Today's Trading Plan: Cinco De Petróleo
Ryan Mallory | May 05, 2016 09:14AM ET
Technical Outlook:
- S&P 500 sold off for the fourth time in the last five days and closed yesterday below the lows from last week.
- There was almost a test of the 50-day moving average yesterday but the dip buyers stepped in before that could take place.
- Again yesterday afternoon we saw the dip buyers come in during afternoon trading and lift price off of the lows of the day.
- In essence the bears are unable to get even one clean, solid sell-off that doesn't get eventually bought up.
- There is plenty of talk about a market rally today, and that is very much possible considering that oil is up quite a bit in overnight trading and futures up slightly as well.
- The 30 minute chart of S&P 500 has a solid series of lower-highs and lower-lows in place.
- SPY (NYSE:SPY) volume was slightly below recent averages and dropped off some from the day prior.
- VIX is really struggling to find some momentum here and push through the 16.40 level as it has been rejected at that price point for four straight days.
- T2108 (% of stocks trading above their 40-day moving average) continues to deteriorate, dropping another 5.2% down to 62%. As stated yesterday, it has clearly broken out of its recent range.
- The objective for the bulls here should be to get price back over 2073, while the bears should be attempting a move to get back below 2040.
- Historically the May through October time frame is much weaker than the rest of the year.
- 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:
- Added one new short position yesterday.
- Closed out Verizon Communications Inc (NYSE:VZ) at $50.84 for a 0.3% loss.
- Currently 30% Short / 70% Cash
- Remain Long: ProShares UltraShort S&P500 (NYSE:SDS) at $18.69 (ETF Short)
- Remain Short: Oracle Corporation (NYSE:ORCL) at $39.74
- Will look to add 1-2 new short positions today if the market seeks to push lower. Will be aware for the potential of a bounce as well.
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