Today’s Trading Plan: Finding Direction, Take Two

Technical Outlook:

• S&P 500 (SPX) traded in the third smallest range of the year yesterday and managed to finish up a smidge.
• Volume on SPDRs S&P 500 (SPY) dropped off drastically from the day prior and below recent averages. 
• This low volume on the market creates an environment where individual stocks can be manipulated much easier due to the lack of buyers/sellers, which thereby creates rapid swings in individual equities. 
• The market appears to be begging for a sell-off but with the central markets accommodating continuously, that isn’t appearing possible at the moment. If it does, it would go against the theory that they are purposefully holding off raising interest rates until after the election in order to insure market stability and no influence on the electoral process. 
• Volatility continues to fall through the floor, once again shedding 6.2% and testing key support here in the low-to-mid 11’s. 
• Oil continues to trade in a meteoric fashion. Up 10 of the last 12 trading sessions. Equities could care less as seen by the sideways price action of late. 
• SPX broke the streak of nine up/down trading sessions in a row yesterday by finishing higher. 
• Dow Jones Industrial Average (DJIA) is keeping the double top pattern in play here. However it is coiling just underneath resistance which leads me to believe it wants to break through.  
• The bulk of the earnings season is behind us. No significant disasters from the big names that reported that negatively impacted the market as a whole. 
• Overall, August is the worst performing month for the Dow and S&P 500. 
• At this point, and with the election ahead, I’d expect the market to keep rallying higher. I don’t expect there to be a rate hike between now and the election. To do so would impact the market and thereby the election. I don’t think the Fed wants that, particularly since Trump has indicated that he would replace Yellen. 

My Trades:

• Closed three trades out yesterday. 
• Added two additional swing trades yesterday.  
• May add 1-2 new swing-trades to the portfolio today. 
• Will consider adding additional short positions to the portfolio as the market warrants it.
• Currently 40% Long / 10% Short / 50% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: