Technical Outlook:

  • SPX pulled back on Friday for a second consecutive day, albeit barely. 
  • Most impressive was the pullback to the 5-day moving average on SPX and SPY and the immediate bounce thereafter. 
  • Volume was incredibly light on Friday, though higher than what we saw on Thursday, it was still below average readings. 
  • SPX is poised to breakout and confirm the double bottom move by establishing a higher-high in the market for the first time since 12/29. 
  • This bottom is showing signs of being similar to that of what we saw in late September of last year when the market bottomed for a second time then went on a monster rally thereafter. 
  • SPX 30 minute chart has put together a bull flag pattern that it will likely confirm at the open today. 
  • The 50-day moving average could be in play today, and may be a point of resistance for the market. It hasn’t had a true test since last December. 
  • VIX continues to deteriorate and despite another day in the red for SPX, VIX continued to melt away, dropping 5.1% down to 20.53. Today’s open will likely drop it below that pivotal 20 level. 
  • Also worth noting on the VIX was the fact that it broke the support level at the 50-day moving average and rising support off of the late December lows. 
  • T2108 (% of stocks trading above their 40-day moving average) held strong remains at the 40% level with a strong bullish tilt to it. 
  • Watch for whether USO can break the down trend off of the November highs. It is poised to test this resistance level again today. 
  • Insane price movements every day being created by computer generated trading (HFT’s) in a highly volatile market marked with enormous headline risk. 
  • My Trades:

  • Added two new long positions to the portfolio yesterday. 
  • Did not close out any swing-trades.  
  • Currently 20% Long, 80% Cash
  • Will look to add 1-2 new positions to the portfolio with a trending market to the upside. 
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