• SP 500 Market Analysis 12-7-15a

Technical Outlook:

  • SPX had a monster rally on Friday that wiped out all of Thursday’s sell-off and nearly half of Wednesday’s. 
  • The bounce was critical for the bulls as the market was on the verge of slipping into another meaningful pullback. 
  • Instead, SPX recaptured the 5, 10, 20, and 200-day moving averages in one fell swoop. 
  • Volume on SPY was enormous, eclipsing even the levels we saw on Thursday and represented the largest reading since the rally on 10/2 when the market had just bottomed for a second time and bounced off of those lows. 
  • VIX sell-off was significant as well with an 18% drop as it failed to push through the resistance I noted in Friday’s trading plan. 
  • T2108 (% of stocks trading above their 40-day moving average) had a strong snap-back as well with a 18% rally getting back up to 43%. Though on its chart there is no notable technical improvements as a result of this move. 
  • Inverse head and shoulders pattern is back in play here, as confirmation is at 2115. Secure that price level, and this market takes on a whole new meaning for the bulls. 
  • SPX 30 minute chart has price action back in the range where there was heavy consolidation prior to the 2-day sell-off last week. 
  • If the 11/16 lows are lost at 2019, you have a confirmed double top pattern that is now in play on SPX and the market turns decidedly bearish as a result. 
  • SPY is essentially sitting in the middle of the range that has plagued the market all year long, outside of the August/September sell-off. 
  • For twelve years straight, the market over the course of the last 30 trading days of the calendar year, has yielded a net positive gain, and thus reinforcing the concept of the “Santa Rally”.

My Trades:

  • Added two new long positions on Friday. 
  • Sold TSLA on Friday at $230.37 for a 1.6% loss. 
  • Will consider adding one to two new long positions to the portfolio today if the market can continue Friday’s rally today. 
  • 70% Long / 30% Cash
  • Remain long: AMZN at $673.85, ADSK at $63.63, CRM at $79.86, UPRO at $67.47 and three other positions. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 12-7-15a

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