Today's Trading Plan: America Is Rabidly Bullish

 | Jul 18, 2016 09:23AM ET

Technical Outlook:

  • SPX finished lower for the first time after five straight green days.
  • Futures following Friday's close sunk on the failed coup attempt in Turkey. All those losses were erased with the opening print on Sunday night.
  • 5-day moving average still holding strong on the current market rally.
  • At this point, the market could really benefit from some consolidation, in order to avoid a sharp pullback.
  • SPY (NYSE:SPY) volume increased for a second straight day, and came in at slightly above average.
  • SPX 30 minute chart may be starting to see some consolidation on the 30 minute chart.
  • VIX continues to trade lower, and move below key support at 13 - a support level that has held for the better part of two years.
  • T2108 (% of stocks trading above their 40-day moving average) is starting to flat line a bit at 78-79% over the past few days.
  • Oil continues to bounce around over the past 7 trading sessions. Most noticeable on the USO (NYSE:USO) chart.
  • Advancing stocks on a daily basis, compared to declining stocks have not been as strong over the past 2-3 trading sessions.
  • I could easily see a pullback to the 2120 level which was the breakout area for this market, in the coming weeks, without ruining the upside potential of the market going forward.
  • 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.
  • There is a great deal of bullishness to this market right now despite the prevalent amount of worry. It has been over two years since the market has actually seen a legitimate rally and so it wouldn't be surprising to see this market continue its current trend higher as shorts are forced to face the new reality of the market.
  • Market is assuming that rate hikes are pretty much off the table for all of 2016.

My Trades:

  • Sold Canadian National Railway Company (NYSE:CNI) on Friday at $62.45 for a $4.0% profit.
  • Covered Royal Caribbean Cruises Ltd (NYSE:RCL) on Friday at $69.71 for a 3.9% profit.
  • Sold Netflix Inc (NASDAQ:NFLX) on Friday at $98.37 for a 2.4% profit.
  • Sold United States Oil (NYSE:USO) on Friday at 10.96 for a 1.4% profit.
  • Added one new long position to the portfolio on Friday.
  • May add 1-2 new swing-trades to the portfolio today.
  • Currently 20% Long / 80% Cash
h2 Chart for SPX:/h2 h2