SPX/ES Market Outlook

Thanks, i think price outlooks have been mentioned in most posts, will try to make it clearer. Other perspectives and analysis are welcome.

Yet another gap up at the beginning of the trading week. The pattern for SPX has largely been to trade sideways the rest of the week. ES overnight high is 1302.5, an equivalent of SPX 1307. SPX is up 14 of the last 19 trading days and over 100 points in less than a month. There is still a tremendous case for the downside, with ample negative news transpiring, but the tape cannot be denied. If ES breaks the overnight high, SPX 1300 will quickly become support, which will likely be retested before a rally resumption. The best guess for SPX last Friday, projected last Monday, was 1291 and missed by 2 points. While tempting to call for a move to the downside to the 1265 area with MA and price support, best guess for SPX on Friday is 1304.

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
1370.58, high of 5/2/11
1359.44, high of 5/10/11
1356.48, high of 7/7/11
1347.00, high of 7/21/11
1307.28, Fibonacci 78.6% of 2011 range
1296.82, high of 1/12/2012

The S&P 500 Composite Potential Support
1277.58, low of 11/3/2012
1265.26, low of 1/5/2012
1262.30, low of 12/27/2011
1257.89, 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

Source: Robert Colby
 
I wouldnt be putting to much focus on any of these levels since the markets are now focusing on earnings, this week alone there are earnings from google, intel, ibm, goldman and general electric. Next week brings even more earnings reports, so the markets will be moving based on these earnings the next few weeks. Im sure 75% of the companies reporting will beat, thats been the case for quite sometime as they under promise and over deliver, they usually set the bar so low for these companies that every earnings report looks like better than the next.
 
Well, I'm sitting on the sidelines for a while this week as I'm not sure where we are going. Typical pattern so far of a gap up in the S&P from the futures and premarkets (and I don't know where this premarket trading takes place) and then it ranges with little chop during the live trading day. I suspect we may be slightly bullish like this through the Jan 26 fed meeting.

There are a lot of earnings being reported this week and I suspect there may be alot of people playing the earnings this week and next which may be the basis for the buying going on. It will probably keep us short term bullish for a couple weeks or so. I can't pick a top yet so I'm hesitating for now and am not ready to place a trade on the SPXPM. (during monthly option week I trade the spxpm which has a Friday afternoon close instead of the spx with the Friday morning close.) This is monthly options expiry week so there may be a large swing come Thursday and particularly Friday. If and when I place a trade, it will likely be a bear call as I don't think we can go up much.

Otherwise the markets are parabolized and marking time for a downturn correction. The s&p has also appeared to decouple from the bond market. Whenever gravity causes this downturn to happen, I will be hunting the market bottom and then bring my 401K account out of cash on the sidelines and move it into equities.
 
Decided to sell some Jan 12 spx 1315/1320 bear calls earlier when it was at 1298 and the premium mark was .82. Then the spx dropped. Ended up with a .55 premium at 1293. Have more trying for .60 which is at the mark but sometimes I have trouble getting filled at the mark. With spx at 1298, the 1315 call had a 19% probability of expiring itm.
 
The SPX march higher continues with a new multi month high today. Dow is slightly lagging but is very close to a multi month high as well. The Tuesday overnight high for ES is also looking to be broken. Transports are also leading the way higher with NDX and COMP hitting multi month highs. the market continues to be overextended but the tape is continues to show buyers coming in. SPX 1305 by Friday looks conservative with 1311 looking more likely with this trajectory.
 
Quote from bc1:

Decided to sell some Jan 12 spx 1315/1320 bear calls earlier when it was at 1298 and the premium mark was .82. Then the spx dropped. Ended up with a .55 premium at 1293. Have more trying for .60 which is at the mark but sometimes I have trouble getting filled at the mark. With spx at 1298, the 1315 call had a 19% probability of expiring itm.
More...

thanks for the input, 'appreciate it.
 
Noticing that the signal on the DAILY ES Futures has crossed below the MACD line. There is some resistance at the primary downtrend line from the summer highs. I would be suprised if we dont get a little bit of pause if not a move lower. Lets we'll see how much strength the bulls have or if we end up reversing.

We pretty much have strong resis in a lot of sectors. Look at SOX at 404 is the weekly high from April 2010 We came right to it today.

Railroads negative

Transports still off the highs and looks like double top on daily.


VIX still above 20.

To me lot of indicators for some pause or reversal.

If you have longs I would look to exit or tighten your stops up.
 
SPX/ES continue with their relentless grind higher. Overnight highs continue to be made, and intraday highs are also surfacing. The January effect seems to be in full force, despite how overextended the market may appear. There should be considerable overhead supply in the 1315 range so a pause there could be in the cards. 'Standing by the 1311 close prediction for Friday, but at this rate SPX could be over 1320 none the less. VIX continues to decline, once again flirting with 20. For now, the market sprints up a wall of worry as more multi month highs are cleared.
 
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