Today’s Trading Plan: Crude Finding Traction

Technical Outlook:

• SPX faced a strong sell-off in the early going yesterday, but the dip buyers stepped in strong and rallied the market by recovering 75% of its losses on the day. 
• Oil showing strength in the pre-market – a break of last week’s highs would create a short-term inverse head and shoulders confirmation. 
• Strong pre-market action puts 2076, the December highs, as a possible target for the day. In breaking 2076, the SPX would establish its first set of higher-highs since early November and break the current short-term down-trend. 
• Volume, for a full day of trading, was virtually non-existent, which is common for this time of the year, and much lower than the volume readings we had last week. I expect more of the same as the week progresses. 
• VIX lost about half of its gains from yesterday when following the market rally off of the lows of the day. 
• SPX 30 minute chart, with pre-market strength should be able to from a higher-high. 
• Key this week, with low volume trading, is whether it can continue on with the gains from last week. Historically, this week and last is the best two-week trading set of the year, and is where your infamous “Santa Rally” kicks off. 
• On SPY the absolute key level for it rests at $200. A break below this level would send SPY firmly into bear territory. 
• The rally from last week did little to alleviate oversold market conditions. 
• There is a rising trend-line off of the September lows on SPX that has been tested twice in the past three weeks and held up perfectly. 
• A lot of talk about the “Golden Cross” taking place on SPX with the 50-day moving average crossing above the 200-day moving average. I don’t put much weight behind this phenomenon. 
• For twelve years straight, the market over the course of the last 30 trading days of the calendar year, has yielded a net positive gain, and thus reinforcing the concept of the “Santa Rally”. In order for that to happen again, SPX would need to stay above 2050 and remain there through year-end. 

My Trades:

• Added two new positions to the portfolio yesterday. 
• Traded in and out of NFLX position yesterday. Currently long in the stock. 
• Not expecting this to be a heavy trading day for me (I said that yesterday, and I ended up adding one new position). Active trading for me to resume next week, to start the new year.  
• Currently 70% Long / 30% Cash
• Remain long UTX at $94.58, UPRO at $60.63, QLD at $76.77, ADBE at $92.42, and three additional positions. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: