Today’s Trading Plan: Coming To Resistance

Technical Outlook:

• Another respectable day for the market yesterday as the Russell continues to play catch up with the broader market rally. 
• Steep decline off of the September lows, continues to hold. Though at some point in the near future, I expect this trend line, at the very least, to flatten out some and decrease in the acceleration of price (slope of the trend). 
• 2119 should offer some resistance for the market as it marks declining resistance off of the May highs (see chart below). 
• VIX actually finished higher yesterday by 2.8% to close at 14.54. 
• I still maintain, that it will be difficult to see any sizable pullback in SPX until VIX gets back down into the 11-12 area – this has been the area, where historically, the indicator has bounced hard off of. 
• Volume was noticeably higher on SPY yesterday but still well below average. The 50-day day moving average for SPY volume is starting to take a strong move lower as well.
• Janet Yellen speaks at 10am eastern today, which could inject some volatility in the market today.
• The five day moving average continues to hold strong over the last eight days, testing it on five of those days. 
• While it would make sense to see the market pullback here, it doesn’t have to, and don’t think that you can force the market to do so either. Loading up on short positions is trying to stand in front of a locomotive, and expecting it to stop in time. 
• SPX has been overbought for almost a month now, which goes on to justify that the market can remain overbought longer than you can remain solvent. 
• SPX 30 minute chart continues to show a strong uptrend with higher-highs and higher-lows still remaining in place. 
• T2108 (% of stocks trading above the 40-day moving average) is currently at 69% a move above this level today would break it out of its current range. 
• Look for the 200-day moving average to offer a strong level of support going forward. 
• Some pundits think that the Fed has opened the door to a rate hike in December. I’m not buying it. 
• Seasonally this is the strongest time for the stock market so a major rally like what we are seeing, is no big surprise and not at all uncommon. 
• Ultimately, price on SPX is entering a range that has notoriously been difficult trading for most and one that vacillates consistently within a narrow range. 

My Trades:

• Added one new swing-trade to the portfolio yesterday (long)
• Covered BBY at $35.52 for a 2.9% loss. 
• 50% Long / 50% Cash
• Remain long: AAPL at $117.50, AAL at $46.02, CRM at $79.25, FDX at $157.91
• Will look to add 1-2 new swing-trades to the portfolio today.
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: