Today’s Trading Plan: Unfettered Bullishness

Technical Outlook:

• Following the FOMC statement yesterday, in which they did not raise rates, SPX managed to rally over 1.1% to close at 2090 and at new rally highs. 
• Market now setup for a possible test of all-time highs, when less then a month ago it was trading at 1871. Kind of insane really. 
• Despite the FOMC meeting yesterday, SPY still failed to register above average volume. I can’t remember the last time I ever saw that. 
• Some pundits think that the Fed has opened the door to a rate hike in December. I’m not buying it. 
• Bull flag on the 30 minute chart was confirmed with a breakout yesterday afternoon. 
• This market is a perfect example of how an overbought market can stay overbought far longer than one might expect. 
• VIX dropped another 7.1% down to 14.33. I expect at some point for VIX to test the 11-12 range before ultimately seeing any real selling pressures. 
• T2108 (% of stocks trading above the 40-day moving average) is still trading in a consolidated range. closing 16% higher at 64%. A close above 70% would push it out of this range. 
• 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. 
• Support for now appears to remain solid above the 200-day moving average. 
• 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 short-term reversal. 

My Trades:

• Added two new long positions yesterday. 
• Did not close out any positions yesterday. 
• 40% Long / 10% Short / 50% Cash
• Remain long: DIS at $105.88, MSI at $70.66
• 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: