Today’s Trading Plan: Searching for a Reason

Technical Outlook:

• Another day of weakness in the market which has been the main theme of this market for the past two weeks. 
• Despite 7 of the last 10 trading sessions finishing lower, the opportunity to profit from this market to he short side is very limited. The moves are very haphazard and lacks a true catalyst.  
• Yesterday saw half the losses wiped away in the last hour of trading, suggesting that dip buyers are alive and well. 
• There is a convergence of moving averages grouping around the 2100 area that include the 5, 10, 20 and 50-day moving averages. 
• With a higher-low off of the 200-day moving average and possibly a lower-high formed on Friday, you essentially have the making of a range inside of a range. 
• The sooner the market can break out of this 6 month funk where direction has been completely absent, the better. Trading opportunities are very limited in this type of market. 
• Volume on SPY increased for a second straight day and was slightly above average. 
• VIX rose 3.6% yesterday, but gave up most of its gains on the day as it came back down from the mid-13’s and putting the bounce off of the high 11’s in doubt. 
• SPX confirmed what sort of looks like a head and shoulders pattern  yesterday on the 30 minute chart. 
• By failing to make new all-time highs, the market will create a lower-high and a higher-low, adding additional directionless inside of a range bound market. 
• For the bears, pushing below last Monday’s lows is absolutely key here which sits at 2063. 
• Inverse head and shoulders pattern on the daily chart that will confirm if price action can break through to new all-time highs. 
• Oil is once again become a problem for the market again, as it broke the March lows on Friday and continued its move lower yesterday. 
• Nasdaq is by far the best chart among the indices right now. Others are very much range bound, but the Nasdaq has established a higher-high and higher-low. If Apple (AAPL) can actually join this rally, which is a large % of the Nasdaq, the rally could really take off. 
• My biggest ongoing concern with the market right now is the inability to establish new, clear-cut all-time highs that leads to an expansion of price as well. Instead SPX gets bogged down in the 2120-2130’s range and reverses course each time. 

My Trades:

• Added one new long position to the portfolio yesterday. 
• Closed out UPRO at 69.44 for a 1.7% gain. 
• 30% Long / 70% cash. 
• Remain long: QLD at 77.84, NFLX at 107.63.
• Will look to add 1-2 new positions today if the market can find its footing again. Otherwise, I will manage my current positions and consider some short opportunities. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: