Today’s Trading Plan: Looking To Take Out April Highs

Technical Outlook:

• Over the course of the last three days the S&P 500 has sold off early on, only to recover all or most of its losses before the end of the day. 
• The “buy the dip” mentality is alive and well for the stock market right now. 
• Essentially, the bears have shown no willingness to sustain a sell-off, even on an intraday basis. 
• Eventually, the buy the dip mentality stops working, and traps bulls in plenty of long positions. They continue to buy the dip to no avail, and then create the circumstances for a snowball-style sell-off, as the longs eventually give up on their positions and spur on selling upon selling. 
• The Jobs report came in at a huge miss today with only 38k reported against 160k expected. It likely puts off a rate hike in June. It was the worst since September 2010
• SPX looking to make a move above 2111 and confirm the inverse head and shoulders pattern on the daily/weekly chart. 
• This is not your typical IH&S pattern, and does run the risk of failing as the confirmation is withing a couple of percentage points of new all-time highs and not at the bottom of a massive sell-off. 
• SPX broke out of the price range it had been trading in over the last five trading sessions and finally closed above the 2100 price level. 
• SPY volume once again fell to extremely low volume levels and well below average volume levels. 
• Hard sell-off in the VIX yesterday, and looks to see if it can break below last week’s lows and below the lower 13’s. 
• At some point this month, the brexit vote will become a concern for the market. So far, the market is ignoring its implications. 
• For the bears, the objective is simply to sustain a hard sell-off and to not give back those losses by the close. 
• This is still a choppy market – yes, the rally over the past week has been solid, but it is not one that you can be comfortable with. As long as price remains between 2040 and 2138, expect price to get whimsical in its direction. 
• The short-term head and shoulders pattern that we had been following last month has been nullified, but in the same time frame going back to April, you could make the case that a possible double top is forming if price begins to accelerate to the downside. 
• Of late, SPX has been riding up the upper band, which is good sign for the market
• You are officially entering into the summer months, where Brexit is a concern and the FOMC is more than likely at some point to raise interest rates.
• There is a lot at play here and a lot of potential to change the scope and shape of the market should this market continue rallying higher. 
• I believe, at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run – the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important. 

My Trades:

• Covered XOM yesterday at $88.44 for a 0.6% profit. 
• Did not close out any additional positions yesterday. 
• Added one new long position to the portfolio. 
• Currently 40% Long / 60% Cash
• Remain long: MSFT at $51.74, ADBE at $99.78 and two additional positions.
• Will look to possibly add 1-2 new positions today if the market can continue pushing higher. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: