Today’s Trading Plan: Ready for a Move

Technical Outlook:

• SPX returns to normal trading after a low volume week. 
• Over the last six trading sessions, SPX has coiled nicely. I expect at some point for there to be a break to the upside to challenge the rally highs and ultimately SPX’s all-time highs. 
• On SPY, of the past six trading sessions, five of them have resulted in doji price action. 
• The 5-day moving average continues to be held on a closing-price basis and offering short-term support.
•  The rising trend-line off of the September lows should be a strong support level for the market should this market breakdown. Its current support level rests at 2058. 
• Declining resistance off of the May highs on SPX still rests at 2116. 
• SPY is essentially sitting in the middle of the range that has plagued the market all year long, outside of the August/September sell-off. 
• SPX 30 minute chart shows a great deal of coiling taking place. 
• VIX continues to drop by falling another 0.5% down to 15.12. 
• Ultimately, I don’t see this market seeing any heavy selling until it gets into the 11-12 range on VIX. 
• A massive inverse head and shoulders pattern is forming on SPX that is worth following. A move above 2116 area would confirm the pattern. 
• Terrorist plots and events continues to cause the algos to sell the market on any mention, so that remains a significant, and completely unpredictable market risk that looms large. 
• Establishing a convincing higher-high on the current rally is of high importance here, otherwise bulls risk getting trapped in consolidation for the foreseeable future. 
• For twelve years straight, the market over the course of the last 30 trading days of the calendar year, has yielded a net positive gain, and thus reinforcing the concept of the “Santa Rally”.
• A rate hike is expected out of December’s Fed meeting. However, I still would not be surprised if the Fed backed out of raising rates yet again. They’ve been doing just that for years now. 

My Trades:

• Sold INFN on 11/25 at $22.22 for a 5.9% gain. 
• Sold BIDU on 11/25 at $201.47 for a 1.1% gain. 
• Did not add any additional trades to the portfolio on Friday.   
• Will consider adding one to two new long position to the portfolio today, while also managing the profits on existing positions. 
• 60% Long / 40% Cash
• Remain long: MSFT at $53.88, FB at $104.85, TSO at $113.98, A at $39.66, and two additional trades.
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: