Today’s Trading Plan: A Chance to Expand

Technical Outlook:

• SPX managed to avoid the reversal on Friday by closing above 2120 – they key breakout level for this market. 
• Volume on SPY was rather weak on Friday, but considering price action’s tight range, it is no surprise. 
• Resistance overhead doesn’t come about until the 2160-70’s price range for SPX. 
• It is critical for the market going forward to hold onto the 2120 level of SPX to maintain trading confidence to the long side. Bears however, lack any true trading advantage until they can take SPX back below 2067. 
• VIX dropped another 2.8% on Friday and confirming the break of long-term, rising support off of the July 2014 lows. 
• T2108 (% of stocks trading above their 40-day moving average) remains range bound at 53%. 
• Russell, of all the indices, shows significant and a bearish tilt that should be noted. 
• 30 minute chart of SPX shows an inverse head and shoulders pattern confirming. 
• The idea here with SPX moving above 2120 is for it to hold this support level in the coming days and finally put an end to the non-directional movement of the market from the past five months. 
• A look at the SPY weekly chart shows in no uncertain terms the degree of choppiness in the market dating back to February. 
• 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 new long position on Friday. 
• Did not close out any positions on Friday. 
• 20% long / 80% cash. 
• I’ll consider adding 1-2 new long positions to the portfolio today as long as SPX stays above 2120. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: