EC Today's Trading Plan: End To A Historical Quarter -

EC Today’s Trading Plan: End To A Historical Quarter

Mar 31, 2016Jeremy ParkinsonFinance0

Technical Outlook:

Gap up yesterday held on but not in an overly convincing manner on the SPY – finishing slightly lower than its opening price.

Volume trailed off from the day prior and is still well below recent averages.

Potential bull flag pattern forming on the SPY 30 minute chart.

Yesterday’s price action represented okay follow-through on the break of the downward trend-line off of the November highs from the day prior.

VIX testing the recent lows from back in late October on the VIX, which only represented a few days prior to the October rally topping out officially.

The market is starting to feel like a hot craps roll right now. How long that can last is anyone’s guess, but when it stops, you’ll likely see the masses quickly flee.

T2108 (% of stocks trading above the 40-day moving average) hasn’t move nearly the entire month, remaining flatlined in the upper 80’s.

Today will mark the end to one of the most volatile quarters the market has ever seen, and the first time since 1933 that the market has dropped over 10% and finished in the green in the same quarter – that is as long as 2044 holds today.

Yellen’s dovish outlook as it pertains to rate hikes has been, in large part, the reason for the massive rally off of the February lows.

Support continues to come in on any and all tests of the 10-day moving average.

Oil continues to weaken, with USO dropping six straight sessions and seven of the last eight. The drop off of recent highs has had little consequence for the market.

Everything above SPX 2040 poses a lot of resistance for the market. However, the market’s behavior and strength in late, suggests that price action will be able to push through.

It is very possible right now, that we continue to rally into May before the market sees any strong renewed selling interest, much like the case of 2008 where a similar event took place before the rest of the year was mired in heavy selling.