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Trading Plan for August 23, 2012

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August 23, 2012 – Comments (0) | RELATED TICKERS: SPY , IWM , QQQ

Pre-market update (updated 8:30am eastern):

European markets are mixed in their trading. 

Asian markets were +0.5% higher. 

US futures are slightly lower ahead of the opening bell. 

Economic reports due out (all times are eastern): Jobless Claims (8:30am), PMI Manufacturing Index Flash (9am), New Home Sales (10am), FHFA House Price Index (10am), EIA Natural Gas Report (10:30am)

Technical Outlook (SPX):

Markets continue to languish of the past three trading sessions, but did manage yesterday to rally off of the lows and finish above the 10-day moving average. 

We tested the support level (as previously noted) at 1405 which represents the previous support level prior to breaking out. 

So far the pullback is not all that worrisome. Looks to be more of standard profit taking, and I'd expect the market to push higher in the coming days. 

Volume dropped off a bit yesterday and continues to trade at abnormally low levels. 

We've pulled off of overbought market conditions. 

Watch the 10-day moving average today at 1411 - this has represented a regular point for dip buying in the market to occur - just as we saw yesterday. 

It's not uncommon if we consolidate below the 1422  resistance level for a while. You just don't want to see a steep sell-off after touching the 1422 level. 

Strong spike in the VIX pushing it back  up above 15. 

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 1370.

SPX trading above all significant moving averages (10,20,50,200).

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:

Charts:

 

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