Today’s Trading Plan: Rudy, Rudy

Technical Outlook:

• Friday had one of the more improbable rallies following an unexpected, great employment report, and sending the S&P 500 nearly to new all-time highs. 
• SPX is poised to establish new all-time highs at the open this morning. SPX has now risen 6 out of the last 8 trading sessions. Which will probably go down as one of the more incredible events I have ever witnessed, considering that it comes right after the Brexit sell-off and break of a major support level (others would include the 90’s tech rise/fall, 2008 recession, 2009 V Bounce, The Fat Finger Flash Crash) 
• Prior to Friday’s move, the market was actually leaning slightly bearish, and on Friday, it changed everything – which goes to show just how flexible one has to be with his/her bias when trading stocks, because in just one day, the market can completely flip on you. 
• SPX is the only index of the big four looking at establishing new all-time highs today, with the Nasdaq and Russell lacking considerably. 
• The market is stretched here – there is no doubt about that. But the central banks and their highly accomodative monetary policy keeps the market from experiencing any sustainable pullback. 
• For the bulls: close at new all-time highs today .
• For the bears: don’t let the bulls do that – simple as that. 
• Dow Jones Industrial average broke out of its bull flag trading pattern that it had been stuck in for the better part of 3 months. 
• SPY volume reading was impressive on Friday, break well above average readings for the first time in five trading sessions. 
• The T2108 (% of stocks trading above their 40-day moving average) is showing a significant divergence right now with only a 65% reading despite a 22% jump on Friday. Back in February through April, average readings were in the high 80’s. Something to watch there. 
• VIX is testing a major support level where all major rallies over the past two years have stalled out at. It will be interesting to see whether the VIX can break below the 13 level today. 
• Market is assuming that rate hikes are pretty much off the table for all of 2016. 

My Trades:

• Did not add any new positions to the portfolio on Friday. 
• Covered IWM at $116.05 for a 1.5% loss. 
• With the market pushing out of a 2-year long range, the only trade (it new all-time highs holds today) would be to the long side. 
• Will be looking to put 1-3 new trades to work today. 
• Currently 30% Short / 70% Cash
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: