Technical Outlook:

  • Massive breakout above stubborn resistance at the 1947-50 level that resulted in almost the biggest rally of the year. 
  • Such a massive rally on already extreme overbought conditions is unusual. Such a rally usually takes place in an oversold environment following a massive sell-off. 
  • SPX managed to bounce off of the rising trend-line from the February lows. 
  • SPY volume was slightly higher than what we saw over the past few days and more than anything in the past week – but still below average levels. 
  • The double bottom pattern that has been formed over the past two months officially confirmed yesterday with the solid breakout. 
  • It is difficult to gauge how much more gas is in this rally still. Heavy resistance is at and around the 1990 range that will be difficult for price to get through and a likely staging point for shorts to attempt another take down of this market. 
  • VIX had an absolute meltdown yesterday dropping nearly 14% down to 17.70 and at a level that hadn’t been reached since 12/31. 
  • SPX has formed a notable higher-high yesterday on the 30 minute chart and is due for some kind of pullback. 
  • T2108 (% of stocks trading above their 40-day moving average) popped 16% up to 70.83 – the highest reading since July 1, 2014.
  • SPX is now trading above the 5, 10, 20, and 50-day moving averages. 
  • A bullish kicker was formed on SPY yesterday by gapping above the sell-off from yesterday’s opening price. 
  • February marked the third month in a row SPX has finished lower on a monthly basis. This hasn’t happened since the summer sell-off of 2011. 

    • My Trades:

  • Did not add any new trades to the portfolio yesterday. 
  • Closed out SDS yesterday at 20.98 for a 2.2% loss.
  • Currently 100% Cash
  • Will look to add 1-2 new positions and follow the market’s direction 

    • Chart for SPX:

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