Technical Analysis:

  • The Federal Reserve raised interest rates yesterday by a quarter point. Initially the S&P 500 (SPX) tried to rally on the news but quickly gave up its gains on the day to finish 0.8% down on the day. 
  • SPX also managed to close below its 5-day moving average for the first time since 12/2 which was when the second leg of the Trump rally started. 
  • Volume on SPDRs S&P 500 (SPY) increased for a third consecutive day and the largest volume reading since the two days after the election. 
  • The Rising trend-line off of the November lows on SPX looks to be tested at some point in the near future. Today, that area is at 2234. 
  • Dow Jones Industrial Average (DJIA) rallied as high as 19,966 yesterday, but ultimately couldn’t push through the 20,000 milestone and instead sold off. 
  • For the fifth time in the last six days, the CBOE Market Volatility Index (VIX) rallied, but only 3.7% – not much considering the price action in the indices and the sell-off that followed. Even with the rally that unfolded in VIX yesterday, it hasn’t moved all that much. 
  • Small caps with the Russell 2000 (RUT) are showing the greatest amount of weakness over the past four days, while large caps continue to be the go-to option for traders. 
  • Light Sweet Crude Oil Futures (/CL) looks to retreat for a third consecutive day and even move back below the $50 price level. As has been the case with oil lately, is for the market to only pay attention to it, when it is rallying. 
  • 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 Sold Starbucks (SBUX) at $58.72 yesterday for a 2.4% profit. 
  • I sold Emerson Electric (EMR) yesterday at 56.45 for a 0.8% loss. 
  • Added one additional swing-trade 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 15 16

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