Today's Trading Plan: Bears Creeping In
Technical Outlook:
- The market continued with the same story that it has been engaged in for the past four months and counting... Buy every dip you can get your hands on.
- SPX sold off early on, but managed to recover nearly 75% of its losses by the close of the day.
- SPY volume, as it has done all week, showed extremely weak volume readings, well below average, but did increase for a second straight day.
- The 5-day moving average continues to provide rising support for the market. That will be tested again today with the futures down hard to start things off.
- With that said, weak opens have been very problematic for the bulls of late.
- The volatility index, VIX, rose for a fourth straight day. During this time, the market remains right near its rally highs.
- SPX 30 minute chart shows some signs of distribution taking place. A sell-off could find support in the 2102-5 area.
- Rising trend-line off of the 5/19 lows on the 30 minute chart looks to be broken today at the open.
- For the bulls, they need to maintain the 2111 level as this marks the previous highs in the current rally.
- The tendency for the bulls of late has been to allow the bears to run the markets lower in the first hour of trading, followed by a consistent rally throughout the remainder of the day.
- If SPX doesn't take out the all-time highs soon, speculation will quickly swirl that the market is starting to roll over again.
- It appears that today's weakness is a result of brexit starting to nudge its way into the headlines again.
- I believe, at this point, profits have to be taken aggressively, and avoid the tendency to let the profits run - the market is in a very choppy range that has mired stock price for the past two years. Unless it breaks out of it and onto new all-time highs, then taking profits aggressively is absolutely important.
My Trades:
- Added a short position to the portfolio yesterday.
- Did not close out any positions yesterday.
- Currently 30% Long / 10% Short 60% Cash
- Remain long ZAYO at $27.96 and two other positions.
- Will look to possibly add 1-2 new positions today if the market can continue pushing higher.
Chart for SPX:
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