SPX/ES Market Outlook

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EliteThink

This is a place members can state their views on where the market is heading over various time frames. I like to discuss 1 week, 1 month and 3 month time frames. The purpose is not to create conflict of opinions but a place where individual analysis can be explained for many to benefit. Preferred format would be daily short posts of market viewpoints, with possibly some positive feedback.

1/4/12

Happy New Year, the markets opened with a bang yesterday with a significant gap up. With yesterday's move, the December double top was taken out, as well as the November's high. October's high is still in tact. 10 trading days ago spx was at 1200 so it may be a little overextended. The ATR has also compressed significantly, which may indicate we are topping out, and a move beyond 1300 will come, at the earliest, after another pull back and gap closure from yesterday. The 200 day ma continues to drop fractionally, the techs have broken out of their wedge patterns to the upside and the dj30 is at a 6 month high, typically considered bullish patterns. If 1307 is broken to the upside, there is very little resistance before 1350. SPX continues to follow the sentiment of the EUR/USD, so it is quite likely volatility will come back in a big way once European headlines come into focus again. This weeks projected range is 1250-1290 with a 1 month target of 1300. 3 month target is 1325.
 
I'm kinda guessing here but I'm just doing otm bull put credit spreads on the weekly spx right now and the Jan bidu. I'm basically sideways with a short term bullish trend for the spx. I would have to see it hit about 1300 by Friday to see any type of breakout going up.

I also noticed that the eur/$ decoupled from the spx today. Maybe starting a new feel good uptrend with the new year?

I just can't see the spx doing much upward with 100 bux oil but it seems to have decoupled from it too. Maybe there is some hope for some more QE with the 1-26 fed report.

With the new tax/accounting year, maybe we are seeing some buying for a while so the funds and institutions can reset their base numbers for their percentages.

Right now with Jan week 1 closing on Friday and the spx at 1277, I'm trying to decide on a ntm spread trade for tomorrow while there is still some premium left.

Then the next step is to figure out what is driving the overnight futures every night that gives us all these wide gap ups and downs everyday.
 
Thanks for the post.

Vix continues to crater, and nasdaq is virtually breaking out of the head and shoulders pattern, as well as breaching Tuesday's hi. Rut continues its uptrend of the last 6 months. spx is trying to break the Tues hi, and it looks like the atr may attempt to increase from here, not surprisingly after the holiday break. If ES 1283 is taken out, I feel spx 1300 is here mid next week. Uptrend from Oct low still in tact.
 
It just seems to me that equities appear a little more bullish than bearish with the start of the new year. Not sure there is much volume there but must be big money driving it for now. Eur/usd is down to 1.2788 and s&p is at 1281.00 so for two days now we aren't coupled to the euro or the dollar indexes.

Jan week 2 opened up and I pondered between spx call or put credit spreads. Decided we are short term bullish into next Friday and probably beyond so I traded some 1230/35 and 1235/40 bull put contracts on spx.
 
U.S. equities have yet to hit a RTH weekly high as ES is setting the high overnight and stocks are not making the same move in RTH. Yet another overnite high this morning for ES. The market is showing trepedation, but we could see a breakout in the latter half of the day. The dow continues to trade inside of Tuesday's range. To me, the market is looking tired as it approaches October's high, and atr continues to compress relative to the last 3 months. Call option premiums are contracting quickly and eur/usd continues to fall and the spx is holding its ground.
 
Quote from EliteThink:
Uptrend from Oct low still in tact.
More...
NOPE.

Quote from bc1:
It just seems to me that equities appear a little more bullish than bearish with the start of the new year. Not sure there is much volume there but must be big money driving it for now. Eur/usd is down to 1.2788 and s&p is at 1281.00 so for two days now we aren't coupled to the euro or the dollar indexes. Decided we are short term bullish into next Friday and probably beyond so I traded some 1230/35 and 1235/40 bull put contracts on spx.
More...
NOPE.

Quote from EliteThink:
i agree, the decoupling is a major development.
More...
aka 'this time it's different'
NOPE.

Quote from EliteThink:
...eur/usd continues to fall and the spx is holding its ground.
More...
NOPE.
 
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