Today’s Trading Plan: The Double Top Takes Shape

Technical Outlook:

• To say that Friday was an epic market would be an understatement. Following the Brexit news, SPX dropped a cool 3.6% and looks to continue lower again today. 
• Here is what you have to be careful of  here – central banks. The Central banks will not want this market to continue its drop and will start intervening at some point to provide a bottom for stocks. Expect at some point this week, to see some shock headlines to drive the market back up. 
  
• VIX saw one of its biggest moves ever, rising 49% to 25.76. 
• Volume on SPY was the highest reading of the year, and the highest since 8/25/15, when the market was selling off ferociously. 
• T2108 (% of stocks trading above their 40-day moving average) dropped more than 42% on Friday, all the way down to 40.2%. 
• SPX 30 minute chart is an absolute mess and pretty much dysfunctional. However, a move below 2025 would really help the bears. 
• A test of the 200-day moving average will likely happen today which will be around 2021. 
• This is a difficult trading environment because there is a lot of headline risk. Don’t force trades, let the trades develop and come to you. Be weary of v-shaped bounces on intraday charts. Look for solid bases to form if you desire to play the bounce. 
• Biggest issue for the time being for the bears is that the Brexit vote to leave, may not generate a ton of additional headlines and there is no guarantee, that the politicians, who are against such a move, would even allow it to happen. 

My Trades:

• Day-Traded SPY for a 0.9% profit. 
• Added profits to the portfolio – I didn’t lose any capital. 
• No other transactions on Friday. 
• I stayed 100% cash over the weekend. 
• Don’t be surprised, in response to a central bank, for a hard bounce to happen this week. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: