Today’s Trading Plan: Back on the Range

Technical Outlook:

• SPX pulled back yesterday hard and into the price range that has plagued the market for all of 2016 so far – between 1810 and 1950. 
• With it, the price action closed just slightly below the rising trend line off of the 2/11 lows on the 30 minute chart. Some may even consider it a close right on the trend-line. 
• With the price action yesterday, the 5-day and 50-day moving average was broken. 
• Overnight price action in the futures has SPX looking at a significant gap up this morning if the strength holds.  
• Price gains over the last two gains have been lost as afternoon trading wore on. 
• Volume was slightly less yesterday than the day prior and below recent averages. 
• Over the past 10 years the first day of the trading month has been notoriously bullish, but in recent months it has been a mixed bag, with the last two months resulting in closes lower. 
• February marked the third month in a row SPX has finished lower on a monthly basis. This hasn’t happened since the summer sell-off of 2011. 
• VIX bounced 3.8% yesterday to close at 20.55 and showing signs of wanting to bounce higher. 
• T2108 (% of stocks trading above their 40-day moving average) rose 2.5% to 60.7% – this despite the fact that SPX continued to trade lower through out the afternoon. This indicator, bettern than anything else, shows the overbought nature of this market currently. 
• For the bulls, a close above the Friday’s highs is necessary. 

My Trades:

• Added one new short position to the portfolio yesterday. 
• Did not close out any positions yesterday. 
• Currently 10% Short, 90% Cash
• Will look to add 1-2 new positions and follow the market’s direction 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: