Today’s Trading Plan: Downward Pressure Persists

Technical Outlook:

• A very strong gap up on Friday, held its gains and even pushed higher into the afternoon, until the final two hours which saw a sudden and dramatic reversal that put SPY into the red to close the day. 
• There is more factors to consider now in the market besides, Yellen & interest rates, China Growth, Greece, etc. Now you have possible government shutdown due to Boehner resigning, and Yellen & health concerns. 
• The intraday indecision of the market, where neither side can sustain any momentum beyond their gap opening, and now often times seeing massive fades back in the opposite direction, continues to muddle the market picture and the ultimate direction that it intends to take. 
• SPX looking at a gap down to begin the day, but would not rule out another fade higher, just because that has been recent market tendencies of late. 
• The 30 minute chart of SPX is very muddled. The best analysis for it is simple consolidated, range-bound price action with about a 120 point range. 
• 5, 10, and 20-day moving averages continue to act as heavy resistance overhead. 
• Volume on SPY has been average the past two days. 
• 6 out of the last 7 trading sessions on SPX have finished lower. 
• VIX barely finished in the green on Friday, wiping out the early weakness and closing at 23.62. 
• T2108 dropped 4.7% down to 21% and pointing for more downside possible. 
• Price action of late has had a strong willingness to consistently revert back to the opening price by the market close. Any intraday movements away from the opening price on SPY is eventually faded. 
• Seasonally speaking we are in the middle of a three week period in the market that is historically the weakest period of the trading year. 
• For swing-traders the gains/losses are made overnight night and you have to be willing to hold overnight in order to profit. 
• Furthermore the Fed has never raised interest rates at a point where the market was trading lower on the year. 
• The large gaps in the market, the record number of stock buybacks, and ETFs that are constantly accumulating/dumping large chunks of stocks, and most importantly the high frequency trading, shows just how illiquid this market has become in recent years. These entities are the most responsible for the massive market swings that stocks incur each day. 

My Trades:

• Added one short position to the portfolio on Friday. 
• Stopped out of CMG on at 739.10.
• 40% Short / 60% Cash
• Remain short: CSCO at 25.52, CCE at 48.79, BID at 34.55.
• I do not want to get more than 50% short on this market. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: