Today’s Trading Plan: Doing Battle with the FOMC

Technical Outlook:

• Strong bounce out of SPX yesterday after having testing and holding the 200-day moving average the day prior. 
• SPX managed to reclaim the the 5 and 20-day moving averages. 
• At this point, I’m concerning myself with only one resistance level overhead and that is the 2129-2134 price level. That appears to be the dominant resistance level plaguing this market from moving higher and out of the current range. 
• VIX saw a sharp decline of 13.9% yesterday to finish at 13.44 which is remarkably low considering the fact SPX is just coming off of 5 days of straight selling. 
• Solid volume reading yesterday and above average on SPY. 
• The plan for the bears here is to take price back below Monday’s lows and ultimately below the July lows. If it can do that, it will create a new wave of fear in this market. 
• Today, there is a FOMC statement that comes out at 2pm. It is widely believed that they will reiterate their desire to increase rates this year. 
• Regardless, of what they say, know that the FOMC Statement can bring about multiple reactions in opposite directions initially, and that the first move shouldn’t be counted on to be the legitimate and ultimate direction the market takes in reaction to the FOMC. 
• If Monday, marked a short-term bottom, then you have a higher-low being established, which would break the series of lower-lows the market has recently been making. 
• Even with the sell-off of late, SPX still remains range bound and directionless, with the best opportunities (and only) coming from timing the tops and bottoms of each short-term reversal. \
• T2108 (% of stocks trading above the 40-day moving average) still performing dismally, but shouldn’t be a great surprise as when the market becomes as range bound as it has been of late, and kind of move lower in individual equities makes it easy to break the 40-day moving average in the process. 
• My biggest ongoing concern with the market right now is the inability to establish new, clear-cut all-time highs that leads to an expansion of price as well. Instead SPX gets bogged down in the 2120-2130’s range and reverses course each time. 

My Trades:

• Added one new long position yesterday. 
• Did not close out any long positions yesterday. 
• 40% Long / 60% cash. 
• Remain long: COST at 144.57, AAPL at 124.35, UPRO at 68.26. 
• If the market shows a willingness to start moving higher again today, I’ll add 1-2 new positions.
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: