Today’s Trading Plan: Road to Nowhere

Technical Outlook:

• Another similar day of trading to what we saw on Monday. SPX remains dormant to slightly weak all day long followed by a mid-day rally and hit head on with an end of day sell-off. 
• Futures this morning is indicating a move higher, however, over, 1/2 of the gains have been already peeled off prior to the market open. 
• SPX  successfully tested and held the 50-day moving average yesterday. 
• Conditions remain very stagnant in this market and the idea of wanting to add more positions to the portfolio remains a difficult proposition for undertaking considering there is a true lack of “edge” to trade off of in this market. 
• SPY volume was about average yesterday. 
• SPX 30 minute chart still looking to confirm a large scale head and shoudlers pattern. 
• VIX saw a massive rejection right at the declining resistance level off of the October highs. This is becoming quite normal for VIX to do. 
• In the very near term watch for a break below 2099 to see the selling accelerate. 
• RUT appears to be forming what could easily become a massive long-term head and shoulders pattern. Left shoulder and head already finished, now it is working the apex of the right shoulder. 
• Ultimately the bears need to push price below Tuesday’s lows at 2099, while the the bulls cannot settle for anything less than new all-time highs. 
• For the bearish case to really pick up momentum, a break below the previous higher-low would need to occur below 2067. 
• The problem with the bulls making new all-time highs during the course of 2015 so far, is that once they are established, nothing else happens; there is no rally that sees a rapid expansion in price. 
• Instead the all-time highs have been quickly sold off by the market in general.
• The market doesn’t care about the economy nor earnings. That is not what is driving it. The market only cares about what the Fed is doing to keep equities propped up. 

My Trades:

• I did not add any new positions to the portfolio yesterday. 
• I did not close out any trades yesterday.   
• 20% short / 80% cash. 
• Remain long: SDS (Ultrashort ETF) at 19.90.
• Remain short: LM at 53.07.
• I’ll consider adding 1-2 new depending on the direction and strength of the market. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: