Technical Outlook:
- SPX resiliency was on full display yesterday, when the market bounced nearly 1% off following Tuesday’s heavy sell-off.
- This nearly negates the entire move that the bears made to start the week, and leaves price action right near SPX all-time highs again.
- It comes down to this: Bulls need to smash through the all-time highs to gain control, or Bears need to break below Tuesday’s lows. Those are the parameters to this market for now.
- The problem with the bulls making new all-time highs during the course of 2015 so far, is that once they are established, nothing else happens; there is no rally that sees a rapid expansion in price.
- Instead the all-time highs have been quickly sold off by the market in general.
- VIX dropped back down 5.6% to the VIX trend-line off of July lows which currently stands at 12.95.
- T2108 (% of stocks trading above the 40-day moving average) showed a hard bounce, rising 14.8% and half of Tuesday’s losses.
- Volume was below average yesterday and much less than what we saw on Tuesday’s sell-off.
- With that said, SPX has shown many times, that it doesn’t need strong volume levels to establish new highs.
- Oil showing signs of breaking down again and could weigh heavily on price action of the broader market as well.
- SPX 30 minute chart doesn’t reveal much to glean from as it just continues to be mired in choppiness of late.
- We still have a higher-high in place currently with SPX, and would need to break 2067 in order to form a new lower-low.
- 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:
- I did not add any new trades yesterday.
- I did not close out any trades yesterday.
- 10% short / 90% cash.
- Remain long: SDS at 19.90.
- I’ll consider adding 1-2 new depending on the direction and strength of the market.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
