Technical Outlook:
- Massive breakout of consolidation on Friday following the employment report.
- Moving forward, the 20-day moving average appears to be the key moving average for the market.
- S&P 500 (SPX) broke back above the 5 and 10-day moving averages yesterday.
- Friday’s move could spur the market on to test 2200.
- SPDRs S&P 500 ETF (SPY) saw an improvement in volume on Friday, but still well below recent averages.
- 30 minute chart of SPX shows consolidation in the form of a bull flag.
- CBOE Volatility Index (VIX) continues to trend lower for a third straight day and well below recent resistance levels at 13.
- T2108 rose 8.4% on Friday (% of stocks trading above their 40-day moving average) but is sporting a strong divergence from the indices as it is well below recent highs.
- Price action on all the indices continue to look strong with the Nasdaq (COMPQ) by far the strongest. Weakness in United States Oil Fund (USO) continues to be a concern for this market going forward. Though there has been a bounce in recent days.
- 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:
- Sold GLD on Friday at $128.01 for a 0.7% profit.
- Added 1 new swing-trades to the portfolio yesterday.
- May add 1-2 new swing-trades to the portfolio today.
- Will consider hedging the portfolio as well with a short position.
- Currently 50% Long / 50% Cash
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
