Technical Outlook:
- S&P 500 (SPX) saw one of its bigger declines in the past month dropping a whole 6 points or -0.3%
- SPDRs S&P 500 ETF (SPY) volume saw a slight increase yesterday but still well below recent averages.
- SPX broke the 50-day moving average but tested the 10-day and held on. The most important one to keep an eye on right now is the 20-day moving average which also represents the middle of the trading bands.
- Also, in themiddle of the converging moving averages (10 and 20 day) you have a short-term price support level at 2175 which is where SPX broke out at last Friday. It held yesterday but will be tested again today.
- SPX 30 minute chart still very choppy and not showing a clear sense of direction.
- Market gains at the open, of late, has not been sustained. With some strength this morning, there is a good chance the strength gets faded at the open.
- CBOE Volatility Index (VIX) finding some support here at the lower 11’s. and trying to bounce. However 13 area will offer significant resistance. The key is where it closes.
- United States Oil Fund (USO) saw a significant sell-off yesterday that closed the gap from Monday and puts at risk the rally in equities if the sell off continues. Lots of resistance at the 20-day moving average. If oil dips back below $40/barrel, I’d expect for the weakness to be magnified in equities.
- Dow Jones Industrial Average (DJIA) is at risk of putting in a double top. Must break through the July highs to change that.
- 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 two new swing-trades to the portfolio yesterday.
- Closed FB yesterday at at $124.78 for a 0.7% profit.
- Closed INTC yesterday at $34.65 for a 1.2% loss.
- May add 1-2 new swing-trades to the portfolio today.
- Will consider hedging the portfolio as well with a short position.
- Currently 60% Long / 10% Short / 30% Cash
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
