Trading Plan for August 2, 2012
Pre-market update (updated 8:30am eastern):
European markets are trading 0.5% higher.
Asian markets in a mixed range from -0.7% up to +0.4%
US futures are trading moderately higher ahead of the bell
Economic reports due out (all times are eastern): Challenger Job-Cut Report (7:30am), Jobless Claims (8:30am), Factory Order (10am), EIA Natural Gas Report (10:30am)
Technical Outlook (SPX):
We saw the third straight day of mild selling in the SPX.
Over the last three days, the selling, has been light and without panic, which would signify more of a 'breather' for the markets than a legitimate change of winds for the market.
At this point, uptrend support rests at 1343.
SPX trading above all significant moving averages (10,20,50,200).
Volume has seen a steady increase since Monday.
Bull-flag from the past 3-days of trading has formed. But needs to bounce here, to validate it.
Markets remain in short-term overbought levels as well as on the weekly.
Very nice bull flag forming on the SPX 30-min chart.
VIX is a huge concern as it continues to spike higher despite the market seeing a slight sell-off over the past 3 days, sitting just a shade below 19.
Resistance barriers have, including the down-trend off of the 4/2 highs, been broken on Friday. There aren't any major resistance barriers in the near term for the SPX to face. Minor resistance lies around 1402-6.
If another sell-off were to ensue, watch for a break and close below 1329 for a new lower-low in the market.
At this point, the goal for the bulls has to be to continue to trade higher and challenge the 1422 highs from 4/2 which are now well within reach.
Solid support formed at the 50-day moving average.
Of concern is the bearish crossover signal found in this week's SharePlanner Reversal Indicator. Caution is warranted.
My Opinions & Trades: