Technical Outlook:

  • Heavy sell-off early on was brought back to near break even by the close of business forming a large hammer candle on SPX. 
  • Very similar price action to what we saw last Thursday when the FOMC Statement came out and the market sold off all of its intraday gains. Except this time it was in the opposite direction. 
  • Bounce took place off of the lower Bollinger Band. 
  • SPY volume saw an uptick in volume and slightly above average as well. 
  • VIX continues to feel the selling pressure on days where it finishes higher. This time closing 6% higher at 23.47. 
  • Essentially a rally here keeps us range bounce between the 8/28 highs and the 9/1 lows. 
  • Price action of late has had a strong willingness to consistently revert back to the opening price by the market close. Any intraday movements away from the opening price on SPY is eventually faded. 
  • 30 minute chart of SPX is the messiest and most non-conclusive that I have seen it in ages. 
  • SPX has alternated up/down/up/down for 11 straight weeks, which ties an all time record for most consecutive reversal weeks. It is possible with the bounce today that this streak continues with a close to the upside. 
  • Seasonally speaking, this week and the two weeks that follow are considered the weakest trading periods of the year. 
  • For swing-traders the gains/losses are made overnight night and you have to be willing to hold overnight in order to profit. 
  • Furthermore the Fed has never raised interest rates at a point where the market was trading lower on the year. 
  • The large gaps in the market, the record number of stock buybacks, and ETFs that are constantly accumulating/dumping large chunks of stocks, and most importantly the high frequency trading, shows just how illiquid this market has become in recent years. These entities are the most responsible for the massive market swings that stocks incur each day. 


My Trades:

Chart for SPX:

S-P-500 Market-Analysi-9-25-15