Technical Outlook:

  • Yes, for an 8th straight day, the S&P 500 (SPX) sold off. The expectation of a bounce is strong here, and quite surprising we haven’t even seen any significant attempts at it yet. 
  • Last time SPX was down 8 straight days was in 2008. The most troubling aspect of this decline is how light it has been. It wasn’t until the last three days that the sell-off picked up steam. The record is twelve straight down days. 
  • Today employment comes out at 8:30am eastern. If a bounce is to happen today, the employment report would be a good way to jump start the rally. 
  • The 200-day moving average may be tested today at 2082. Expect to find some support at this level. The last time it was tested was during the Brexit meltdown
  • Volume on SPDRs S&P 500 (SPY) fell the second day in a row with the reading coming in just slightly below average. This could be a sign that the rally is running out of steam. 
  • United States Oil Fund (USO) broke the rising trend-line off of the February lows, and looks to push lower today after the Saudis threaten to steeply raise output levels. 
  • CBOE Market Volatility Index (VIX) continues its steep rise, amassing over 14.3% yesterday to close the day at 22.08. These are levels that haven’t been seen since the Brexit fiasco. The trend-line off of the February highs is likely to be tested at some point. 
  • 30 minute chart of SPX shows a market that has sold off significantly and in need of a bounce – extremely oversold short-term conditions.
  • Bullish divergence yesterday in the T2108 (% of stocks trading above their 40-day moving average) as it managed to rise 5.7% yesterday. 
  • The election is four days from today, and there will be more and more moves like what we saw on Friday where major moves occur out of nowhere, and is completely unexpected. 

My Trades:

  • Closed AMAT yesterday at $28.24 for a 1.7% profit. 
  • Day-traded UPRO yesterday to no avail. 
  • Did not add any new overnight positions to the portfolio. 
  • Will look to add 1-2 new swing-trades to the portfolio today. 
  • Currently 10% Short / 90% Cash

Chart for SPX:

SP 500 Market Analysis 11 4 16sp

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