Technical Outlook:
- Yesterday picked right back up where the previous week ended, with additional selling pressures on the market.
- The lack of volume to the down side compared to what I saw the previous two trading sessions, suggests that the market sell-off was more about the lack of buyers than an overwhelming force of sellers panicking and getting out of positions.
- Also worth noting is the fact that SPX closed below the lower Bollinger Band yesterday which is something that hasn’t been achieved since 3/11/15. The previous four times, SPX bounced back above the lower band on the same day.
- Significant day for the VIX yesterday as it marked the first time that it was able to close above the declining resistance level from back in October of last year.
- SPX 30 minute chart has seen a 40 point decline without even a slight bounce.
- I do think that the possibility of a bounce today is very realistic. Though I would say that more likely than not, it will be a dead cat bounce.
- T2108 (% of stocks trading above the 40-day moving average continued its plunge yesterday dropping another 8.5% down to 33.6%. The lowest that it has seen since 12/16/14.
- SPX managed to break through key support yesterday in the 2082-5 area.
- All eyes on 2067 today. If it breaks it would represent a new lower-low for SPX.
- To give you an idea of how difficult this market is for traders this year, despite a plethora of new record highs on the year, SPX is only up 1.0% on the year.
- The market doesn’t care about the economy nor earnings. That is not what is driving it. The market only cares about what the Fed is doing to keep equities propped up.
My Trades:
- Covered my short in WBA yesterday at 83.39 for a 2.1% gain.
- Covered my short in BBY yesterday at 34.35 for a 0.1% gain.
- Added one additional short position yesterday.
- 10% short / 90% cash.
- I’ll consider adding 1-2 new short position to the portfolio today. May consider playing to the long side if we get a heavy bounce today.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
