Technical Outlook:
- SPX 2079-80 offering some resistance with price consolidating just underneath.
- Support for now appears to remain solid above the 200-day moving average.
- Opening/Closing prices of the past two trading sessions continue to remain tightly bound to each other.
- Volume was extremely light on SPDR S&P 500 (N:SPY) yesterday, and well under half of what we have seen the last two trading sessions.
- This is FOMC week. While I don't expect them to raise rates, the market may continue in a holding pattern until an announcement comes out.
- VIX rallied for a second straight day, finishing 5.7% higher at 15.29.
- After a hard rally on SPX 30 minute chart, nice bull flag pattern forming.
- Despite the rally of the past two days and the week prior, the T2108 (% of stocks trading above the 40-day moving average) has completely flat-lined. I am watching for a downside break at this point below 55% (currently at 65%). The flat-lining indicator is a major divergence against this market rally.
- Ultimately, price on SPX is entering a range that has notoriously been difficult trading for most and one that vacillates consistently within a narrow range.
- 10-day moving average continues to be a strong barometer of market direction - a close below it would represent a significant market reversal.
- The Fed has never raised interest rates at a point where the market was trading lower on the year. Currently, SPX is trading in positive territory heading into Wednesday's announcement.
My Trades:
- Did not add any new swing positions yesterday.
- Sold N:MFC yesterday at 16.81 - flat trade.
- 20% Long / 80% Cash
- Remain long: N:DIS at $105.88, N:MSI at $70.66
- Will look to add 1-2 new long positions today on continued market strength.
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Chart for SPX:
