Technical Outlook:
- SPX managed to pop higher in the afternoon only to give back 2/3’s of its gains to close 4 points higher on the day.
- Resistance at the 2120-22 level continues to be a problem for bulls on SPX.
- Overnight futures have rallied hard off of the overnight lows.
- In the very near term watch for a break below 2099 to see the selling accelerate.
- SPY volume was less than what we have seen of late and below Friday’s volume reading.
- Large upper candle shadows on the VIX chart. Some strong resistance on the chart when you draw the trend-line off of the October highs of last year that is likely the cause for the large shadows.
- RUT appears to be forming what could easily become a massive long-term head and shoulders pattern. Left shoulder and head already finished, now it is working the apex of the right shoulder.
- Good chance that the 50-day moving average comes into play today at around 2099 – which is the lows from last Tuesday as well.
- Ultimately the bears need to push price below Tuesday’s lows at 2099, while the the bulls cannot settle for anything less than new all-time highs.
- For the bearish case to really pick up momentum, a break below the previous higher-low would need to occur below 2067.
- A head and shoulders pattern has formed on the 30 min SPX chart. A break below Thursday’s lows would confirm the move.
- The problem with the bulls making new all-time highs during the course of 2015 so far, is that once they are established, nothing else happens; there is no rally that sees a rapid expansion in price.
- Instead the all-time highs have been quickly sold off by the market in general.
- The market doesn’t care about the economy nor earnings. That is not what is driving it. The market only cares about what the Fed is doing to keep equities propped up.
My Trades:
- I did not add any new positions to the portfolio yesterday.
- I did not close out any trades yesterday.
- 20% short / 80% cash.
- Remain long: SDS (Ultrashort ETF) at 19.90.
- Remain short: LM at 53.07.
- I’ll consider adding 1-2 new depending on the direction and strength of the market.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
