Today’s Trading Plan: Dip Buyers Looking To Step In, Again

Technical Outlook:

• SPX pulled back for the first time on the week yesterday. Recent sell-offs have come in increments of two. 
• Once again, Janet Yellen showed just how incompetent she is as head of the Federal Reserve. Spoke about raising rates in December as well as negative interest rates – all in the same breath. 
• The five day moving average was tested for the fifth time in the past seven trading sessions and held perfectly. 
• Declining resistance off of the May highs at 2119 has refused to allow price, in the last two days, to move past. 
• At this point though, testing new all-time highs appears likely at this point. 
• VIX rose 6.7% yesterday to 15.51. 
• Nice rising uptrend from 10/22 forward has held nicely with multiple higher lows that tested and held resistance. 
• Volume on SPY continues to come in below average and the 50-day moving average is starting to drop sharply. 
• Russell throughout the week continues to be the strongest of the indices, playing catch up with the rest of the market’s broader move. 
• 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. 
• 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. 
• 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)
• Did not close out any positions yesterday. 
• 60% Long / 40% Cash
• Remain long: AAPL at $116.98, AAL at $46.02, CRM at $79.25, FDX at $157.91, PAY at $30.77
• 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: