Technical Outlook:
- One of the bigger trading ranges of late yesterday on the S&P 500 (SPX).
- Most significant was the fact that SPX didn’t give up all of its early gains as we have seen in recent days.
- Support continues to exist at the 10-day and 20-day moving averages and reclaimed the 5-day moving average yesterday.
- Volume is showing signs of returning with an increase again yesterday for the third straight day. But still below recent averages.
- Nasdaq (COMPQ) continues to consolidate for a fourth straight day. Needs to push out of this range to re-ignite the bulls. Meanwhile, the Dow Jones Industrial Average (DJIA) had new all time highs yesterday but there is still a double top pattern that is not quite negated yet and can still come into play should weakness creep back in.
- SPX 30 minute chart shows price action creeping out of the recent range. A solid positive for the bulls.
- For the bears: push price back below 2171, and proceed through 2155.
- T2108 (% of stocks trading above their 40-day day moving average) continues to diverge with only 68% of stocks above the MA.
- CBOE Volatility Index (VIX) still finding support in the lower 11’s. and could bounce hard here on any weakness.
- United States Oil Fund (USO) recovered nicely yesterday and looks to extend the gains into today. This is a must if the bulls are going to sustain this rally.
- The bulk of the earnings season is behind us. No significant disasters from the big names that reported that negatively impacted the market as a whole.
- Overall, August is the worst performing month for the Dow and S&P 500.
- At this point, and with the election ahead, I’d expect the market to keep rallying higher. I don’t expect there to be a rate hike between now and the election. To do so would impact the market and thereby the election. I don’t think the Fed wants that, particularly since Trump has indicated that he would replace Yellen.
My Trades:
- Added one new swing-trade to the portfolio yesterday.
- Covered JBLU yesterday at $17.15 yesterday for a 0.3% profit.
- May add 1-2 new swing-trades to the portfolio today.
- Will consider hedging the portfolio as well with a short position.
- Currently 70% Long / 30% Cash
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
