Today’s Trading Plan: The Draghi Pump

Technical Outlook:

• Pre-market strength following dovish actions taken by Draghi and the ECB has the market looking to breakout of the 30 minute bull flag pattern on SPX. 
• SPX looking to get back above the 2000 price level. 
• Declining resistance at 2020 off of the December highs and a test of the 200-day moving average share the same price level today and may provide a major challenge for the market. In order to do so, the market will have to rally in excess of 30 points on SPX.
• SPY volume yesterday was incredibly light – like ‘end-of-year-holiday-volume” light and obviously well below recent averages. 
• SPY on the daily is also sporting a strong bull flag pattern that it is likely to gap out of this morning. 
• VIX failed to hold its rally yesterday and sold off -1.8% down to 18.34. Some resistance in the 19’s for the VIX. 
• T2108 (% of stocks trading above their 40-day moving average) is still holding strong with almost 83% trading above it. 
• Don’t go guns-a-blazin after this market today. While the recent trend favors it finishing higher, there is a possibility with the market being so overbought, with today being an exhaustion gap that sucks in the bulls only to send the market lower. 
• USD/JPY showing signs of wanting to break out of its base, While a break below 1.08 on EUR/USD would represent a serious breakdown. 
• USO coming out of its base nicely here with support at the 5-day moving average. 

My Trades:

• Covered IWM yesterday at $106.63 for a 1% profit. 
• Covered SDS yesterday at $20.43 for a 0.9% profit. 
• Did not add any new positions to the portfolio yesterday. 
• Currently 100% Cash
• Will look to add 1-2 new positions and follow the market’s direction 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: