Technical Analysis:

  • Bounce back yesterday in the S&P 500 (SPX) following the Fed sell-off. Still a downtrend in place from the FOMC highs. 
  • Either there is a short-term bull flag forming on SPX just under the all-time highs that were established this week, or we are going to test the rising trend-line off of the November lows. 
  • The trend-line is steep and unsustainable but it still remains to be breached. 
  • Volume on SPDRs S&P 500 (SPY) decreased from the day prior but still remains elevated and above recent averages. 
  • Lower-highs and lower-lows on SPX over the last two trading sessions on the 30 minute chart. 
  • CBOE Market Volatility Index (VIX) pulled back yesterday, but still off of its lows. The bounce in the VIX hasn’t been overly strong, and not worth reading too much into at this point. 
  • Light Sweet Crude Oil Futures (/CL) looking to bounce back following yesterday’s recovery off of the lows of the day. 
  • SPX and the market as a whole is overbought on every time frame – and the potential for a pullback here looms large. 
  • This time of year, people start anticipating a “Santa Rally” from the market but if you recall last year, that rally never came, in fact, the entire rally was marked by a great deal of selling.  

My Trades:

  • I did not close any of my positions yesterday. 
  • I did not add any new positions to the portfolio yesterday. 
  • I will look to add 1-2 new swing-trades to the portfolio today. 
  • I am currently 10% Long / 20% Short / 70% Cash

Chart for SPX:

SP 500 Market Analysis 12 16 16

 

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