Today’s Trading Plan: Kuroda Stirs The Pot

Technical Outlook:

• Despite an early sell-off, SPX managed to (surprise) buy the dip and rally the market higher to close out the day. 
• FOMC Statement was released yesterday and there was no mention of a possible rate hike in June, leading investors to believe that it is not a live meeting, thereby rallying the market. 
• Bank of Japan last night did not do enough to impress investors and as a result, spooked the market into a sell-off in the futures. 
• USD/JPY has dropped nearly 3% following the BOJ news. 
• Despite a 5/10 cross over on the moving averages, SPX managed to recapture both MA’s yesterday. 
• A very slight increase in volume on SPY yesterday, but well below the average. 
• Interestingly enough, SPY has not seen above average volume since February 11th – the day that the market bottomed from the sell-off. 
• Head and shoulders pattern on SPX was significantly hampered following the FOMC Statement. It can still play out, but not as “picturesque” as it was heading into the day. 
• VIX continues to struggle to break the down trend established off of the February highs. Tested the last three days and failed each time. Will be tested again today. 
• A break below 2077 would break below the neckline of the 30 minute head and shoulders pattern. 
• A break below 2073 would break below the lows of last week which hasn’t happened in the last 11 weeks now. 
• Advancers have been incredibly strong of late despite weak or minimal moves from the market as a whole. This is a rare phenomenon. 
• Today the FOMC Statement comes out at 2pm eastern. Don’t fall for the initial move that often results in a market head-fake. 
• SPX has closed above the previous week’s lows for 11 straight weeks. The record is 13 weeks – as you can see, we are in some rare air here, and the likelihood that it persists isn’t very favorable. 
• It is very important to be aware of the potential for a strong pullback here and to manage your long position risk accordingly. 
• April has been bullish in nine of the last ten years. 
• Yellen’s dovish outlook as it pertains to rate hikes has been, in large part, the reason for the massive rally off of the February lows. 

My Trades:

• Added one new swing-trade to the portfolio. 
• Currently 20% Short / 80% Cash
• Remain Long: SPXU at $27.67 (Bearish ETF)
• Will look to add 1-2 new short positions today if the market seeks to push lower. Will flip to the long side if price action can break out of the current trading range. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: