Technical Outlook:
- S&P 500 (SPX) rallied back into the range high resistance yesterday, and potentially nullifying the pullback opportunity the market was looking going into the week.
- SPDRs S&P 500 (SPY (NYSE:SPY)) volume dropped off yesterday from the previous day's above average reading. Now it is in line with what what we have seen over the past week.
- On the 30 minute chart of SPX, there is a clear downtrend in place that has yet to be broken with lower-highs and lower-lows.
- USD/JPY continues its rally via BoJ intervention. Up another 0.5% this morning.
- The 5-day, 10-day and 20-day moving averages are all separated by less than a 3 point margin. The price range is tight, and is the tightest that this market has seen over a 30 day period since 1965 (that would be 51 years!).
- Stocks are continuing to lose momentum under the surface despite the market within points of its all-time highs. This can be most clearly seen by looking at the percentage of stocks trading above their 40-day moving average. Since July 18th, that number has dropped from 80% down to 59%.
- The market consolidated in a similar manner this time last year before ultimately leading to a large sell-off.
- CBOE Market Volatility Index (VIX) had one of its regular meltdowns, opening up higher but quickly giving up its gains and finishing 5.2% lower at 12.94.
- The market is showing a decoupling from oil as the rise and fall of the commodity in June, July and now August has not impacted the market substantially.
- Three support levels to watch going forward on SPX is 2168, 2155, and 2147. The breaks are only valid if the price can close below those support levels.
- Dow Jones Industrial Average (DJIA) has a double top that confirms on a move below 18247.
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My Trades:
- Did not add any new trades to the portfolio yesterday.
- Did not close out any trades in the portfolio yesterday.
- May add 1-2 new swing-trades to the portfolio today.
- Will consider adding additional short positions to the portfolio as the market warrants it.
- Currently 10% Long / 30% Short / 70% Cash
