Today’s Trading Plan: A Choppy Week

Technical Outlook:

• SPX had a heavy sell-off yesterday and took price action below the 20-day moving average (just barely) at the close for the first time since the market rally started on February twelfth. 
• SPY this morning is looking at a significant gap up to reverse yesterday’s losses, adding to the narrative of an extremely choppy week. 
• Also, in addition to the 20-day moving average, the market also lost the 5-day and 10-day moving averages. 
• Volume saw a respectable increase on SPY and trading at recent averages. 
• VIX popped nearly 15% yesterday and climbed above 16. The highest closing for the VIX since March 15th.
• VIX price action is starting to suggest that it may want to come out of the recent base formed. 
• T2108 (% of stocks trading above their 40-day moving average) is starting to roll over as it dropped 10% yesterday to close at 71.76.The biggest drop since February 11th.
• Head and shoulders pattern mentioned yesterday in the trading plan on the 30-minute chart confirmed and is attempting to play out to the downside. The strength of today’s bounce will determine whether it can be sustained.  
• Volume has notably increased to start April, compared to March, with 3 out of the first 5 trading sessions resulting in moves of over 1%. 
• 2100 on the S&P 500 remains the key price level to watch – its the declining trend-line off of the July highs. 
• Volume was at similar levels to what we saw the day prior but still below recent averages. 
• Two key price levels to watch today – 1) The Friday lows from last week. 2) The lows from March 24th. Particularly, if the latter should break, it would put in a lower-low into the downtrend. 
• Between 2040 and the all-time highs the price action is very congested with plenty of resistance. 
• The market has hardly seen any correction over the last seven weeks – with only one of the weeks resulting in a lower close from the opening price. 
• April has been bullish in nine of the last ten years. 
• Yellen’s dovish outlook as it pertains to rate hikes has been, in large part, the reason for the massive rally off of the February lows. 

My Trades:

• Added one new swing-trade yesterday. 
• Did not close out any swinng-trades yesterday. 
• Currently 10% Long / 10% Short / 80% Cash
• Remain long TLT at $129.52
• Will look to add short or long exposure here today depending on the direction the market decides to take. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: