Today’s Trading Plan: Will Buyers Take Control Back

Technical Outlook:

• SPX managed to put a stop to the four-day sell-off yesterday and rally off of the 20-day and 200-day moving averages a slight bit. 
• SPY volume dropped off again and was well below average. 
• The price action of the last five trading days, despite four of them finishing lower, does not appear to be bearish at this point. In fact, the price action on the daily chart of SPX looks more like a bull flag than anything else. 
• VIX dropped 7.5% back down to 15.29. 
• I still expect that the market won’t have a notable pullback again until the VIX hits 11-12 range, which has been the case over the last 16 months. This could be reached very quickly in the short-term. 
• SPX 30 minute chart doesn’t have the sharply rising trend-line any more. Right now it looks more distributive and possibly a head and shoulders pattern forming over the last three weeks. Nothing confirmed, but should be watched. 
• There is a chance that this is the start of a bigger pullback. Since reaching rally highs last Tuesday, SPX has pulled back nearly 2%. At this point, trying to get heavily short is still not the best way to manage risk in this market. 
• A rate hike is expected out of December’s Fed meeting. However, I still would not be surprised if the Fed backed out of raising rates yet again. They’ve been doing just that for  years now. 
• Declining resistance off of the May highs at 2119-2120 continues to play as a force in this market. So far, price has been unable to break through this. 

My Trades:

• Closed AAPL yesterday at $117.51 for a 0.5% gain. 
• Closed PAY yesterday at 29.86 for a 2.9% loss. 
• 70% Long / 30% Cash
• Remain long: CRM at $79.25, FDX at $157.91, IWM at $118.08, XLF at $24.44, UPRO at $65.55.
• May add one additional position, but could also curb long exposure today depending on market action. 
• Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX: