Today’s Trading Plan: Rally Monkey On

Technical Outlook:

• Huge move yesterday after SPX broke above key resistance and back trading range from February through March. 
• Today’s gap up will put the market back into positive trading territory for the first time since 8/20/15. 
• 2080 – a support/resistance level that has been tested multiple times in the past and proved itself to be technically strong, will likely be tested again today. 
• 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. 
• Downward trend-line on SPY off of the July highs, was broken yesterday afternoon. 
• Volume on SPY was well above what we have seen in recent days, and well above average as well. 
• SPX looks to be gapping through through the 200-day moving average – very important that this level holds today. 
• 10-day moving average continues to be a strong barometer of market direction – a close below it would represent a significant market reversal. 
• Very little to no reason to be shorting the market at this point – follow the trend for as long as the market rally will last. 
• VIX dropped another 13.5% yesterday to close at 14.45. 
• T2108 (% of stocks trading above their moving average) popped 7% to close the day at 64%. Not much movement out of this indicator of late, and not establishing new, clear rally highs like SPX is managing to do. 
• Series of higher-highs and lower-lows has resumed on SPX 30 minute chart. 
• Interestingly, this week is playing out exactly the same way as last week. Tight consolidation on Monday followed by two days of selling and then a gap and rally on Thursday. Both instances saw a test of the 10-day moving average as well. 
• Dip buyers are continuously coming in strong during recent market opens of late, keeping the market from any hard sell-offs. 
• Essentially there are three resistance levels to watch: 1) Lower channel, range resistance at 2040 as shown below, 2) Declining resistance off of the July highs, which currently sits at 2039, and 3) 200-day moving average which also coincides with SPX’s break even level at 2059.  
• The Fed has never raised interest rates at a point where the market was trading lower on the year. 

My Trades:

• Added two new long positions yesterday. 
• Did not sell any stocks yesterday. 
• 60% Long / 40% Cash
• Remain long: DIS at $105.88, FB at $95.09, CVX at $91.28, TYC at 36.38
• Will look to add 1-2 new long positions today on continued market strength. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: