Pre-market update:- Asian markets traded 1.0% lower.
- European markets are trading flat.
- US futures are trading flat ahead of the market open.
Economic reports due out (all times are eastern): Housing Starts (8:30), Consumer Sentiment (9:55)
Technical Outlook (SPX):
- Heavy sell-off yesterday of nearly 1% that pushed price below 1883.
- Essentially, the two day sell-off that occurred on 4/4-7 was duplicated nearly perfectly.
- Like many times before we tested the 50-day moving average and held it like before.
- The reason why this is important is because the previous two sell-offs saw the dip buyers come in full force to drive the market significantly higher off of those lows.
- SPX off of oversold conditions.
- Also a rising trend-line off of the 4/28 lows that seems valid here.
- Volume on SPY and SPX was significantly higher than what we have seen recently.
- Bears have shown that despite having favorable market conditions time and time again, that they simply cannot push this market lower over a long period of time. I don't expect them to do it here either.
- Major milestones like 1900 can often lead to profit-taking as it represents a predefined/psychological level where investors decide to book their gains.
- Small caps continue to be the market's weak spot.
- The Market doesn't care about the economy nor earnings. That is not what is driving it. The market only cares about what the Fed is doing to keep equities propped up.
My Opinions & Trades:
- Added three new long positions yesterday.
- Covered TEL at 56.77 for a 2.4% gain.
- Closed BHI at 68.54 for a 2.1% loss.
- Closed KORS at 91.31 for a 3.3% loss.
- Remain short WEN at 8.19.
- Remain long GPK at 10.57, EMC at 25.79.
- Short 10% / 50% Long / 50% Cash
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