Technical Outlook:- Another day of weakness in the market which has been the main theme of this market for the past two weeks.
- Despite 7 of the last 10 trading sessions finishing lower, the opportunity to profit from this market to the short side is very limited. The moves are very haphazard and lack a true catalyst.
- Yesterday saw half the losses wiped away in the last hour of trading, suggesting that dip buyers are alive and well.
- There is a convergence of moving averages grouping around the 2100 area that include the 5, 10, 20 and 50-day moving averages.
- With a higher-low off of the 200-day moving average and possibly a lower-high formed on Friday, you essentially have the making of a range inside of a range.
- The sooner the market can break out of this six month funk where direction has been completely absent, the better. Trading opportunities are very limited in this type of market.
- Volume on the SPDR S&P 500 Fund (ARCA:SPY) increased for a second straight day and was slightly above average.
- VIX rose 3.6% yesterday, but gave up most of its gains on the day as it came back down from the mid-13s and putting the bounce off of the high 11s in doubt.
- SPX confirmed what sort of looks like a head and shoulders pattern yesterday on the 30-minute chart.
- By failing to make new all-time highs, the market will create a lower-high and a higher-low, adding additional directionless inside of a range bound market.
- For the bears, pushing below last Monday's lows is absolutely key here, which sits at 2063.
- Inverse head and shoulders pattern on the daily chart that will confirm if price action can break through to new all-time highs.
- Oil once again has become a problem for the market, as it broke the March lows on Friday and continued its move lower yesterday.
- The NASDAQ Composite is by far the best chart among the indices right now. Others are very much range bound, but the NASDAQ has established a higher-high and higher-low. If Apple (NASDAQ:AAPL), which is a large % of the NASDAQ, can actually join this rally it could really take off.
- My biggest ongoing concern with the market right now is the inability to establish new, clear-cut all-time highs that lead to an expansion of price as well. Instead, SPX gets bogged down in the 2120-2130s range and reverses course each time.
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My Trades:
- Added one new long position to the portfolio yesterday.
- Closed out ProShares UltraPro S&P 500 (ARCA:UPRO) at 69.44 for a 1.7% gain.
- 30% Long / 70% cash.
- Remain long: ProShares Ultra QQQ (ARCA:QLD) at 77.84, Netflix Inc (NASDAQ:NFLX) at 107.63.
- Will look to add 1-2 new positions today if the market can find its footing again. Otherwise, I will manage my current positions and consider some short opportunities.