Technical Outlook:
- Another major rally yesterday following the eight day pullback, gives SPX 64 points in gains in the last three days.
- SPX has managed to reclaim the 200-day moving average that posed as resistance on Tuesday. Also, it reclaimed the 10 and 20-day moving averages, the latter of which puts SPX in the upper half of the Bollinger Band now.
- SPX is poised to test the November highs again at 2116, which also represents the declining resistance off of the May highs.
- Short-term trend line off of the November highs was broken yesterday.
- VIX had a steep sell-off yesterday, dropping 10.6% down to 16.85, but still above the flat 200-day moving average.
- T2108 (% of stocks trading above their 40-day moving average) rallied 16% yesterday to close at 50%. This one indicator shows just how lagging equities are with the major indices.
- Following the eight day sell-off that ended on Friday, SPX could very sell be setting up for a notable rally that takes price beyond the current all-time highs. It is the season for such a rally.
- For twelve years straight, the market over the course of the last 30 trading days has yielded a net positive gain, and reinforcing the concept of the “Santa Rally”.
- Volume in SPY increased a slight bit yesterday and for the second straight day. Volume still remains above average, albeit, barely.
- Getting past the declining resistance off of the May highs will be absolutely key to the sustainability of this of this market.
- 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 GLW yesterday at $18.80 for a 3.8% profit.
- Added three new long positions to the portfolio yesterday.
- Will look to add 1-2 new long positions today if this market bounce holds.
- 70% Long / 30% Cash
- Remain long: FDX at $157.91, MSFT at $53.88, GLW at 18.11, FB at $104.85, TSO at $113.98, and three additional trades.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
