Technical Outlook:
- Three day rally this week continues to maintain a strong course higher that will likely test 2100 either today or next week.
- Since the initial break, volume has dropped each of the last two days and was dramatically weaker yesterday and well below recent averages.
- Personally, I wouldn’t be surprised to see the market reverse very soon here, and start heading back lower again. I’ve seen a lot of late stage breakouts in individual charts of late, that trend higher for a few days before taking on huge amounts of selling thereafter. I’m not saying this will certainly happen, I am just saying to be aware of it.
- The 5-day moving average re-crossed the 10-day moving average – this time to the upside. A quick turn of events to say the least.
- At this point, the market has provided a couple of very clear levels to be aware of going forward – on SPX it is the 2033 level or last week’s lows. The second level is at 2022 or the 3/24 lows.
- The T2108 (% of stocks trading above their 40-day moving average) is back at 82%, though it traded slightly lower yesterday.
- VIX is heading back towards support that goes all the way back to the July 2014 lows and trends slightly higher.
- SPX 30 minute chart looks healthy, though stretched in the shorted term as it broke out of the distribution channel that it was stuck in last week.
- Possible bull flag on the USO daily chart is forming.
- Between 2040 and the all-time highs the price action is very congested with plenty of resistance.
- April has been bullish in nine of the last ten years.
- Yellen’s dovish outlook as it pertains to rate hikes has been, in large part, the reason for the massive rally off of the February lows.
My Trades:
- Did not place any trades yesterday.
- Did not close out any swing-trades yesterday.
- Currently 10% Long / 90% Cash
- Remain long TLT at $129.52
- Will look to add short or long exposure here today depending on the direction the market decides to take.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
