Technical Analysis:
- S&P 500 (SPX) rallied for a fifth straight day this week and well overextended. Still the market continues to rally.
- Volume on SPDRs S&P 500 (SPY) was once again above average and strong, though not to the same extent seen on Wednesday.
- Amazingly, SPY has been up 17 of the last 23 days since the week of the election – a 74% win rate, with dips quickly getting bought up.
- Quick bounce in CBOE Market Volatility Index (VIX) looks to be short lived, as the bounce itself is light and lacking momentum.
- Respectable bounce out of oil yesterday, after filling the gap on United States Oil Fund (USO) and bouncing higher thereafter. Look for another retest of the October highs.
- As I’ve said before, oil only matters when it is rallying. When it sells off, the market completely shrugs off its impact on the economy.
- SPX on the 30 minute chart is definitely stretched. and started showing signs late yesterday of consolidation.
- T2108 (% of stocks trading above their 40-day moving average) is rallying well right now with 75% of stocks above their MA. There is still room to run as it does’t get overbought until the 80’s are reached.
- The Federal Reserve has no choice but to raise rates next week. They are out of excuses and have put themselves into a corner. So far the market hasn’t paid a rate hike any thought. Last year the market didn’t sell off until after the FOMC Statement.
My Trades:
- Did not add any new trades to the portfolio yesterday.
- Did not close out any positions yesterday.
- May look to add some short exposure as a hedge against current positions.
- I will look to add 1-2 new swing-trades to the portfolio today.
- I am currently 50% Long / 50% Cash
Chart for SPX:
