Trading Plan for August 13, 2012
Pre-market update (updated 8:30am eastern):
European markets are trading in a mixed fashion.
Asian markets traded mixed/flat.
US futures are trading break-even.
Economic reports due out (all times are eastern): None
Technical Outlook (SPX):
Late afternoon rally managed to lift the markets into positive territory for a sixth consecutive day.
Volume, despite the strength in the market, is seeing holiday-like volume, which to put it plainly, is incredibly weird.
We remain well-overbought on all time frames.
If we were to rally for a 7th day in a row, it would be an event that hasn't happened in years.
Watch the 10-day moving average for minor support at 1390.
The six-day rally the market is on, hasn't occurred since 3/7-3/12.
However, the gains that are being made are sluggish at best, and without much fanfare.
Setting up for a pullback at the very least heading this week as buyers seem to be lacking conviction at these levels (just look at...yes...volume!)
SPX poised to make a move to 1422 and challenge the year's highs.
It's not uncommon to see large market rallies going into an incumbent re-election.
30-min chart has us primarily trading in a sideways channel.
If you look at the 4 previous higher-highs in the market since the 6/4 bottom, then one could conclude that we've reached another temporary top, and are prime for another pullback.
One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3
At this point, uptrend support rests at 1355.
SPX trading above all significant moving averages (10,20,50,200).
VIX has moved below 15 for the first time since March.
If another sell-off were to ensue, watch for a break and close below 1354 for a new lower-low in the market.
My Opinions & Trades: