Technical Outlook:
- Solid day of selling that saw the market deteriorating much faster under the surface among stocks than what the indices actually were suggesting.
- The Advancing/Declining issues reading showed a very bearish market to the tune of 4:1 in favor of the the declining issues.
- VIX was much stronger in the early going but gave up most of those gains by the end of the day and finishing 7% higher overall.
- T2108 (% of stocks trading above the 40-day moving average) finished 16% lower – another heavy sell-off and putting this indicator back at last Thursday’s lows.
- With today’s early morning weakness, the traditionally strong seasonal factors associated with December is being put to question. However, in recent years, SPX has seen some selling across the board before ultimately rallying higher before the end of month.
- Rising trend-line as seen in the chart below, off of the October dip on 10/14, represents a key support level that must hold if the selling continues to accelerate to the downside. Current support is at 2041.
- 50-day moving average at 2044 is in play today, which provided some support of late.
- 30 minute chart of SPX is providing little to any price pattern that could be considered.
- Inverse head and shoulders pattern is still in play here, as confirmation is at 2115. Secure that price level, and this market takes on a whole new meaning for the bulls.
- If the 11/16 lows are lost at 2019, you have a confirmed double top pattern that is now in play on SPX and the market turns decidedly bearish as a result.
- 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.
- 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”.
My Trades:
- Sold UPRO yesterday at $66.20 for a 4.2% gain.
- Will consider adding one to two new long positions to the portfolio today if the market can recover off of the early morning weakness and stage a rally off of the current lows.
- 60% Long / 40% Cash
- Remain long: AMZN at $673.85, ADSK at $63.63, CRM at $79.86, and three other positions.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
