Today’s Trading Plan: Testing the 10-Day MA

Technical Outlook:

• Choppy trading session yesterday that saw price action crumble in the final hour of trading. 
• Price action on SPX is once again testing the 10-day moving average. This was tested twice last week and resulted in a strong bounce. 
• SPX continues to struggle with downward resistance off of the July highs at 2039. Tested in each of the last two days, resulting in a strong rejection each time. 
• Volume picked up for a second straight day under selling pressures. Still well be low recent averages. 
• A lot of action out of VIX yesterday popping 6% to close the day at 16.70. 
• 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 up on Thursday. Both instances saw a test of the 10-day moving average as well. 
• With a lot of resistance between the 2040-50 on SPX there is a lot of concerns among traders that the bears will finally be able to re-ignite the selling pressures on a failure by the bulls to break hard above the said resistance. 
• 30 minute chart of SPX shows some heavy distribution and a break of key support at 2020. 
• SPY just a shade below major resistance at $204.11, which represents the underside of the February through August trading range of this year. 
• 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.  
• SPX has undoubtedly cooled off some from its meteoric rise from earlier this month. However, this is expected and quite common even in the strongest of rallies. The upward moves going forward will be more measured and less euphoric. 
• The Fed has never raised interest rates at a point where the market was trading lower on the year. 

My Trades:

• Sold MA yesterday at $96.58 for a 1.2% gain. 
• Sold MAR yesterday at $73.93 for a 0.6% loss. 
• 40% Long / 60% 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: