Technical Outlook:
- Overnight price action has resulted in what should be a strong gap down this morning.
- With Greece holding a referendum and no agreement being reached, the impact has been felt across world markets.
- SPX Futures (ES) gapped down initially 40 points, but has since recovered about half of those losses.
- 21 out of 30 candles since futures opened last night for ES have been green candles on the 30 minute chart which indicates the bull’s willingness to buy the dip up to this point.
- The rising trend-line off of the March lows is likely to be broken today at the market open at 2090.
- Also at stake is the head and shoulders neckline at the 2071-2 level. If confirmed, this marks a massive bearish pattern should lead to a much larger move downward.
- Another test for the market that could happen in the days ahead is a test of the 200-day moving average.
- With that said, time and time again the bears have seen opportunities such as the one they have today slip from their hands and watch the bulls quickly rally the market off of the lows.
- The key for the bulls will be to quickly get price back above Friday’s highs. A strong rally erasing today’s losses or most of them, would likely cause additional problems for the bears.
- VIX will face resistance today at 15.41. It remained unchanged on Friday.
- SPY volume was slightly above average on Friday.
- T2108 currently resides at 42.5% (% of stocks trading above the 40-day moving average). A move to the lower 30’s will be necessary to support the bearish thesis.
- The 30 minute chart shows a steady downtrend in in place here.
- Greece still remains atop of the market and what kind of deal, if any will be struck and that is the main source of risk facing this market.
- 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:
- Added one short position on Friday.
- Did not close out any positions on Friday.
- 30% short / 70% cash.
- Remain long SDS at 19.97 (2x UltraShort on SPX),
- Remain short CA at 30.40
- Will look to add 1-2 new positions today to the portfolio.
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
