Today’s Trading Plan: Heading Into the Close

Technical Outlook:

• With options expiration on Friday, SPX concluded a 71 point sell-off over the last two trading days, wiping out the market bounce from earlier in the week. 
• Divergence (bullish) over the past two days with the selling that was seen, as the VIX did not make new closing highs for December, despite SPX, Nasdaq, and Dow Jones Industrial making new closing lows for the month. 
• T2108 (% of stocks trading above their 40-day moving average) dropped 22 points to close at 20%, but it too did not create a new closing low. 
• SPX is gapping up this morning and possibly setting up for the overdue “Santa Rally”. 
• The Advance/Decliners was not overly impressive. Considering we were seeing ratios of 5 and 6 to one all throughout the previous week, this sell-off only saw a 2:1 ratio in favor of the decliners. 
• Volume on SPY accelerated dramatically on options expiration with the highest reading since September 17th. 
• This week and next represents the two best back-to-back weeks of trading in the market from a historical stand point. 
• SPY is sitting on a critical support level at $200 that, if it manages to close below, would likely mean an eventual retest of the September lows. 
• With this week being a shortened/Holiday week, expect for their to be be very light volume. 
• Bearishness rapidly increased Friday across the market, but this is also the one time of the year where getting short this market is so completely skewed against the trader in terms of being successful. 
• A lot of talk about the “Golden Cross” taking place on SPX with the 50-day moving average crossing above the 200-day moving average. I don’t put much weight behind this phenomenon. 
• For twelve years straight, the market over the course of the last 30 trading days of the calendar year, has yielded a net positive gain, and thus reinforcing the concept of the “Santa Rally”.

My Trades:

• Did not add any new swing-trades to the portfolio. 
• Closed out AAPL yesterday at $108.19 for a 2.6% loss. 
• Closed out MSFT yesterday at $54.26 for a 1% loss.
• I am looking to add new positions today based on direction and strength/weakness of t his market. 
• Currently 20% Long / 80% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: