Technical Outlook:
- SPX managed to rally above the 2111 resistance but was unable to close above said level into the close, which as you know, is what is most important.
- An intraday move above resistance holds very little meaning if SPX can’t hold it into the close and that is what we got yesterday.
- SPY volume was weak yesterday and below recent averages.
- 5-day moving average continues to hold support for SPX in 10 out of the last 11 trading sessions.
- A break above 2111 and then 2116 would set up SPX for a test of all-time highs established in May 2015.
- The massive inverse head and shoulders pattern on the daily chart of SPX confirms at 2111. Not your typical inverse head and shoulders pattern, and since it literally encompasses the entire price range that it traded in, and confirms at new rally highs, it is something worth mentioning, but the failure rate on this pattern, considering the circumstances, should be much higher than normal.
- VIX trading in the lower 13’s. It continues to cause problems for the market that does not allow for the S&P 500 to make its way back to the all-time highs and beyond. Instead, the lower 13’s is where the beginning of sell-offs keep taking place at.
- T2108 (% of stocks trading above their 40-day moving average) is now at 71% but well below the 87% back in March at the same price level. This should be considered a bearish divergence.
- A strong move above 2116 would take the S&P 500 above the right shoulder of the two year long head and shoulders pattern, and technically nullifying the pattern.
- There are scenarios at play here that can change the market for the better, and they are just a short distance away.
- At some point this month, the brexit vote will become a concern for the market. So far, the market is ignoring its implications.
- For the bears, the objective is simply to sustain a hard sell-off and to not give back those losses by the close.
- The short-term head and shoulders pattern that we had been following last month has been nullified, but in the same time frame going back to April, you could make the case that a possible double top is forming if price begins to accelerate to the downside.
- I believe, at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run – the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important.
My Trades:
- Sold WYNN at $98.77 yesterday for a 1.4% profit.
- Did not sell any additional positions.
- Did not add anyy new positions to the portfolio.
- Currently 20% Long / 80% Cash
- Remain long: ADBE at $99.78, UPRO at $66.50.
- Will look to possibly add 1-2 new positions today if the market can continue pushing higher.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
