Technical Outlook:
- Pre-market strength following dovish actions taken by Draghi and the ECB has the market looking to breakout of the 30 minute bull flag pattern on SPX.
- SPX looking to get back above the 2000 price level.
- Declining resistance at 2020 off of the December highs and a test of the 200-day moving average share the same price level today and may provide a major challenge for the market. In order to do so, the market will have to rally in excess of 30 points on SPX.
- SPY volume yesterday was incredibly light - like 'end-of-year-holiday-volume" light and obviously well below recent averages.
- SPY on the daily is also sporting a strong bull flag pattern that it is likely to gap out of this morning.
- VIX failed to hold its rally yesterday and sold off -1.8% down to 18.34. Some resistance in the 19's for the VIX.
- T2108 (% of stocks trading above their 40-day moving average) is still holding strong with almost 83% trading above it.
- Don't go guns-a-blazin after this market today. While the recent trend favors it finishing higher, there is a possibility with the market being so overbought, with today being an exhaustion gap that sucks in the bulls only to send the market lower.
- USD/JPY showing signs of wanting to break out of its base, While a break below 1.08 on EUR/USD would represent a serious breakdown.
- USO coming out of its base nicely here with support at the 5-day moving average.
My Trades:
- Covered IWM yesterday at $106.63 for a 1% profit.
- Covered SDS yesterday at $20.43 for a 0.9% profit.
- Did not add any new positions to the portfolio yesterday.
- Currently 100% Cash
- Will look to add 1-2 new positions and follow the market's direction
Chart for SPX:
Comments
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