Today’s Trading Plan: Into the Thick of Earnings

Technical Outlook:

• Quiet day in the market yesterday with a finish five points higher on SPX.
• Right now SPX is riding that 5-day moving average. The last two days it has tested the MA and held it both times. 
• Today, there is some pre-market weakness that will likely result in another test of the 5-day MA. 
• Volume on SPY was incredibly weak. The weakest since 5/26 and one of the weakest volume days of the past year. 
• SPX on the weekly chart is attempting to string together its fourth consecutive week in the green. 
• SPX on the monthly chart is attempting to string together its fifth consecutive month in the green. 
• Despite impressive monthly streak, it has been marked with consistent volatility seen most clearly in the Brexit sell-off and rally to new all-time highs. 
• A break in the 5-day moving average could ultimately result in a pullback to the breakout level at 2120. 
• The next three weeks will be the thick of earnings season. Know when your stocks are reporting and plan accordingly. Expect plenty of large moves and for futures to be affected by the reports of FB, AAPL, GOOGL, AMZN and others. 
• SPY 30 minute chart has a nice sideways pattern of consolidation underway. 
• 3 doji candles in a row on USO which could mean the stock is ready to reverse to the upside. 
• VIX dropped almost two-percent yesterday down to 12.44. The lowest such reading since 8/10/15. 
• 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. 
• Market is assuming that rate hikes are pretty much off the table for all of 2016. 

My Trades:

• Added two new long positions to the portfolio.
• Closed NOC yesterday at $221.11 for a 0.8% loss.  
• May add 1-2 new swing-trades to the portfolio today. 
• Will consider hedging the portfolio as well with a short position. 
• Currently 30% Long / 70% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: