• market indecision

market indecision

Technical Outlook:

  • Yesterday SPX showed strong potential leading up to the FOMC statement to break out of its four day price range and push and continue its dead cat bounce. But once the FOMC statement came out, SPX saw a 44 point reversal from the highs of the day. 
  • Volume saw a slight uptick yesterday and the strongest reading since  last Thursday but a bit light considering the typical amounts of volume that comes in during a FOMC Statement. 
  • Facebook (FB) posted a solid earnings report and is helping the market out as a result, to a certain extent. 
  • It still surprises me that there hasn’t been a ‘face-ripping’ rally to date despite the historic oversold nature that this market has been in. Shorts have not been forced to cover their positions and dip-buying hasn’t been all that aggressive when the market has in fact rallied. 
  • Yesterday was one of the occasions of late where oil rallied and the market didn’t follow suit. 
  • Oil charts looking stronger in the short-term than is SPX. 
  • It seems like a strong possibility at this point that the market will test the January lows again in the short-term. 
  • Whipsaw action in VIX y esterday saw a move of 2.7% higher to close at 23.11. 
  • T2108 (% of stocks trading above the 40-day moving average) faltered a bit by dropping 6% to close at 14.86.
  • So far this bounce off of the lows have been extremely sluggish. Intraday bounces continues to see euphoria wear off during afternoon trading. 
  • Prior bounces have seen massive 2-3% bounces each day on multiple days. So far this has not been the case. 
  • The only time we have really seen significant short squeezing from the market was Wednesday afternoon. Either the bears think they can ride this rally out, or the shorts are going to be forced to cover at much higher levels than anticipated. 
  • Confirming the head and shoulders pattern on the weekly chart of SPX/SPY will be critical for the bears if they are going to keep the downtrend going. 

My Trades:

  • Added one new short position to the portfolio yesterday.
  • Closed GOOGL yesterday at $721.15 for a 1.6% loss.
  • Closed NKE yesterday at $59.64 for a 2.5% loss. 
  • Currently 10% Short, 90% Cash
  • Staying light in this market is absolutely key. Strong bias at this stage is dangerous. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 1-28-16

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