Technical Outlook:

  • Yesterday marked a light volume pullback just below the double bottom confirmation level on SPX. 
  • Volume on SPY yesterday was incredibly weak, lower than the day before and much well below the current average. 
  • Futures are looking at a gap up this morning and potentially pushing through the heavy resistance at 1997 today. 
  • Yesterday’s mild sell-off wasn’t of any great concern, not at this point at least. After five huge days in the market, some consolidation here should not come as a surprise. 
  • Also at the 1997 resistance level is the 50-day moving average. 
  • If this resistance level breaks, I don’t see another heavy resistance level being reached until it gets into the 2040’s. 
  • The VIX wasn’t impressed with the sell-off yesterday, dropping 0.8% down to 19.39.
  • T2108 (% of stocks trading above their 40-day moving average) continues to impress, rising another 5% to 47%. 
  • Nice consolidation/bull-flag on the 30 minute chart of SPX over the past two days. 
  • After trading lower for two straight quarters (a rarity that hasn’t been seen since 2011), I wouldn’t be surprised to see the Q4 turn out to be very bullish for the market. 
  • The Fed has never raised interest rates at a point where the market was trading lower on the year. 
  • The large gaps in the market, the record number of stock buybacks, and ETFs that are constantly accumulating/dumping large chunks of stocks, and most importantly the high frequency trading, shows just how illiquid this market has become in recent years. These entities are the most responsible for the massive market swings that stocks incur each day. 


My Trades:

  • Added one new position to the portfolio yesterday. 
  • Did not sell any existing positions yesterday. 
  • Added two new swing-trades yesterday. 
  • 50% Long / 50% Cash
  • Remain long: EL at $80.52, MSFT at $45.13, AMZN at $543.24, SBUX at $58.67
  • Will continue to play this market long while the market bounce persists. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 10-7-15