• SP 500 Market Analysis 11-2-15

Technical Outlook:

  • SPX closed on Friday right at the 5-day moving average. 
  • ES futures have rebounded nicely on ECB dovishness and favorable overseas economics reports. 
  • SPX traded in a parabolic manner during the month of October, very similar to the rebound that we saw in October 2011. It wouldn’t be surprising at all to see some profit taking here in November. 
  • A respectable pullback on Friday – watch the rising 10-day moving average today to see whether further selling today allows for the 10-day MA to hold strong. The two previous tests of this MA has resulted in very strong market bounces. 
  • SPY volume was higher from the previous day of trading but still below average. 
  • VIX rose 3.2% to 15.07. 
  • The only resistance level between current price action and all-time highs is the slightly declining resistance level off of the May highs. Current resistance sits at 2119. 
  • Previous consolidation on the 30 minute chart of SPX was setting up at a bull flag has now broken down in the very near term. 
  • Look for the 200-day moving average to offer a strong level of support going forward. 
  • SPX continues to trend nicely higher just underneath the upward Bollinger Band. 
  • Some pundits think that the Fed has opened the door to a rate hike in December. I’m not buying it. 
  • This market is a perfect example of how an overbought market can stay overbought far longer than one might expect. 
  • T2108 (% of stocks trading above the 40-day moving average) is still trading in a consolidated range. 
  • Seasonally this is the strongest time for the stock market so a major rally like what we are seeing, is no big surprise and not at all uncommon. 
  • Ultimately, price on SPX is entering a range that has notoriously been difficult trading for most and one that vacillates consistently within a narrow range. 


My Trades:

  • Sold DIS on Friday at 113.68 for a 7.4% gain. 
  • Sold RY on Friday at $57.17 for a 0.8% loss. 
  • Did not add any new positions on Friday. 
  • 20% Long / 10% Short / 70% Cash
  • Remain long: AAPL at $117.50, AAL at $46.02
  • Remain short: BBY at $34.49.
  • Will look to add 1-2 new swing-trades to the portfolio today.
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 11-2-15

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