Technical Outlook:

  • Despite an early sell-off, SPX managed to (surprise) buy the dip and rally the market higher to close out the day. kuroda laughing 1 0
  • 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:

SP 500 Market Analysis 4-28-16