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Trading Plan for August 24, 2012

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August 24, 2012 – Comments (0) | RELATED TICKERS: SPY , DIA , QQQ

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

European markets are trading -0.4% lower. 

Asian markets were -1.2% lower 

US futures are slightly lower ahead of the opening bell. 

Economic reports due out (all times are eastern): Durable Goods Orders (8:30am)

Technical Outlook (SPX):

Yesterday's sell-off took us below the 10-day moving average for the first time since 7/25. 

20-day moving average is in play, and hasn't been broken since the same time frame. Look for a test today at 1400. 

This recent 4-day sell-off has us approaching short-term oversold. 

A major sell-off today (about 30 points) would take us to the current upward trend line and 50-day moving average. Unlikely that happens, but it's still good to note this on the chart. 

Volume remained low. 

Support at the recent breakout from previous consolidation level (1405) was broken yesterday. 

The pullback so far is not that worrisome from a bullish perspective, though it is lasting longer than I expected, which will temper expectations in the short-term for me. 

When we tested the 10-day moving average yesterday, unlike previous opportunities, bulls showed no desire to buy the dip. 

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. 

Nice bounce in the VIX has the market just a shade below 16

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

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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