Today’s Trading Plan: The Thunder Rolls

Technical Outlook:

• The melt up in the indices across the board continued yesterday, with the small caps surging and leading the way finally. 
• Monday kicked off an attempted sixth straight week of gains for the market. A feat impressive in and of itself. 
• The five day moving average continues to hold strong over the last seven days, testing it on four of those days. 
• While it would make sense to see the market pullback here, it doesn’t have to, and don’t think that you can force the market to do so either. Loading up on short positions is trying to stand in front of a locomotive, and expecting it to stop in time. 
• SPX has been overbought for almost a month now, which goes on to justify that the market can remain overbought longer than you can remain solvent. 
• Yesterday could be justified as a massive short squeeze as seen by the lack of any kind of intraday pullback. 
• Uptrend off of the September lows continues to hold together in a very steep and seemingly unsustainable manner. 
• 30 minute SPX chart shows a very steep uptrend still in place. 
• VIX Dropped 6.1% down to 14.15. 
• Big move out of T2108 (% of stocks trading above the 40-day moving average)yesterday as it managed to rally 12% to 67.5%. A move over 69% and into the 70’s would break it out of its current range. 
• SPY volume was notably weak yesterday and much lower than what we saw on Friday. 
• The only resistance level between current price action and all-time highs is the slightly declining resistance level off of the May highs. Current resistance sits at 2119. 
• Look for the 200-day moving average to offer a strong level of support going forward. 
• SPX continues to trend nicely higher just underneath the upward Bollinger Band. 
• Some pundits think that the Fed has opened the door to a rate hike in December. I’m not buying it. 
• Seasonally this is the strongest time for the stock market so a major rally like what we are seeing, is no big surprise and not at all uncommon. 
• Ultimately, price on SPX is entering a range that has notoriously been difficult trading for most and one that vacillates consistently within a narrow range. 

My Trades:

• Added two new swing-trades to the portfolio yesterday (long)
• Did not close out any positions yesterday. 
• 40% Long / 10% Short / 50% Cash
• Remain long: AAPL at $117.50, AAL at $46.02
• Remain short: BBY at $34.49. 
• Will look to add 1-2 new swing-trades to the portfolio today.
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: