Today’s Trading Plan: Bears Will Need To Step Up Their Game

Technical Outlook:

• SPX saw its first decline in a week, pulling back 0.5%. 
• The pullback was extremely weak in terms of momentum and willingness to want to move lower, which made me skeptical about whether there was a true desire by the market to make a much larger pullback. 
• The negative breadth in the market was not at all strong, being about even with advancers on NYSE. 
• Also, worth noting was the fact that the VIX continued to decay yesterday dropping another 3%, for a fourth consecutive day, despite the market falling as well. 
• Volume was even less yesterday on the pullback than the three weak volume days I had mentioned from the previous days. 
• On three separate occasions yesterday SPX tested the 1915 level but failed to break that level. If it breaks that day, it has the potential to retrace much of Wednesday’s move before finding any support. 
• Besides the move that took place in the first 30 minutes of trading on Wednesday, SPX has essentially been stuck in a consolidation pattern. 
• In the short-term, SPX is reaching overbought levels. 
• A break of Wednesday’s highs, or 1930, would provide reason to get add exposure to the long side. 
• Hardly a pullback on T2108 (% of stocks trading above the 40-day moving average) pulling back only 0.2% to 39.85. 
• Oil has a strong downward trend-line off of the November highs and was rejected right at those levels. 
• One of my big concerns toward this market is the fact that bottom was formed on a suspect headline and that kept the market from ever really seeing a true flush or panic moment for the market. 
• Insane price movements every day being created by computer generated trading (HFT’s) in a highly volatile market marked with enormous headline risk. 

My Trades:

• Sold SDS yesterday at $22.10 for a 0.8% profit.
  
• Did not add any new po sitions yesterday. 
• Currently 100% Cash
• Will look to trade whatever direction the market takes me today. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: