Today’s Trading Plan: Bounce Abounds

Technical Outlook:

• SPX failed to provide the necessary follow through Friday, giving up 7 points to the downside. 
• 50-day moving average remains an issue for stocks. 
• The market is looking at a massive gap higher this morning – the likes of which is rarely seen. SPX is looking to go from its 2071 closing price to somewhere around 2096. 
• These large gaps higher are a mess, because they ultimately need to get filled at some point. 
• As a result, the choppiness and unpredictable nature of the market between 2040 and 2138 continues with price just bouncing and dropping every which way. 
• Volume on SPY fell off some on Friday, but was still very strong and well above recent averages. 
• It is inconceivable how many bears go caught in shorting the market with the belief that the market would be rolling over today. It is likely much of this gap up is being fueled by short covering now that a brexit has very low odds of happening. 
• Expect VIX to see a large drop today from its current elevated levels. On Friday it was basically flat. 
• Price will likely be challenging 2100 again today, pushing through and holding this level should be at the center of the bull’s objectives for the day. 
• I believe, at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run – the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important. 

My Trades:

• Added one new swing trade position on Friday. 
• Closed UPRO on Friday at $64.65 for a 2.2% profit. 
• Will look to add 1-3 new swing positions today if the market can continue rallying. 
• Currently 10% Long / 90% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: