• SP 500 Market Analysis 10-28-15

Technical Outlook:

  • SPX pulled back perfectly to the 200-day moving average yesterday and formed a nice hammer candle right off of it. 
  • The selling of the past two days has been methodical and orderly – no panic whatsoever. 
  • Volume on SPY has been non-existent the last two days and less than half of what is considered average. 
  • the 2079-80 range is the next logical area of resistance for the market to challenge. 
  • 30 minute chart of SPX suggests a bull flag pattern at the top of the trading range. 
  • Seasonally this is the strongest time for the stock market so a major rally like what we are seeing, is no big surprise and not at all uncommon. 
  • Support for now appears to remain solid above the 200-day moving average. 
  • Today the FOMC statement comes out. While I don’t expect them to raise rates or to drastically affect the market at all, they could insert some new and unexpected language into the statement that could trigger a sell-off. Always be ready for that. 
  • VIX rallied for a third straight day – but all of its efforts during this period have been marginal gains. 
  • Despite the rally of the past two days and the week prior, the T2108 (% of stocks trading above the 40-day moving average) has completely flat-lined. I am watching for a downside break at this point below 55% (currently at 55%). The flat-lining indicator is a major divergence against this market rally. 
  • Ultimately, price on SPX is entering a range that has notoriously been difficult trading for most and one that vacillates consistently within a narrow range. 
  • 10-day moving average continues to be a strong barometer of market direction – a close below it would represent a short-term reversal. 
  • The Fed has never raised interest rates at a point where the market was trading lower on the year. Currently SPX is trading in positive territory heading into Wednesday’s announcement. 


My Trades:

  • Added one new swing trade yesterday. 
  • Did not close out any positions yesterday. 
  • 20% Long / 10% Short / 70% Cash
  • Remain long: DIS at $105.88, MSI at $70.66
  • Will look to add 1-2 new swing-trades to the portfolio today.
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 10-28-15

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