Today’s Trading Plan: Bears Missing Another Opportunity

Technical Outlook:

• The market was boring to tears yesterday until the final 1.5 hours, which has now become the traditional “ramp the market higher for no reason” time. This time there was some moderation – only 6 points higher on S&P 500 (SPX) but still quite a bit when you consider the day’s range (and half of that move came in the last 15 minutes of trading). 
• Volume was extremely light on SPDRs S&P 500 ETF (SPY) yesterday – barely over half of the volume from the day before. And from what I can tell, the lowest volume day of the year for SPY. 
• CBOE Volatility Index (VIX) gave back over half of its gains from the day prior, dropping 3.8% to 12.86 and head faking the VIX bulls into thinking it would have a breakout. 
• SPX 30 minute chart managed to hold key support at 2155 yesterday and climb back above resistance at 2159. Very possible here we stay range bound or break out to new all-time highs again. 
• 20-day moving average continues to hold, which also acts as the threshold between the daily upper and lower bands. 
• The market, through the recent sideways trading, has managed to work off a great deal of the overbought nature of this market where it is not longer that. 
• I could easily see where the market tries to march higher here. The window is quickly shutting on the bears to drive this market lower in the short-term and their best chance to do it would have been yesterday. Follow through to the upside on yesterday’s price action could easily allow that to happen. 
• That said, if the bears are going to re-ignite the interest of short sellers, they need a close below the 20-day moving average and preferably below Tuesday’s lows. 
• United States Oil Fund (USO) saw a bounce yesterday that resulted in a sizable gain for the ETF of almost 4%. This needs to continue today or the bears will be quick to pounce on the short-term strength. 
• Dow Jones Industrial Average (DJIA) ended its seven day losing streak yesterday with a positive finish. 
• Overall, August is the worst performing month for the Dow and S&P 500. 
• After this week, most of the major earnings reports will be out of the way. 
• At this point, and with the election ahead, I’d expect the market to keep rallying higher. I don’t expect there to be a rate hike between now and the election. To do so would impact the market and thereby the election. I don’t think the Fed wants that, particularly since Trump has indicated that he would replace Yellen. 

My Trades:

• Did not sell any of my swing-tradfes yesterday. 
• Did not add any new swing-trades to the portfolio yesterday. 
• Did not add any additional long positions yesterday. 
• May add 1-2 new swing-trades to the portfolio today. 
• Will consider hedging the portfolio as well with a short position. 
• Currently 20% Long / 80% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: