SPX/ES Market Outlook

SPX is currently working on 3+ negative days signifying momentum is decreasing. Statistically, a pull back is warranted, but one to speak of has not yet materialized. Technology continues to lead, headed by AAPL. The metals appear to be responding as if the headline news is worse than the actual news. There may be another attempt to retest 1333 before an actual move lower transpires. Seasonally, February is often the opposite of January, but it really may just come down to negative news subsiding and how well tech holds onto their gains. Good Trading.


The S&P 500 Composite Potential Resistance
1576.09, high of 10/11/2007
1552.76, high of 10/31/2007
1523.57, high of 12/11/2007
1498.85, high of 12/26/2007
1440.24, high of 5/19/2008
1406.32, high of 5/29/2008
1381.50, Fibonacci 78.6% of 2007-2009 range
1376.55, Fibonacci 100.0% projection 10/11 range
1370.58, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11
1349.31, Fibonacci 87.5% projection 10/11 range
1347.00, high of 7/21/11
1333.47, high of 1/26/2012

The S&P 500 Composite Potential Support
1300.49, low of 1/30/2012
1277.58, low of 1/13/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1257.20, 200-day SMA
1257.46, low of 12/30/11
1257.58, Fibonacci 61.8% of 2011 range
1255.22, high of 12/22/2011
1248.64, low of 12/29/2011
1244.80, low of 12/7/2011
1239.73, low of 12/1/2011
1238.81, Fibonacci 78.6% of 1,576.09 high
1234.81, low of 11/3/11
1231.04, high of 12/16/11
1226.64, low of 11/9/2011
1222.68, Fibonacci 50% of 2011 range
1224.57, high of 12/19/11
1215.20, low of 12/16/11
1209.47, low of 12/14/2011
1209.43, low of 11/17/2011
1204.49, Fibonacci 23.6% of 2009-11 range
1202.37, low of 12/19/11
1187.77, Fibonacci 38.2% of 2011 range
1158.66, low of 11/25/2011
1144.38, Fibonacci 23.6% of 2011 range
1101.73, Fibonacci 38.2% of 2009-11 range
1074.77, low of 10/4/2011
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1018.69, Fibonacci 50% of 2009-11 range
1008.55, Fibonacci 38.2% of 2009-2010 range
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
943.29, Gann 50.0% of 2009-2010 range
935.64, Fibonacci 61.8% of 2009-11 range
878.04, Fibonacci 61.8% of 2009-2010 range
874.17, Gann 62.5% of 2009-2010 range
869.32, low of 7/8/2009
817.40, Fibonacci 78.6% of 2009-11 range
805.17, Gann 75.0% of 2009-2010 range
785.13, Fibonacci 78.6% of 2009-2010 range
666.79, intraday low of 3/6/2009

Data Source: Robert Colby
 
The grind higher continues. It is hard to tell if the market is running out of steam, or waiting for the employment number for its next reason to gap higher overnite. The Golden Cross did occur without much fan fair. EUR/USD appears to have stalled for now and the Dow seems less enthusiastic than tech. The Vix is off again and front month calls appear to be losing a good chunk of premium today. I've long thought the weekend premium acceleration begins on Thursday. But in light of the employment report, there is usually a holding, or increase, of premium levels going into the employment report. Tech appears to be doing well even with AAPL off the highs. Confidence appears to be growing in the US, but the metals continue to rally. Perplexing. The best guess for tomorrow's close was 1333. A pop in the morning could make that happen. Still the 1287 level is calling, and thus far the chart is ignoring the call.
 
SPX received it pop. there are several highs in 2011 in the 1340 area but at this point all calls on resutance are off. Yet another gap up for technology as the tear continues with RUT going parabolic. Eur/usd is off today and it is shrugged off by US equities. spx 1340 is key for the slight possiblity of a reprieve. The reality is that 1.1 million people have stopped looking for jobs improving the employment stats. The market is already up 1 atr5, yet to be seen is how much farther it can go.
 
Market days after the superbowl have a history of being sublime. Absent the overnight pop, price drops are met with buyers, albeit on low volume. Markets are overextended, technology and RUT even more so. But...it could continue. If a pull pack arrives, 1305 is likey, it is simply far fetched at this time.
 

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Quote from EliteThink:

Market days after the superbowl have a history of being sublime. Absent the overnight pop, price drops are met with buyers, albeit on low volume. Markets are overextended, technology and RUT even more so. But...it could continue. If a pull pack arrives, 1305 is likey, it is simply far fetched at this time.
More...

There is no way you can declare tech overextended when there was a whole slew of big tech companies reporting massive earnings. Seriously now, I think the reaction on IBM and AAPL ( for example ) is fairly tame considering the fundamentals.

Lot of cash in tech company coffers. Heard today that 30% of MSFT equity is CASH. Unreal !!!
 
Yesterday was interesting as the transports were weak while the broad market performed better. Sign of divergence as we approach resistance in the S&P. Also looking at the NASDAQ futures they have run very hard very fast. Becoming very parabolic just signs of caution if the NQ breaks it could retrace quickly to the downside.

Have Feb 22 calls, also added some March 20 calls for about 2.30. VIX is low protection is cheap especially since they keep pushing this Greece thing off. Which was suposed to be last weekend is now being pushed off to next week!
 
Agreed, and noticed that as well, dj20 looks like it is rolling over. Starting to see cracks in the momentum, but rational is out the window at this time. Tech and RUT continues to hold the gap up. Ammo was showing the outflows of SPY yesterday. This would be a great place for smart money to distribute and go short.
 

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Look at the Volume in TVIX over the past week, it has been a lot higher than normal. Looks like people are starting to position in that. Volatility is cheap and traders will take advantage of the volatility.

That volume on the TVIX is very interesting to me though, keep your eye on that.
 
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