Today’s Trading Plan: Waiting on the Fed

Technical Outlook:

• SPX has extremely low volume on a minimal move to the downside. This was due to the Jewish holiday, Rosh Hashanah which ends tonight. So there is a very good chance that we see more low volume action again today. 
• In fact, volume this low hasn’t been seen since 8/18, the day before the huge sell-off began across the market. 
• The 20-day moving average continues to fall at a rapid pace, and I expect the moving average to continue weighing heavy on the market’s ability to find any sustained upward movement today. 
• SPY continues to hover around the 5 and 10-day moving averages which have essentially gone completely horizontal, which has defined the market well over the past nine trading sessions. 
• Still though, this triangle pattern that SPX is caught up in over the past three weeks, should point to additional bearishness, but that is though to say with the Fed decision looming on Thursday. 
• VIX intraday volatility continues to decrease quite a bit, showing much smaller swings day-to-day. Yesterday it rose 4.5% up to 24.25.
• Ultimately, at the very least, I think this market will once again test the 1903-1911 price range sooner rather than later. 
• SPX 30 minute chart is showing the possibility for a short-term head and shoulders pattern. It won’t take much from the market to nullify it, but it is showing. 
• Considering we have had 10 straight weeks of alternating up/down/up/down if this week is to continue that pattern, then we are looking at a finish lower come Friday. 
• FOMC Statement comes out on Thursday, and there is a good chance that it holds the market hostage until then. We should also see our share of rumors regarding its outcome throughout the week. At this point, Yellen has played her cards close to her chest. 
• SPX 30 minute chart shows a double top and a double bottom with price trading right in the middle of the two. 
• The last 15 minutes of trading of late has turned into a real circus – the biggest moves of the day, and often times by a long shot, is occurring during this time. 
• The large gaps in the market, the record number of stock buybacks, and ETFs that are constantly accumulating/dumping large chunks of stocks, and most importantly the high frequency trading, shows just how illiquid this market has become in recent years. These entities are the most responsible for the massive market swings that stocks incur each day. 
• This market is one that seeks to fill traders with regret, whether it be for selling too early, selling to late, not being long enough, not being short enough. That kind of regret will manipulate you into trading in a manner that will bring ruin upon the capital in your portfolio. 
• Trade nimble, be careful about holding positions overnight, because the volatility is still at extreme levels and much of the daily moves are happening before the market ever opens. 

My Trades:

• Added one new swing-trade to the portfolio today. 
• Did not close out any swing-trades yesterday. 
• 10% short, 90% Cash
• Looking to add more short exposure today, but the market will have to provide me with good reason for doing so. Currently 10% short, and may add 1-2 more positions today. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: