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Trading Plan for August 28, 2012

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August 28, 2012 – Comments (0) | RELATED TICKERS: SPY , DIA , IWM

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

European markets are trading -0.4% lower. 

Asian markets were mixed in their trading. 

US futures are flat ahead of the bell. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales, Redbook (8:55am), S&P Case-Shiller HPI, Consumer Confidence (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am)

Technical Outlook (SPX):

Yesterday's price action saw the S&P give back a decent amount of gains it held during the day. 

One could make the argument that the price action since breaking the 1422 highs intraday, has been the result of a bull-flag on the daily. 

30-min chart on SPX shows a well established bullish trend over the past month. Action since 8/21 has the potential for a new channel downward possibly forming. 

If we sell-off again today, watch the 20-day moving average to act as a possible support level for the market, in which bulls try to buy the dip at. 

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. 

10-day moving average has been rather useless of late, largely going ignored by the indices. 

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

Volume remains at ridiculously low levels - Monday was no better. 

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. 

Sharp spike in the VIX yesterday pushing it above 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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