Major bottoms or at the least, interim bottoms, tend to make huge gains in the initial days following the bottom. See last October and September 2010.
- Minor support at 1249, 1209 would also represent a level of price support, should we close below 1266 support. .
- 30-minute chart has an inverse head and shoulders pattern with a small right shoulder.
- VIX is still elevated and rests above 23 – below 20 and the bear’s hopes for a break higher is greatly hampered. .
My Opinions & Trades:
