Technical Outlook:

  • A non-eventful day yesterday as SPX traded slightly lower with incredibly light volume on SPY. 
  • Not quite a doji yesterday, but pretty close darn close, nonetheless, which keeps with the dojis of the previous four days. 
  • Essentially there has not been much price action one equities start trading. All of the price action is happening in the futures market and based on action overseas. 
  • VIX had another muted day, dropping 1.4% down to 22.14. 
  • SPX bears can ill afford to allow the bulls to buy this dip this morning. Instead it needs to insure a push towards the 1900-1911 area. 
  • The 30-minute chart of SPX looks very choppy still without any clear direction at this point. 
  • Follow the 5-day moving average of SPX for directional guidance. A break above the MA could mark a change in behavior in favor of the bulls. 
  • SPX has alternated up/down/up/down for 11 straight weeks, which ties an all time record for most consecutive reversal weeks. Right not that streak is poised to end but that could easily change. 
  • With the break of the bearish flag that has been forming there are two price targets: 1) The 1904-1911 range, followed by a retest of the 1867 lows of August. 
  • Seasonally speaking, this week and the two weeks that follow are considered the weakest trading periods of the year. 
  • For swing-traders the gains/losses are made overnight night and you have to be willing to hold overnight in order to profit. 
  • I don’t expect the Fed at any point this year to raise rates now. Not next month, and very unlikely in the middle of the Christmas season. 
  • Furthermore 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:

Chart for SPX:

SP 500 Market Analysis 9-24-15