Today's Trading Plan: A Busy Slate Of Earnings Ahead
Technical Outlook:
- SPX managed to climb higher on Friday, on little to no volume.
- SPY volume came in less than the day prior, and continues to hover at its weakest levels of the year.
- Last week marked the lowest SPY volume of the year.
- Tons of earnings reports this week and next. This week will see weakness creep back in to the market if big names disappoint.
- Consolidation over the last 7 days continues - a push higher today, would break price out of this near-two week holding pattern.
- VIX, despite Thursday's bounce was rejected at the key 13 price level and saw a hard sell-off.
- Very possible that VIX manages to push below 12 and into the 11's.
- The market is climbing the wall of worry, and despite what we might think or the overall economy, central banks are providing accommodating policy which will make a major sell-off difficult, particularly when the Fed seems unwilling to raise interest rates any time soon.
- With that said, Fed will be releasing its FOMC Statement at 2pm eastern on Wednesday. No press conference is scheduled.
- 30-minute chart of SPX shows indecision and back-and-forth rallies over the past few days.
- SPX is up for a fourth straight week. Last five times it has gone on to be up a fifth straight week as well.
- SPX reclaimed the 5-day moving average.
- Watch 2155 on SPX - a break of this price level could lead to further selling today.
- So far the bulls have only been willing to work off overbought conditions through time and not through a pullback. Most clearly seen over the last two years that the market consolidated.
- Oil continues to weaken and looks to be the case again today. This could be a factor in what eventually ends the bull rally in equities if the crude slide continues.
- 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.
- Market is assuming that rate hikes are pretty much off the table for all of 2016.
My Trades:
- Did not close out any swing-trades on Friday.
- Added one new position to the portfolio on Friday.
- May add 1-2 new swing-trades to the portfolio today.
- Will be closing a number of positions out this week ahead of their earnings report.
- Will consider hedging the portfolio as well with a short position.
- Currently 60% Long / 50% Cash
Chart for SPX:
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