Today’s Trading Plan: Uptrend Still Intact For Now

Technical Outlook:

• SPX is faltering as it struggles to break through and close above the highs of 9/17 of 2020. 
• 3-day range on the 30-minute SPX chart was broken yesterday on a move below 2006. 
• Yesterday represented the biggest sell-off since the entire rally started on 9/29. 
• Yesterday was a minor sell-off and doesn’t mean the rally is over. However, it is important to wait and see whether the rally has a desire to continue at this point. 
• SPY volume saw a noticeable pick up in volume from the day before, however, overall it was almost half of what the average volume has been of late.
• The low-volume sell-off on the SPY suggests that this pullback we saw yesterday is being conducted in an orderly manner with no real signs of panic.
• VIX ended its record-tying losing streak of 10 consecutive days, by rallying 9.3% to close at 17.67.
• Ultimately, I wouldn’t be surprised if the current rally in equities continues until VIX goes sub-11 again. 
• Despite the decline yesterday, T2108 (% of stocks trading above the 40-day moving average) doesn’t show any level of panic or concern at this moment with it only declining 8% to 60%. 
• Most concerning event to me yesterday was the fact that SPX closed below the 5-day moving average. This MA has offered a great deal of support throughout the current rally. Bulls will need to recapture this MA rather quickly. 
• 2059 is the break-even level for the market on the year. It also happens to be where the 200-day moving average is sitting at. 
• The Fed has never raised interest rates at a point where the market was trading lower on the year. 

My Trades:

• Sold EL yesterday at $83.04 for a 3.1% gain. 
• Did not add any new swing-trades to the portfolio yesterday. 
• 30% Long / 70% Cash
• Remain long: SBUX at $58.67, DIS at $105.88, GOOGL at $676.40
• My focus in trading remains to trade to the long side. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: