Today’s Trading Plan: Holding True to 2011

Technical Outlook:

• After being up more than 17 points on the day, SPX dropped, within a two hour period, 44 points to the downside. 
• That marks one of the most significant intraday reversals we have seen this year. 
• SPX managed to close, as noted in the chart below, just above the rising support level off of the 10/14/15 lows. 
• This level must hold today, or SPX is likely heading towards 2019 and a possible double top confirmation. 
• S&P 500 has followed a similar path to that of 2011, in fact it is eerily similar, except with this market having much larger swings within a narrower trading range. 
• Nonetheless, 2011 also had an early December dip, before ripping higher for the remainder of the year. 
• In fact, prior to the 2011 December rally, SPX was down 7 out of 8 days. Currently, SPX is down 5 out of 6. 
• VIX rose 11.4% yesterday to 19.61 and clearing the downward resistance that had been weighing heavily on the index for over three months now. 
• T2108 (% of stocks trading above the 40-day moving average) shed another 10 points yesterday to finish at 27%
• SPX 30 minute chart shows a very choppy market contained in a very large +2 month triangle pattern. 
• SPY was notably higher than the levels we saw the previous two days and above recent averages. 
• With today’s early morning weakness, the traditionally strong seasonal factors associated with December is being put to question. However, in recent years, SPX has seen some selling across the board early on, before ultimately rallying higher before the end of month. 
• If the 11/16 lows are lost at 2019, you have a confirmed double top pattern that is now in play on SPX and the market turns decidedly bearish as a result. 
• 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:

• Added three new long positions to the portfolio yesterday. 
• Stopped out of AMZN at $657.30 for a 2.4% loss. 
• I will consider adding 1-2 new positions today if the market can avoid another sell-off.
• 70% Long / 30% Cash
• Remain long: ADSK at $63.63, CRM at $79.86, MSFT at $54.81 and four other positions. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: