This week looks to be another active week of trading with the SPX closing Friday at 873 on the cash and a bit lower on the futures. The last hour selloff on Friday caught lots of people off guard, myself included. I think it was just a Friday into the weekend no body wanted to be long ahead of the G20 and match that up with the hedge fund redemption deadline and we saw lots of selling in the last hour after the market raced up to the 915 level earlier. Futures are getting a nice pop as of this writing Sunday night.
For this week I think it is fairly simple technically. To go higher the SnP's need to get over the 880 mark and if we rally further then 915 resistance will become the key level. We most surely would need this market to hold the 845-855 levels to prevent another leg lower. I think we could be setting up for a nice ascending triangle on the 15min chart if we hold current levels. As Johnny from daytradingradio.com says here the 915 level provides tough resistance for this market as it was denied at 915 multiple times last week. But if we break 915 then watch for some serious upside.
Economic data being released this week includes Monday's NY Empire State Index, Capacity Utilization, Industrial Production. Tuesday we have PPI. Wednesday gives us CPI, Building Permits, Housing Starts, and the FOMC minutes. Thursday we get Initial Claims, Leading Indicators and Philly Fed.
Looking at the VIX it closed the week at a 66 handle and is just above its 20 day moving average which sits at 62. This is an important area to keep an eye on and see if the VIX can hold. I think I would be looking for the VIX to come in a bit if it cannot hold its current mid 60s area. The VIX 50 day MA is still rising and is now just over 50. It should be interesting to see if the VIX can hold above this key moving average on its next pullback which we may see this week.
Buy the Dips: APOL, DV, KR, JBLU, PTRY
Sell the Rips: WY, ALL, CMED, GLD, AKAM, BAC, BAM
Overall I am expecting a small rally higher this week but I do not think we have bottomed. At the least we will probably retest the lows in the near future. Who knows when but before that I think we can see a bit more upside in the SPX so lets start the week with that bias and see what Monday brings us. Remember watch the 880s and 915 level for resistance.