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S&P 500 Could Climb From Early Lows

Market stuck in narrow channel with support at 1278


Current Long Positions (stop-losses in parentheses): MWV (26.37), MMM (85.55), FCX (118.75), FSLR (135.30), FFIV (140.95), SLB (81.35)

Current Short Positions (stop-losses in parentheses): None

BIAS: 35% Long

Economic Reports Due Out (Times are EST): Consumer Price Index (8:30 a.m.), Retail Sales (8:30 a.m.), Industrial Production (9:15 a.m.), Consumer Sentiment (9:55 a.m.), Business Inventories (10 a.m.)

My Observations and What to Expect:

  • Futures are showing moderate weakness.
  • Asian markets were mixed while European markets trading with some weakness.
  • Price action that we’ve seen since Wednesday is very similar to the price action from Jan. 3 to Jan. 5. If that is the case, we could see some strength off of the morning lows today.
  • No major price-pattern resistance overhead, instead it is coming in the form of a narrow channel that the market has been trading within since Dec. 1 and also an upper Bollinger Band that currently rests at 1288 on the S&P 500 Index.
  • There should be some support at 1278 on the S&P.
  • 1261 represents the short-term ‘higher-low’
  • Volume continues to be average, with no developing trends or concerns.
  • The more long-term trend-line dating back to Sept. 1 has support at 1242.
  • For the bears – follow through on yesterday’s negative finish and close below Wednesday’s lows.
  • For the bulls – show the “Buy-the-Dip” theory is in full force and close the week out at new highs.

Here Are The Actions I Will Be Taking:

  • Not willing to add new positions to the portfolio today while the weakness persists. Will sit out the early morning at the very least, before deciding on any new positions.
  • Added Schlumberger (NYSE: SLB) at $84.57 and F5 Networks (NASDAQ: FFIV) at $144.80 – both breakout plays.
  • Stopped out of Freeport McMoRan (NYSE: FCX) yesterday at $118.75 for a 2.7% loss.
  • All the stop-losses remain as is.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.

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