Today's Trading Plan: Attempting To Rollover -

Today’s Trading Plan: Attempting To Rollover

Apr 05, 2016Jeremy ParkinsonFinance0

Technical Outlook:

SPX pulled back yesterday to the 5-day moving average and bounced ever so slightly in the final 30 minutes of trading.

Today the market is looking at a significant sell-off to start the day.

It is important to remind yourself of what happened on Friday when the market sold off and the subsequent ‘buy the dip’ rally that ensued.

Gap downs since the February bottom has been a nightmare for the bears to hold on to – more times than not it rallies instead.

Essentially SPX is looking at a gap down towards the 10-day moving average which has been extremely solid for the market of late. A close below this MA would be a telling sign that the market is looking to suddenly roll over here.

The market has hardly seen any correction over the last seven weeks – with only one of the weeks resulting in a lower close from the opening price.

Since the start of this rally on 2/12, the S&P 500 has rallied 63% of the time.

Extremely light volume reading yesterday – on par with the 3/28 reading that was the lightest of the trading year so far and nearly as bad as the Christmas Eve volume.

To gauge the strength of the selling, for starters the market needs to break the lows from last wee which is at 2043 and then establish a lower-low by breaking the 3/24 lows at 2022.

SPX 30 minute chart’s upward trend remains intact but could be broken with a move below the Friday’s lows.

VIX saw a nice pop off of the test of the rising trend-line off of the July 2014 lows. A strong 7.8% move higher.

T2108 also showed some concerning signs as well weakening more than what it has become accustomed to in recent weeks – dropped 4.5% down to 82.3%

The downtrend off of the July highs becomes the next testing point for this market as it seeks push through its resistance at 2095 an back into the 2100’s.

2100 is also significant because a close above this level potentially jeopardizes the two-year long standing head and shoulders pattern that the market has had in development. A close above 2116 absolutely destroys the pattern.

USO sold off for an ninth consecutive day and the tenth time in the last eleven trading sessions. It broke the Fibonacci 50% reetracement level and 50-day moving average.

cks doing so.

April has been bullish in nine of the last ten years.

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.