Today's Trading Plan: The Draghi Pump -

Today’s Trading Plan: The Draghi Pump

Mar 10, 2016Jeremy ParkinsonFinance0

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: