Today’s Trading Plan: Buyers Exhaustion

Technical Outlook:

• Another melt up into the close while lagging throughout the morning. 
• This has been the trend over the past two days, where the market is unable to garner any traction throughout the trading sessions until the afternoon when the buyers come in during the afternoon and drive the market higher. 
• Yesterday’s volume was extremely light – the lightest of the year and worst since 12/30/15. 
• 30 minute chart of SPX continues to exhibit how overly stretched this market is at the moment. Since Tuesday it has managed to rally 62 points without any break whatsoever. 
• Rising trend-line off of the 2/11 lows has rising support today at 1962. This level must hold for the rally to continue on its current trajectory. 
• SPX entered the area of some significant price resistance in the 1990’s. Lots of price congestion above this level all the way through all-time highs. It will be a difficult road for price to break through especially when it is already stretched a great deal. 
• VIX continues to melt with another -2.3% to the downside to settle at 16.70. 
• Today there is the Employment Report that will undoubtedly shape the direction of the market and could cause some problems in terms of a sell-off for the market today if there is the slightest bit of disappointment in the report. 
• 81% of stocks are trading above their 40-day moving average – the highest reading since 2013. 
• If there is a significant rally today, a challenge of the 200-day moving average at 2023 would be significant. 
• While the rally has been a nice one off of the February lows, you have to keep one eye open for a potential reversal considering the resistance that is overhead and where we have already been so far this year. 
• On the flip side, even though it flies in the face of what has taken place to-date, you can’t rule out the possibility that the lows for the year could already be established (thought I don’t share that view point). 
• S&P 500 is trying to close out its third consecutive week of gains – the likes of which hasn’t been seen since late November/early December. 
• USO continues to struggle with a break of the 50-day moving average. Another test of it again today should be expected. 
• February marked the third month in a row SPX has finished lower on a monthly basis. This hasn’t happened since the summer sell-off of 2011. 

My Trades:

• Added two new long positions to the portfolio yesterday. 
• Closed out GOOGL at 731.33 for an 0.7% loss. The one stock in the portfolio that was struggling and lagging market price action.
• Currently 30% long / 70% Cash
• Will look to add 1-2 new positions and follow the market’s direction 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: