Today’s Trading Plan: At Critical Support

Technical Outlook:

• S&P 500 (SPX) for a third straight day, tested the 2120 support level and held it. There hasn’t been a strong, sustained bounce off of this price level though to suggest the market is done with the current sell-off.
• On the SPDRs S&P 500 (SPY) volume has decreased for a second straight day – volume readings remain well above recent averages. 
• Bounce attempt yesterday on SPX quickly faded into the afternoon to push the market lower on the day, and form a doji pattern. 
• The potential for a bounce here is real, though yesterday’s failed attempt suggests the market still wants to move lower still. 
• CBOE Market Volatility Index (VIX) rose 1.6% yesterday to 18.14. 
• T2108 – % of stocks trading above their 40-day moving average – saw a drop of 7% yesterday down to 27%. This is near the lows of what was seen during the Brexit vote. 
• The market as a whole is becoming oversold on a short-term basis. 
• The rally in Apple (AAPL) this week from $103 to $113 has helped the market substantially from breaking lower than what it already has. 
• Nasdaq (QQQ) has held on to the 50-day moving average for the third straight trading session. Break it, and a much bigger move should ensue. 
• Russell (RUT) made new closing lows for the third time in the last four trading sessions. A move below 1198 would represent a strong chance of direction for the market and would become drastically more bearish as a result. 
  
• SPX 30 minute chart shows the potential for a triple bottom in play. A break below 2120 will create much more downside for the market. 
• Crude (/CL) continues to reverse the recent gains. A break of the 9/1 lows will likely take it back to the critical lows established in early August. 

My Trades:

• Covered IBM yesterday at $153.97 from $157.49 for a 2.3% profit. 
• Did not add any new trades to the portfolio yesterday. 
• Remain short: TGT at $70.30, T at $40.63.
• May add 1-2 new swing-trades to the portfolio today. 
• Will consider adding new long positions to the portfolio if the market shows signs of putting together a possible bounce. 
• Currently 10% Long / 40% Short / 50% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

S&P 500 (SPX)