Today’s Trading Plan: Another Day Another Huge Gap

Technical Outlook:

• Markets are looking to bounce hard – this time up. The day-to-day consistencies of this market is making it a near impossibility for traders holding for extended periods.  
• A sell-off of 469 points yesterday, sees a 230 point gap up today, and really on no news of any real meaning. 
• This is why you have to stay nimble in this market. The bounces are insane, 90% of the move happens overnight, and you simply can’t predict, with any real certainty, the direction that it is going to take. 
• SPY volume yesterday saw a noticeable increase, well above average readings. 
• S&P futures, is sporting a well-defined inverse head and shoulders pattern that must be respected going into today. 
• Ultimately, I think that SPX, at the very least is going to test last week’s lows, however depending on today’s rally and whether it holds, could play a large role in determining whether this comes to fruition or not. 
• Chinese markets are on a holiday for the remainder of the week. 
• VIX rallied yesterday only 10.5% but back above 30, to 31.40. 
• Massive drop in T2108 yesterday (stocks trading above their 40-day moving average) losing 38% all the way down to 11.9%. 
• Trade nimble, be careful about holding positions overnight, because the volatility is still at extreme levels and much of the daily moves are happening before the market ever opens. 

My Trades:

• Added one new short position yesterday. 
• Did not close out any positions yesterday. 
• 20% Short / 80% Cash
• I am using a ultrashort ETF for my position. 
• Long SDS from $22.26 (2x Ultra Short position).
• Current rally has run out of steam and now I will look for opportunities to add 1-2 new short positions to the portfolio. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: