Technical Outlook:

  • Another dull day of price action on the S&P 500 (SPX) where price dropped a meager -0.06%. stock market looking for direction higher
  • The common theme of this market continues to be the fact that SPX refuses to break and close below the 20-day moving average. 
  • 5-day moving average crossed below the 10-day moving average yesterday on SPX. 
  • SPDRs S&P 500 (SPY) saw a drop in volume yesterday. Well below recent averages. There has not been an above average day of trading on SPY since July 15th. 
  • If early price action holds, SPY is looking at a gap back above teh gap from 8/16, which would leave the previous gap unfilled, as long as today’s gap did not get filled at some point today. 
  • CBOE Market Volatility Index (VIX) had a big move yesterday, closing 8.2% higher, but unable to push through resistance at 13, though it did test it yesterday. 
  • Sharp sell-off in oil yesterday that has many wondering if the recent rally this month is over. A break below the august lows on United States Oil Fund (USO) would create and confirm a massive head and shoulders pattern. 
  • On SPX, watch support at 2168. Break it, and the index is likely going to 2147. 
  • Over the last three trading sessions on the 30 minute chart, SPX has become tightly coiled and choppy. 
  • The market is begging for a sell-off but with the central markets accommodating continuously, that also gets in the way of any kind of meaningful pullback. Not to mention it is blatantly obvious that they are shelving any kind of rate hike until after the election. 
  • Oil continued its meteoric rise off of the August lows on Friday. But showing some early morning weakness today. 
  • Dow Jones Industrial Average (DJIA) is keeping the double top pattern in play here. However it is coiling just underneath resistance which leads me to believe it wants to break through.  
  • Overall, August is the worst performing month for the Dow and S&P 500. 
  • At this point, and with the election ahead, I’d expect the market to keep rallying higher. I don’t expect there to be a rate hike between now and the election. To do so would impact the market and thereby the election. I don’t think the Fed wants that, particularly since Trump has indicated that he would replace Yellen. 

My Trades:

  • Added a long trade to the portfolio yesterday: HUN at $16.72. 
  • Closed BIDU yesterday at $173.94 for a 0.5% loss. 
  • May add 1-2 new swing-trades to the portfolio today. 
  • Will consider adding additional short positions to the portfolio as the market warrants it.
  • Currently 50% Long / 20% Short / 30% Cash
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 8-23-16