News Column

Today's Trading: Markets and Yellen Collide

February 11, 2014

Ryan Mallory

Pre-market update:

Asian markets traded 1.4% higher. European markets are trading 0.6% higher.US futures are trading 0.1% higher ahead of the market open. 

Economic reports due out (all times are eastern): 
ICSC-Goldman Store Sales (7:45), Janet Yellen Speaks (8;30), Redbook (8:55), Janet Yellen Speaks (10), Wholesale Trade (10)

Technical Outlook (SPX):

SPX continues to rally, but yesterday would be more of a digestion move for the market as it tries to absorb the previous two days worth of moves without giving up the gains. New Fed Chairwoman, Janet Yellen, will dominate the news and her testimony will be the driver of price action today. The 20-day, 50-day moving averages as well as the 1800 price level loom as obstacles for the market to get past. Heavy price resistance should lie at 1809 on SPX. Volume tapered off dramatically and was below average yesterday. VIX settled in at 15.26. SPX 30-minute chart is extremely over extended after massive move off of last week's lows. These rallies off of significant pullbacks like we have seen over the past week of trading can actually go for higher than one would expect, and can rally for 2-3 weeks without any significant selling taking place. The biggest technical stronghold is the strength the market found from the trend line that started off of the August '13 lows. A lower-low has now been formed on the SPX chart. Markets don't care about the economy nor earnings. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up. 

My Opinions & Trades:

Closed out GA at $11.24 yesterday for a 1.5% gain. Added one additional long yesterday. Remain long SPLK at 75.00 and MU at 23.19, BHI at 56.98, BAS at 17.15, BAC at 16.83.Will consider 1-2 new positions based on market conditions. Long 60% / Cash 40% Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 2-11-14

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Source: Shareplanner

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