Today’s Trading Plan: Under Key Resistance

Technical Outlook:

• SPX 2079-80 offering some resistance with price consolidating just underneath. 
• Support for now appears to remain solid above the 200-day moving average. 
• Opening/Closing prices of the past two trading sessions continue to remain tightly bound to each other. 
• Volume was extremely light on SPY yesterday, and well under half of what we have seen the last two trading sessions. 
• This is FOMC week. While I don’t expect them to raise rates, the market may continue in a holding pattern until an announcement comes out. 
• VIX rallied for a second straight day, finishing 5.7% higher at 15.29.
• After a hard rally on SPX 30 minute chart, nice bull flag pattern forming. 
• Despite the rally of the past two days and the week prior, the T2108 (% of stocks trading above the 40-day moving average) has completely flat-lined. I am watching for a downside break at this point below 55% (currently at 65%). The flat-lining indicator is a major divergence against this market rally. 
• 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. 
• 10-day moving average continues to be a strong barometer of market direction – a close below it would represent a significant market reversal. 
• The Fed has never raised interest rates at a point where the market was trading lower on the year. Currently SPX is trading in positive territory heading into Wednesday’s announcement. 

My Trades:

• Did not add any new swing positions yesterday. 
• Sold MFC yesterday at 16.81 – flat trade. 
• 20% Long / 80% Cash
• Remain long: DIS at $105.88, MSI at $70.66
• Will look to add 1-2 new long positions today on continued market strength. 
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Chart for SPX: