Today’s Trading Plan: In the Hands of Janet

Technical Outlook:

• S&P 500 (SPX) continued its selling yesterday for the fourth time in the last 5 trading sessions. 
• Currently SPX is down for the month, albeit less than one point. If this holds, it will snap a the market’s streak of five months trading higher. 
• Watch 2168 today on SPX. If that price level breaks, you’ll likely see a move towards the lower 2150 to challenge the current higher-low. 
• SPDRs S&P 500 (SPY) volume fell off a slight bit yesterday – overall the volume reading was just below recent averages. 
• The 20-day moving average remains broken. On the daily bands, SPX is now trading in the lower region. 
• Today’s price action will be headlined by Janet Yellen’s speech in Jackson Hole at 10am eastern. Expect a greater amount of volatility than what we have seen of late to ensue. 
• CBOE Market Volatility Index (VIX) is trying to come out of its most recent base, but will need to see some follow through in order to keep the market bulls from driving it lower again. 
• T2108 (% of stocks trading above their 40-day moving average) shows stocks are weakening much quick under the surface than what the market indices suggest. 
• Only 60% of stocks are trading above their 40-day moving average. 
• Oil showing some signs of trying to stabilize its price with a bull flag trying to now form on the United States Oil Fund (USO)
• 30 minute chart of SPX shows that a double top pattern is still very well alive and close to confirming. 
• SPX attempting to sell off for a second consecutive week, which is something that hasn’t been seen since the 3 week Brexit sell-off (also counting the two weeks that led up to it).
• Dow Jones Industrial Average (DJIA) is starting to give more legitimacy to the double top possibilities with yesterday’s sell-off. 
• 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:

• Sold SCHW yesterday  at 30.45 for a 1.1% profit. 
• Added one new long position yesterday. 
• May add 1-2 new swing-trades to the portfolio today. 
• Any new trades won’t come until Janet Yellen’s Jackson Hole Speech. 
• Will consider adding additional short positions to the portfolio as the market warrants it.
• Currently 20% Long / 20% Short / 60% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: