Today's Trading Plan: It's The Bulls' Turn
Ryan Mallory | Sep 28, 2016 09:19AM ET
Technical Outlook:
- The whipsaw price action in S&P 500 (SPX) continued yesterday with a hard bounce following two days of selling.
- The price action is sporadic and unpredictable at this juncture. Very topsy-turvy - Last Thursday you had a bullish break above recent consolidation. Following Monday's price action, you had a bear flag pattern playing out on the daily chart and after Tuesday's close you had a bullish engulfing candle pattern. To say the least, there are strong opposing forces at work in this market.
- The natural inclination of this market is to engage in a pullback and relieve some of the recent price pressures. With the election just around the corner, the Federal Reserve is operating in a political capacity and making decisions that will keep the market from selling off.
- PowerShares QQQ Trust Series 1 (NASDAQ:QQQ) was by far the strongest of the indices with a move back above its moving averages and recapturing its 5-day MA.
- SPDRs S&P 500 (SPY (NYSE:SPY)) volume was at recent average levels but below Monday's showing.
- 30 minute chart of SPX is very choppy with a slight trend higher over the last two weeks.
- Sharp reversal on the CBOE Volatility Index yesterday with a 10% decline that took price down to 13.10. Looks to test the uptrend off of the August lows again.
- Despite the market being near its all-time highs, only 43% of stocks are trading above their 40-day moving average. Quite low.
- There are lots of headlines battling for supremacy right now: Oil & Iran production output, the debates, and Deutsche Bank (DE:DBKGn) (DB) stability.
- United States Oil Fund (NYSE:USO) is looking at a test of the rising trend-line off of the February lows. Currently that trend-line is sitting on the $9.95 level.
My Trades:
- Added two new long positions to the portfolio yesterday
- Covered three of my short positions yesterday for losses.
- May add 1-2 new swing-trades to the portfolio today.
- Currently 30% Long / 20% Long / 50% Cash
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