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Trading Plan for August 27, 2012

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August 27, 2012 – Comments (0) | RELATED TICKERS: DIA , QQQ , SPY

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

European markets are trading 0.6% higher. 

Asian markets were mixed in their trading. 

US futures are slightly higher ahead of the bell. 

Economic reports due out (all times are eastern): Dallas Fed Manufacturing Survey (10:30am)

Technical Outlook (SPX):

Hard bounce for the market on Friday, and in particular the SPY bounced right off of the 20-day moving average and created a HUGE bullish engulfing pattern. 

Also managed to reclaim the 10-day moving average. 

Going forward SPX needs to close above 1422 and take out 1426 recent intraday highs.

Volume remains at ridiculously low levels - even more so on Friday. 

We are well-off of overbought levels - which gives this market plenty of room to run. 

SharePlanner Reversal Indicator received a bullish confirmation signal. 

Support above the 1405 level was recaptured on Friday. 

With Friday's bounce, the pullback we saw for most of last week should be presumed over at this point and that the a new higher-high should be established. 

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

VIX is currently sitting at 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

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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