Today’s Trading Plan: Leaping Past Resistance

Technical Outlook:

• Big day for the market on Friday, breaking through the 200-day moving average and the declining trend-line off of the December highs. 
• Volume was still below average and below the levels seen on Thursday for SPY. 
• This week is the FOMC Meeting that comes out at 2pm on Wednesday, which will no doubt create additional market volatility – particularly if they surprise the market with a rate hike. 
• The next price target for SPX will be to close the massive New Year’s gap down and close over 2044, which impressively enough, would put the market in positive territory for the year. 
• This recent market rally is a perfect example of why you never, ever hold short positions through a dead cat bounce. Instead you aggressively take profits. 
• At the aforementioned 2044 level on SPX, there is a significant amount of resistance that was created during February – August time period of 2015. 
• VIX starting to break the uptrend off of the October lows for the first time. 
• T2108 (% of stocks trading above their 40-day moving average) is now trading at 85.7% – the highest seen since early 2012 – or four years. 
• Oil weakness has been persistent throughout the night with a potential open lower of over -2%
• Bull flag pattern formed on SPY last week had a clean break to the upside on Friday. 
• SPX, in the last 9 hours of trading has managed to rally 52 points in a near non-stop fashion – insanely strong, but still on light volume. 

My Trades:

• Added one new swing-trade to the portfolio yesterday. 
• Sold SDS at 19.98 for a 1.7% loss. 
• Currently 10% Long / 90% Cash
• Will look to add 1-2 new positions and follow the market’s direction 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: