Today’s Trading Plan: Priming for a Bounce

Technical Outlook:

• Fairly quiet day for the market yesterday as it managed to close with a non-gap, doji candle.
• SPX failed to hold the early gains and an attempt to drive the market lower was quickly bought up at the end. 
• Considering how much the market has sold of over the past two weeks, the market is due for a significant bounce and futures are already pushing higher here. 
• Bounces can last 2-3 days with no problem. It is key that shorts aren’t held during this time. 
• VIX dropped 2.9% yesterday to close at 26.83. 
• SPX 30 minute chart suggests that we may be seeing a double bottom form on the chart. 
• Yellen speaks later today and that should ignite a market response. 
• Russell is down eight straight days – something that hasn’t been seen in over eight years. 
• Don’t be quick to short this market bounce. Let it play out first. 
• SPY volume dropped off a bit, but was still about average. 
• I have some concerns that the lack of new lows on T2108, and no-where near new high on the VIX, could ultimately lead to a bullish divergence for stocks. 
• There is more factors to consider now in the market besides, Yellen & interest rates, China Growth, Greece, etc. Now you have possible government shutdown due to Boehner resigning, and Yellen & health concerns. 
• Seasonally speaking we are in the middle of a three week period in the market that is historically the weakest period of the trading year. 
• The Fed has never raised interest rates at a point where the market was trading lower on the year. 
• 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. 

My Trades:

• Coverd CSCO at $25.67 for a 0.6% loss yesterda.
• Did not add any new swing-trades yesterday. 
• 100% Cash
• Will look to play the market bounce today. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: