Today’s Trading Plan: Starting To Spin Its Wheels

Technical Outlook:

• Another day where the bulls might not be ambitious for higher prices, but still willing to buy any dip that comes the market way. Despite the early selling, SPX managed to finish the day in the green yesterday. 
• At some point this month, the brexit vote will become a concern for the market. So far, the market is ignoring its implications. 
• SPX continues to hold on to the 5-day moving average. 
• Russell 2000 confirmed its inverse head and shoulders pattern suggesting higher prices ahead. 
• Still, the task remains for SPX to break through 2111, which is the April/rally highs. 2116 breaks the two year long-term head and shoulders pattern formed over the past two years. 
• Volume on SPY dropped off significantly yesterday and came in below average. 
• You get the impression that the VIX wants to rip higher, but by the end of each trading session it is well off the highs of the day. The bulls still need to get the indicator below 13 to sustain this rally. 
• For the bears, the objective is simply to get price back below last week’s lows, which, at this point, is a tall order. 
• SPX created a higher-high on the 30 minute chart and looking to break out of the sideways price action of the past five days. 
• This is still a choppy market – yes, the rally over the past week has been solid, but it is not one that you can be comfortable with. As long as price remains between 2040 and 2138, expect price to get whimsical in its direction. 
• The short-term head and shoulders pattern that we had been following last month has been nullified, but in the same time frame going back to April, you could make the case that a possible double top is forming if price begins to accelerate to the downside. 
• Of late, SPX has been riding up the upper band, which is good sign for the market
• You are officially entering into the summer months, where Brexit is a concern and the FOMC is more than likely at some point to raise interest rates.
• There is a lot at play here and a lot of potential to change the scope and shape of the market should this market continue rallying higher. 
• 2040-2138 price range on SPX continues to show just how difficult this price range is for trading, and over the last two years the price action has spent its time trading in it. 
• I believe, at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run – the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important. 

My Trades:

• Closed out AMZN yesterday at $719.86 for a 1.5% profit. 
• Did not close out any additional positions yesterday. 
• Added one new long position to the portfolio. 
• Currently 30% Long / 10% Short / 60% Cash
• Remain long: MSFT at $51.74, ADBE at $99.78 and one other position
• Will look to add 1-2 new long positions if it appears the bulls will buy the morning weakness. If not, I may add an additional short position to the portfolio.  
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: