Today's Trading Plan: The Fight To Freeze Oil
Technical Outlook:
- Two straight days of consolidation at the rally highs.
- Weakness this morning across the board in the indices as a result of a failure for oil producing countries to agree upon a freeze in production.
- As a result, USO is looking at a potential double top in the short-term as it starts to sell-off again.
- Declining resistance off of the July 2015 highs is a real threat to the market sustaining the current rally. A test of this downtrend should take place at around 2100.
- Pullback on the 30 minute SPX chart, current has the look of a bull flag pattern - but that could be all for naught with the gap lower expected this morning.
- Volume on SPY improved Friday but still slightly below average and still seeing the 50-day moving average of volume decline as well.
- T2108 (% of stocks trading above their 40-day moving average) still elevated and relatively unchanged from Friday's action.
- VIX falls for a fourth straight day, and is marching lower towards key support at 13-ish.
- The Russell 2000 index is testing its 200-day moving average again for a third straight time - none of which it has been able to break through. But no sharp rejection has been seen either.
- The market has been strong on the weekly chart rallying 7 out of the last 9 weeks.
- Personally, I wouldn't be surprised to see the market reverse very soon here, and start heading back lower again. I've seen a lot of late stage breakouts in individual charts of late, that trend higher for a few days before taking on huge amounts of selling thereafter. I'm not saying this will certainly happen, I am just saying to be aware of it.
- April has been bullish in nine of the last ten years.
- Yellen's dovish outlook as it pertains to rate hikes has been, in large part, the reason for the massive rally off of the February lows.
My Trades:
- Did not place any trades yesterday.
- Did not close out any swing-trades yesterday.
- Currently 10% Long / 90% Cash
- Remain long TLT at $129.52
- Will look to add short or long exposure here today depending on the direction the market decides to take.
Chart for SPX:
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