Today's Trading Plan: Yellen On Watch
Technical Outlook:
- For 9 straight trading sessions, the S&P 500 (SPX) has followed a pattern of up, down, up, down.
- Nasdaq (QQQ) has traded in the same pattern for 11 straight trading sessions.
- Russell Index (IWM) looked the strongest yesterday as it broke out of its 10-day trading range to the upside.
- The big question will be whether the Fed will hint at future rate hikes at the September meeting. I think that will be very difficult to do considering that they would be doing it right before the election. Expecting a rate hike today doesn't seem feasible as they have done little to nothing to prep everybody for it.
- November 2 seems completely off the table just days before an election, which makes December 14th, the most likely scenario, when the 2016 election is over.
- Remember following the FOMC Statement the market can make several moves within the first 30 minutes of trading. Traditionally the first move has been the usually been the path the market ultimately takes.
- Price appears wedged between the 5 and 10-day moving averages on SPX.
- Interestingly enough over the past month you are finally starting to see a bend in the 200-day moving average to the upside. For much of the year it has been flat.
- SPX 30 minute chart remains very choppy with a possible double top that has formed.
- VIX continues to rise, and now back over the 13 price resistance level. Though the candles from the last two days suggests that the bulls cannot hold on to the strength in the VIX intraday.
- Multiple attempts over the past two days of trading to sell the market off has not resulted in any clear decisiveness from the bears. Very difficult to get short here until we see some breaks to the downside.
- Volume on the SPY actually picked up some yesterday and was the highest that has been seen in the past seven trading sessions. Still well above recent averages though.
- Apple (AAPL) reported earnings yesterday and for a change, has seen a huge boost in its share price following its report. This should provide a huge lift to tech and to a lesser extent, the market as a whole.
- United States Oil (USO) continues to trade without a bounce. Still sitting at the 50% Fibonacci Retracement level.
- If the slide continues, in the very near future, stocks will start reacting adversely to it.
- Watch 2155 on SPX - a break of this price level could lead to further selling today.
- 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.
My Trades:
- Sold EXPE yesterday at $117.52 for a 1.7% profit.
- I added one new position to the portfolio yesterday.
- 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 50% Long / 50% Cash
Chart for SPX:
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