Daily Trading Plan for December 21, 2011
Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), Existing Home Sales (10am), EIA Petroleum Status Report (10:30am)
Premarket Update (Updated 8am eastern):
Futures are slightly down after selling off its overnight gains.
Asian markets were up on average about 1.4%
Europe is trading lower at -0.7%.
Technical Outlook (S&P):
Yesterday's rally engulfed the previous 5 days of trading activity. On the hourly chart, it finished with 7 straight green candles.
Such moves intraday, have often led to strong sell-offs the next day, which could very well be the case today.
On the daily chart, the action looks muddled with yesterday's strong move, and is currently in "no man's land" within the triangle price pattern (noted in the chart below).
Support on the S&P breaks down at 1240 on the 5 minute chart.
1196 is still very much in play, as a critical, rising support level for this market.
Expect a very light volume week - especially as we head towards the Christmas holiday, volume will dramatically drop off.
S&P, after yesterday's move, is off of oversold conditions.
10, 20, and 50-day moving averages were reclaimed.
Trend-line off of the 7/7 highs, just above the 200-day MA on the S&P, continues to act as resistance to price as well.
Note the larger downward channel that we are in as shown below.