Today’s Trading Plan: Market Betting On No Hike

Technical Outlook:

• SPX has an unexpected, low-volume rally yesterday that saw SPX rise 25 points (+1.3%) ahead of the FOMC interest rate decision. 
• Triangle pattern broke out to the upside yesterday. There is still some declining resistance off of the 8/28 highs. 
• Break 1993, from those 8/28 highs, and SPX will be establishing a new higher-high. 
• Volume increased over the low levels seen on Monday, but still below average for a third straight day on SPY. 
• This is one of the few times prior to to a Fed decision where it is completely unknown as to whether the Fed will ultimately raise interest rates tomorrow, creating a great deal of uncertainty as a result. 
• VIX continues to drop, this time 7% lower down to 22.54. 
• Major rally on T2108 which saw the % of stocks trading above their 40-day moving average climb by 30% to 24%. 
• 20-day moving average was broken yesterday which previously provided some resistance for the market. 
• SPX 30 minute chart back at the top of its recent trading range. Could see some resistance here today. 
• Considering we have had 10 straight weeks of alternating up/down/up/down if this week is to continue that pattern, then we are looking at a finish lower come Friday. 
• The large gaps in the market, the record number of stock buybacks, and ETFs that are constantly accumulating/dumping large chunks of stocks, and most importantly the high frequency trading, shows just how illiquid this market has become in recent years. These entities are the most responsible for the massive market swings that stocks incur each day. 
• This market is one that seeks to fill traders with regret, whether it be for selling too early, selling to late, not being long enough, not being short enough. That kind of regret will manipulate you into trading in a manner that will bring ruin upon the capital in your portfolio. 
• Trade nimble, be careful about holding positions overnight, because the volatility is still at extreme levels and much of the daily moves are happening before the market ever opens. 

My Trades:

• Added one new swing-trade to the portfolio today. 
• Closed SDS at 22.17 for a 1.9% loss. 
• 10% short, 90% Cash
• Not likely to be aggressively adding positions in either direction today as the FOMC Statement comes out tomorrow on the interest rate decision. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: