Today’s Trading Plan: Bullishness Amid A Crumbling World

Technical Outlook:

• SPX rallied for the 10th time in the last 12 trading sessions. A rally that is as good as any we have seen over the past few years, except this rally established new all-time highs, and still hasn’t stopped yet. 
• Terrorism struck again, this time in Nice, France. Absolutely, and utterly disgusting, the waste of human life at the hands of people that are no different than Adolf Hitler.
• Nonetheless, the market seems unconcerned by the attacks, rallying higher this morning, despite the world breaking at the seams.  
• The current trend-line of the market is unsustainable. It is in need of putting in place a higher-low that flattens out the trend-line some. 
• SPY volume increased from the day prior but still slightly below recent averages. 
• Plenty of gaps on the SPY chart remains unfilled. 
• 5-day moving average is a good barometer of the strength of the current rally. As long as it stays above this moving average there is very little reason to get net short on this market. 
• VIX dropped below 13 yesterday which is a big positive for the market – needs to see additional downside follow through today. I wrote about the significance of this VIX Support level here. 
• SPX 30 minute chart – continues to trade hard to the upside with little to no pullback. 
• I could easily see a pullback to the 2120 level which was the breakout area for this market, in the coming weeks, without ruining the upside potential of the market going forward. 
• 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. 
• There is a great deal of bullishness to this market right now despite the prevalent amount of worry. It has been over two years since the market has actually seen a legitimate rally and so it wouldn’t be surprising to see this market continue its current trend higher as shorts are forced to face the new reality of the market. 
• Market is assuming that rate hikes are pretty much off the table for all of 2016. 

My Trades:

• Added one long position yesterday and one short positions. 
• The short position was added as a strategic hedge against a market that is getting stretched and overextended. 
• Did not close any swing-trades. 
• May add 1-2 new swing-trades to the portfolio today. 
• Currently 40% Long / 10% Short / 50% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: