Today’s Trading Plan: Fed Keeps Wrecking Havoc

Technical Outlook:

• The Fed decided to keep interest rates the same yesterday, however in doing so, Yellen’s extremely dovish commentary on the economy, has now spooked investors into selling the news. 
• Yesterday’s day’s reversal after a huge surge higher intraday should be extremely concerning for bulls as it formed an extremely bearish, doji reversal candle. 
• Volume on the SPY was the strongest that has been seen in weeks. 
• SPY is looking at a decisive gap lower of nearly 30 points, which will re-introduce the volatility that has been missing from the market the past couple of weeks. 
• Once the market opens, much of the market’s rally from this week will be lost. 
• A lot of your equities will be setting up nicely for a resumption of the downtrend. If the downturn continues, then you will not see nearly as many as short setups as there will be today. 
• 1953-1955 on SPX will be a very key level for the bears – break that level and there will be a decidedly different and bearish tone to the market. 
• 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. 
• This market is one that seeks to fill traders with regret, whether it be for selling too early, selling to late, not being long enough, not being short enough. That kind of regret will manipulate you into trading in a manner that will bring ruin upon the capital in your portfolio. 
• Trade nimble, be careful about holding positions overnight, because the volatility is still at extreme levels and much of the daily moves are happening before the market ever opens. 

My Trades:

• Did not add any new swing-trades yesterday. 
• Did not close out any swing-trades yesterday. 
• 100% Cash
• Not likely to be aggressively adding positions in either direction today as the FOMC Statement comes out tomorrow on the interest rate decision. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: