Today’s Trading Plan: Looking For A Move Beyond the Narrow Range

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: