Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am), FOMC Meeting ANnouncement (12:30pm), FOMC Forecasts (2pm), Chairman Press Conference (2:15pm)

Pre-market Update (Updated 8:30am eastern):

  • US futures are flat ahead of the open.
  • European markets are trading mixed/flat.
  • Asian markets traded on average 1.1% higher.

Technical Outlook (SPX):

  • The market gave us a solid 1% move yesterday.
  • The move off of the June 4th lows is very similar to the bullishness that we saw in October of last year and September 2010.
  • Next level of resistance lies in the 1365-68 range. It’s not major resistance, but worth noting nonetheless.
  • Also important is the angle of the 10-day moving average, when it turns suddenly steeper in slope like it has over the past four trading sessions, it can be a good indication that the market is ready to rally for an extended period of time.
    • By steep I mean by more than 45 degrees. Refer to price action from late December 2011 and January 2012.
  • We are right back in overbought territory, but the thing is, if the market is indeed on a strong run, it can stay in this area, for quite a while.
  • Yesterday we pushed a shade outside of the upper Bollinger-Band – something I’m not a big fan of. If this continues in a more aggressive manner, I will likely book gains faster than originally anticipated.
    • Large moves outside of the Bollinger Bands usually leads to hard pullbacks.
  • There is now an established uptrend in place on SPX off of the 6/4 lows with consecutive higher-highs and higher-lows now (two of each).
  • FOMC statement comes out at 12:30pm est today – expect a lot of volatility to come with it in anticipation of further easing.
  • Quite a ways from current price, but ultimately, if the price can clear 1401 we’ll have a market that is very bullish.
  • SPX confirmed the inverse head and shoulders pattern on Friday.
  • Of late, respectable support lies at the 10-day moving average.
    • Has touched it multiple times in the past 2 weeks and held each time.
  • IH&S pattern very obvious on the 30-minute chart.
    • Confirmed on Friday.
  • Volume was fairly light yesterday.
  • A break below 1306 would represent a resumption of the downward trend.
  • VIX is back below 20 and is a bullish development for the market.

My Opinions & Trades:

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