Today’s Trading Plan: Bulls Need To Get Past Lunch

Technical Outlook:

• SPX gave back much of its gains from the day yesterday providing a weak showing against what could have been a very strong day for the market. 
• This is starting to become a regular phenomenon where the market is off to a nice start, the bears come in during the east coast lunch hour, and drive the market downward for the remainder of the day. 
• SPY volume was stronger yesterday than the day prior but still well below average readings. 
• VIX dropped below the 12 level but once again, the support level where all the reversals have taken place at for the past year, held firm and resulted in a bounce off of those levels. 
• T2108 (% of stocks trading above their 40-day moving average) remains at 36% – a very weak reading considering the market is only 1.5% away from its all-time highs. 
• Huge convergence of moving averages right at current price level – this has has had a mildly bullish effect on the market the previous occurrences. 
• SPX still has an inverse head and shoulders pattern on the 30 min and daily chart. However, it is starting to struggle the completion of the right shoulder. 
• The key for the bears will be to break the 7/27 lows. 
• Solid support for SPX at the rising 200-day moving average. 
• With a higher-low off of the 200-day moving average and possibly a lower-high formed on Friday, you essentially have the making of a range inside of a range. 
• Nasdaq is by far the best chart among the indices right now. Others are very much range bound, but the Nasdaq has established a higher-high and higher-low. If Apple (AAPL) can actually join this rally, which is a large % of the Nasdaq, the rally could really take off. 
• My biggest ongoing concern with the market right now is the inability to establish new, clear-cut all-time highs that leads to an expansion of price as well. Instead SPX gets bogged down in the 2120-2130’s range and reverses course each time. 

My Trades:

• Sold NFLX yesterday at 124.92 for a 16.1% gain. 
• Did not add any new positions to the portfolio yesterday. 
• 30% Long / 70% cash. 
• Remain long: QLD at 77.84, FB at 94.71, MSFT at 47.48.
• Will look to add 1-2 new positions today if the market can find its footing again. Otherwise, I will manage my current positions and consider some short opportunities. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: