Today’s Trading Plan: Little Room To Play With

Technical Outlook:

• SPX rallied nicely off the rising trend-line from the July lows on Friday. 
• Candle on the SPX daily chart formed a nice bullish engulfing candle pattern. 
• Despite some early morning weakness, and some not-so-great economic reports, SPX needs to rally above 2100 to break out of the triangle pattern. 
• With Friday’s rally, SPX managed to reclain the 5 and 10-day moving averages which has converged together. 
• SPY wedged in between the 200-day moving average as support and resistance at the 50-day moving average. One of those will break very soon. 
• Volume on Friday was very weak for SPY and the lowest I have seen in nearly two months (6/23).
• VIX dropped another 4.9% and ended at 12.83. Remember the hard support at around the 11.70’s where nearly every market reversal has taken place at this year. 
• T2108 (% of stocks trading above the 40-day moving average) is showing remarkable improvement and up another 12% to 37%. Price action there suggests a bullish move higher is in order. 
• Inverse head and shoulders pattern trying to play out on the SPX 30 minute chart. 
• The bear’s main objective today should be to close below the rising 200-day moving average which currently stands at 2076.
• A view is emerging that a rate hike in September is off the table. 

My Trades:

• Added one new long position on Friday.
• Did not close out any positions on Friday. 
• 40% Long / 60% cash. 
• Remain long: SBUX at 56.37, UPRO at 67.17, AAPL at 114.64, NFLX at 123.45.
• Bulls must build on the minor gains from Friday and continue the rally above the short-term triangle. I have enough capital at work at this point so I am only likely to add new positions today if I am to close another position currently in the portfolio. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: