Today’s Trading Plan: Dip Buyers Still Got It

Technical Outlook:

• Huge turnaround yesterday as SPX managed to rally 34 points off of the lows of the day and actually finish in positive territory. 
• The problem with a day like yesterday is that the only people who win from it are those who had no positions in either direction coming into the day, or that managed to cover their shorts before the massive rally. Otherwise, bulls got stopped out in the morning and bears got squeezed out in the afternoon. 
• Nice rising trend-line still holding off of the July lows. 
• Essentially the market is in a triangle pattern since early July on the daily chart. A break above 2103 or below yesterday’s lows on a closing basis would lend some credence to future market direction. 
• Volume was extremely high yesterday on SPY – this highest in over a month. 
• SPX gearing up for a flat open. 
• SPY 30 minute chart shows a somewhat disfigured inverse head and shoulders pattern forming since August 11th. 
• VIX spiked above 16 yesterday but gave it all up to close 0.7% lower at 13.61. 
• A lot of indicators like the T2108 (% of stocks trading above the 40-day moving average) are diverging from price in a very bullish manner, but overall, price action on SPX still struggles to make any kind of sustained move. 
• Continue to watch the 200-day moving average which remains stubbornly strong against the recent selling winds of the market. 
• A view is emerging that a rate hike in September is off the table. 

My Trades:

• Added three new long positions yesterday. 
• Closed out three positions yesterday. 
• Stopped out of EBAY at 27.52 for a 4.4% loss. 
• 40% Long / 60% cash. 
• Remain long: FB at 92.93, UPRO at 67.17 (re-entered these trades). 
• The key today will be whether the bulls can continue the momentum from yesterday’s rally off of the lows of the day. They can’t afford to drag this thing much lower. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: