• searching for market direction

searching for market direction

Technical Outlook:

  • SPX continued yesterday in its current 5-day trading range. The market is not providing clear direction here and being light until it shows otherwise is absolutely key here. 
  • I still think that there is a retest of the month’s lows in the near futures, at which point I think that is where you will see the strong market bounce, assuming it can hold that 1812 level.
  • Volume yesterday was much weaker than anything we have see of late or this year for that matter on SPY.
  • For the bears a move below 1872 is needed to establish a downward bias. 
  • For the bulls it is a little bit less clear, but a move above 1910 would be a great start. 
  • T2108 (% of stocks trading above their 40-day moving average) has finally started to move off of the recent lows, moving another 22% to 18.14, but still a long ways from normal readings. 
  • VIX continues to peal off its recent gains dropping another 3% down to 22.42. Still heightened volatility consumes this market. 
  • Bank of Japan decided to go NIRP last night, introducing negative interest rates and spiking the market futures market as a result. 
  • MSFT had earnings last night with a moderately positive response. AMZN earnings report was met with heavy selling, wiping out all and more of the strong rally it had experienced during yesterday’s trading session. 
  • SPX 30 minute chart is mirroring in more detail the extreme chop of the last five trading sessions. 
  • It still surprises me that there hasn’t been a ‘face-ripping’ rally to date despite the historic oversold nature that this market has been in. Shorts have not been forced to cover their positions and dip-buying hasn’t been all that aggressive when the market has in fact rallied. 
  • So far this bounce off of the lows have been extremely sluggish. Intraday bounces continues to see euphoria wear off during afternoon trading. 
  • Confirming the head and shoulders pattern on the weekly chart of SPX/SPY will be critical for the bears if they are going to keep the downtrend going. 

My Trades:

  • Did not add any new positions to the portfolio yesterday. 
  • Did not close out any swing-trades yesterday. 
  • Currently 10% Short, 90% Cash
  • Staying light in this market is absolutely key. Strong bias at this stage is dangerous. I am waiting for a move outside of the current 5-day range. 
  • Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone

Chart for SPX:

SP 500 Market Analysis 1-29-16

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