Today’s Trading Plan: Wall Street Heads to the Hamptons

Technical Outlook:

• SPX finished just barely in the red (while SPY finished just barely in the green) yesterday, and consolidating nicely at its 6-day highs. 
• The head and shoulders pattern that the bears had eagerly been waiting to have confirm, has been nullified. 
• All eyes are on the 1:15pm Janet Yellen speech. There is a strong possibility that, considering the forum, she will not even discuss interest rates. 
• SPY volume was extremely weak – the weakest of the year. Considering today is the day before a long 3-day weekend, I expect the volume to be even less. 
• Can SPX break through 2111 – the SPX April highs? If so, it sets the stage for a test of the all-time highs. Something that hasn’t been done in one year and one day (5/26/15).
• The strength of all the moving averages are currently beneath price action. 
• Sideways price action on SPX since the first hour of trading on Wednesday on the 30 minute chart. I would not be surprised to see more of the same today. 
• The strongest, most bullish week of price action, if today doesn’t fall apart, since March. 
• VIX is dropping down towards key, rising support which, since July 2014 has been where every rally has gone on and died at. Careful about getting too long as the VIX tests that level. 
• Crude managed to break above $50/barrel yesterday, but could not hold it into the close. 
• Almost comical, you now have a massive inverse head and shoulders pattern that is forming over the past seven months. A move around ~2103 would confirm the pattern. 
• It appears to me that the market isn’t seeing a lot of retail participants to the degree it had seen in past years. 
• The longer-term head and shoulders pattern on the weekly chart going back two years would be nullified on a move back above 2116. 
• There is a lot at play here and a lot of potential to change the scope and shape of the market should this market continue rallying higher. 
• 2040-2138 price range on SPX continues to show just how difficult this price range is for trading, and over the last two years the price action has spent its time trading in it. 
• I believe at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run – the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important. 

My Trades:

• Sold LNKD yesterday at $129.31 for a 1.3% profit. 
• Added two new long positions yesterday. 
• Currently 30% Long / 70% Cash
• I will look to add 1-2  new long positions to the portfolio today. May also hedge the portfolio if we start to see signs of weakness start to creep into the market.  
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: