Technical Outlook:
- Yesterday marked a hard sell-off in the early going as the bulls were dumping their stocks as fast as they could, but then, after the first 30 minutes of trading, a base was established, and the market bounced throughout the remainder of the day.
- SPX took a 21 point sell-off early on and turned it into a 6 point rally by the end of day.
- That was the hard bounce I was looking for. Once established, if they are truly a dead cat bounce, then they likely won’t last beyond 2-3 days.
- SPX managed to climb back above the 50-day moving average, but fell just short of breaking the 5-day moving average.
- I expect 2085 to offer some resistance today as it was also the place where Wednesday’s rally reversed at. There is some heavy short-term resistance at that level.
- The objective for the bulls today should be to quickly push price back over 2100 again.
- For the bears the goal should be to reverse as much of the from yesterday as possible and keep price from breaking above 2085.
- SPY volume smashed the volume readings of anything we have seen this week and the highest seen since March 10th.
- VIX should be very concerning for traders as it put together a major reversal candle after establishing new rally highs yesterday. You could very easily see VIX rapidly decline from here.
- VIX ultimatley dropped 3.8% down to 19.37 yesterday.
- I believe, at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run – the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important.
My Trades:
- Added one new swing trade long yesterday.
- Did not close out any positions yesterday.
- Remain long UPRO from 63.29
- Will look to add another long position if the market continues to climb higher, or short the market if today ends the dead cat bounce.
- Currently 10% Long / 90% Cash
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
