Technical Outlook:
- SPX gave back much of its gains from the day yesterday providing a weak showing against what could have been a very strong day for the market.
- This is starting to become a regular phenomenon where the market is off to a nice start, the bears come in during the east coast lunch hour, and drive the market downward for the remainder of the day.
- SPY volume was stronger yesterday than the day prior but still well below average readings.
- VIX dropped below the 12 level but once again, the support level where all the reversals have taken place at for the past year, held firm and resulted in a bounce off of those levels.
- T2108 (% of stocks trading above their 40-day moving average) remains at 36% – a very weak reading considering the market is only 1.5% away from its all-time highs.
- Huge convergence of moving averages right at current price level – this has has had a mildly bullish effect on the market the previous occurrences.
- SPX still has an inverse head and shoulders pattern on the 30 min and daily chart. However, it is starting to struggle the completion of the right shoulder.
- The key for the bears will be to break the 7/27 lows.
- Solid support for SPX at the rising 200-day moving average.
- With a higher-low off of the 200-day moving average and possibly a lower-high formed on Friday, you essentially have the making of a range inside of a range.
- Nasdaq is by far the best chart among the indices right now. Others are very much range bound, but the Nasdaq has established a higher-high and higher-low. If Apple (AAPL) can actually join this rally, which is a large % of the Nasdaq, the rally could really take off.
- My biggest ongoing concern with the market right now is the inability to establish new, clear-cut all-time highs that leads to an expansion of price as well. Instead SPX gets bogged down in the 2120-2130’s range and reverses course each time.
My Trades:
- Sold NFLX yesterday at 124.92 for a 16.1% gain.
- Did not add any new positions to the portfolio yesterday.
- 30% Long / 70% cash.
- Remain long: QLD at 77.84, FB at 94.71, MSFT at 47.48.
- Will look to add 1-2 new positions today if the market can find its footing again. Otherwise, I will manage my current positions and consider some short opportunities.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
