Technical Outlook:
- SPX dealt with another rally that saw 2/3’s of its gains quickly wiped out before the closing bell.
- Last 4 days we have dealt with a market that cannot break through key resistance at 2120-2 area. Instead it is met with sharp selling in the afternoon.
- There has been a declining resistance in the short-term off of the 5/21 highs.
- A break below 2099 remains key for the bears to jump start the selling.
- For the bulls, as I have been saying every day of late, there needs to be a new all-time high established followed by an expansion in price.
- Watch the 50-day moving average which has been successfully tested twice in the last two weeks and has held perfectly each time.
- Going back to the 26th of last month, the market choppiness between 2100 and 2120 has been unreal on the 30 minute chart of SPX – like a game of “Pong”.
- VIX continues to get squeezed into its year-long narrowing range, closing down 4.1% to 13.66.
- Conditions remain very stagnant in this market and the idea of wanting to add more positions to the portfolio remains a difficult proposition for undertaking considering there is a true lack of “edge” to trade off of in this market. Wait for the break first.
- 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.
- Closed LM at 54.30 for a 2.3% loss.
- 10% short / 90% cash.
- Remain long: SDS (Ultra Short ETF) at 19.90.
- 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:
