Today's Trading Plan: Rejected At The Highs
Ryan Mallory | Feb 20, 2014 11:44AM ET
Pre-market update:
- Asian markets traded 1.4% lower.
- European markets are trading 0.6% lower.
- US futures are trading 0.1% higher ahead of the market open.
Economic reports due out (all times are eastern): Consumer Price Index (8:30), Jobless Claims (8:30), PMI Manufacturing Index Flash (8:58), Philadelphia Fed Survey (10), Leading Indicators (10), EIA Natural Gas Report (10:30), EIA Petroleum Status Report (11)
Technical Outlook (SPX):
- An attempt to make new highs on SPX yesterday was rebuffed and resulted in the biggest sell-off since 2/3.
- Two support levels to watch to day are 1825, 1809. The latter of which should result in more bears coming to the table to short this market.
- When testing significant resistance like we did yesterday at the all-time highs, I always consider it to be a bad sign if, when unable to break through, we sell-off instead of consolidate. It often indicates there is a lack of fire power to push price through.
- As a result, it is key for the bulls to hold the lows from yesterday and show at least a small bounce following yesterday's sell-off.
- VIX shot back hard into the 15's yesterday.
- Volume was also noticeably higher compared to recent days.
- Some distribution seems to be taking place on the 30-minute SPX chart.
- The biggest technical support level is the strength SPX found from the trend line that started off of the August '13 lows.
- Markets don't care about the economy nor earnings. That is not what is driving them. The markets only care about what the Fed is doing to keep equities propped up.
My Opinions & Trades:
- Closed MTW yesterday at $28.98 for a 3.1% gain.
- Closed HAR yesterday at $103.09 for a 1.8% loss.
- Added one short position yesterday.
- Remain long SLB at 90.48.
- Will consider 1-2 new positions based on market conditions.
- Long 10% / Short 10% / Cash 80%
- Join me each day for all my real-time trades and alerts in the SharePlanner Splash Zone
Chart for SPX:
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