Today’s Trading Plan: Employment the Focus

Technical Outlook:

• Tight trading range yesterday that saw price consolidate following the hard bounce off of the prior day’s lows. 
• Today is all about the Non-Farm Payrolls (NFP) Report. The market’s reaction to this report will likely set the stage for the rest of the day. 
• Volume on SPY dropped dramatically, going below recent averages. 
• Bear flag forming on the daily chart of SPX/SPY. A break below yesterday’s lows would be enough to break down and out of it. 
• 10-day and 20-day moving averages are firming up for the bulls but the 5-day moving average continues to offer resistance on SPX. 
• Current price action reminds me much of the interlude between the August and September sell-offs. 
• 30-minute chart in recent days forming what could be a head and shoulders pattern, but will need to break below the 1872 level in order to confirm on SPX. 
• VIX saw minimal movement yesterday rising 0.9% to 21.84. 
• Still some big moves in T2108, with a 9% rise to close at 31.51.
• Looking at the financials, despite the market having bounced some of late, financials are not showing near the same amount of bullishness. Instead, as a whole, trading near recent lows. 
• Insane price movements every day being created by computer generated trading (HFT’s) in a highly volatile market marked with enormous headline risk. 
• A rising trend-line in place off of the SPX 1/21 lows that was held yesterday. 
• There is a lot of stop-loss hunting out there in the market, and being agile with getting in and out of positions quickly has been extremely important. 
• Short-term the market is overbought and could see at the very least a retest of the 1812 level. 
• Confirming the head and shoulders pattern on the weekly chart of SPX/SPY will be critical for the bears if they are going to keep the downtrend going. 

My Trades:

• Added two new short swing-trades to the portfolio yesterday. 
• No existing swing-trades to close out from the day prior. 
• Currently 20% Short, 80% Cash
• Staying light in this market is absolutely key. Strong bias at this stage is dangerous. Will look to add 1-2 additional short positions today if the market tries to weaken. Extremely difficult intraday market conditions that is seeing major moves take place in short-time frames without any warning. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: