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Today's Trading Plan: 200-Day Moving Average Looms Heavy

November 13, 2012 – Comments (0) | RELATED TICKERS: SPY , IWM , QQQ

Pre-market update (updated 8:00am eastern):

Europe is trading -0.6% lower.   

Asian markets traded -0.9% lower. 

US futures are moderately lower. 

Economic reports due out (all times are eastern): NFIB Small Business Optimism Index (7:30am), ICSC Goldman Store Sales (7:45am), Redbook (8:55am), Treasury Budget (2pm) 

Extremely light day of trading due to Veterans  Day's and it being a holiday for banks yesterday. 

As a result we traded in a sideways pattern, which is the second day in a row that we've seen this. 

Still remained fixed below the 200-day moving average. 

Typically a dead-cat bounce is a 'snap-back' reaction in the market. It doesn't typically occur after days of consolidation. We may need to see additional selling if that dead-cat bounce is going to occur. 

Near-term support levels are are at 1374-5 and if that breaks there's support at 1356. Both support levels are considered minor support levels. 

If there is a rally in the coming days, I'd look for 1404 to be targeted resistance. 

We are undoubtedly oversold short-term and long-term. 

Price is back inside the lower-bollinger band. 

A lower-low was established at 1403 as well as a previous lower-high. All bearish developments of an established downtrend. 

Last time we broke through the 200-day SMA, it led to a major sell-off in August 2011 that lasted through early October of that same year. 

The 30-minute chart show a nice block of consolidation of late. 

VIX has been all over the map of late, and dropped 10% yesterday and settled at 16.37.

Chart for SPX: