Technical Outlook:
- First legitimate sell-off on SPX yesterday since April 7th.
- SPX finished the day trading below the 5-day moving average.
- Watch the rising trend-line off of the February 11th lows. Currently the trend-line sits at 2087.
- A slew of earnings came out last night and this morning resulting in hard sell-offs in Google (GOOGL), Visa (V), Microsoft (MSFT), Starbucks (SBUX), and Caterpillar (CAT).
- Weakness, as a result of the earnings, is most noticeable on the Nasdaq.
- Volume increased yesterday from the day prior and still trading below recent averages.
- On the 30 minute chart, SPX needs to hold 2073 today if it wants to avoid establishing a lower-low.
- VIX continued its bounce from the day prior – and exhibiting similar bounce tendencies to what we saw back in late July prior to the large sell-off.
- T2108 (% of stocks trading above their 40-day moving average) showed some signs of weakness yesterday, dropping 8.6% down to 75%. A move today below 70 would likely market a shift in the market’s outlook.
- It is very important to be aware of the potential for a strong pullback here and to manage your long position risk accordingly.
- For the bears, they need to get price action back below 2040 on SPX in order to establish a lower-low on SPX daily chart.
- 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 close out any positions yesterday.
- Added one additional position to the portfolio yesterday.
- Currently 30% Short / 70% Cash
- Remain long SPXU at $27.51 (short ETF).
- Remain short QQQ at $110.40
- Looking for the market to continue yesterday’s selling. Will cover the short positions, if the market reverses hard.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
