Today’s Trading Plan: Brace Yourselves – Heading Back To Consolidation

Technical Outlook:

• Yesterday marked the second biggest sell-off on the S&P 500 (SPX) since the Brexit sell-off, shedding 12 points. 
• Volume on SPDRs S&P 500 (SPY) was slightly higher than the prior day’s volume but still extremely weak and well below recent averages. 
• Second straight day where dip buyers have not come in and rallied the market into the close. 
• SPX dropped below the 5 and 10-day moving averages. Not a major concern as the 20-day moving average is what I would be paying more attention to here. 
• SPY 30 minute chart is exhibiting a bearish island reversal pattern over the last three trading sessions. 
• Key support today will be 2171 followed by 2155. Even a break of the former should require traders to reduce their expectations for the market going forward. 
• CBOE Volatility Index (VIX) spiked yesterday 7% and closed above the 20-day moving average which has not be the easiest of tasks lately. Pushing above long-term resistance at around the 13 area will be key for it today. 
• The Dow has alternated up/down/up/down for 8 straight days. A positive finish today would take it to #9. 
• Notable disconnect between oil and the markets yesterday, as the former continued to rally higher and reclaim the 50-day moving average for United States Oil Fund (USO).
• SPX has not seen a +/- 1% move in either direction since July 8, 2016. Since then the market has moved higher but in very small increments and tight daily ranges. 
• Dow Jones Industrial Average (DJIA) is keeping the double top pattern in play here. 
• The bulk of the earnings season is behind us. No significant disasters from the big names that reported that negatively impacted the market as a whole. 
• Overall, August is the worst performing month for the Dow and S&P 500. 
• 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:

• Sold ADSK at $62.74 from $60.20 yesterday for a 4.2% profit. 
• Sold IBB yesterday at $292.29 from 295.02 for a -0.9% loss.
• Added two new long positions yesterday. 
• Added one new short position yesterday. 
• May add 1-2 new swing-trades to the portfolio today. 
• Will consider adding additional short positions to the portfolio as the market warrants it.
• Currently 50% Long / 10% Short / 40% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: