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Trading Plan for August 29, 2012

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August 29, 2012 – Comments (0) | RELATED TICKERS: SPY , QQQ , IWM

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

European markets are trading mixed/flat. 

Asian markets finished 0.3% higher. 

US futures are slightly higher ahead of the bell. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), GDP (8:30am), Corporate Profits (8:30am), Pending Home Sales Index (10am), EIA Petroleum Status Report (10:30am), Beige Book (2pm)

Technical Outlook (SPX):

Another day of consolidation for the markets, like we've seen over the past few days. 

No apparent strong-handedness by the bears despite the opportunity being there for the taking. 

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. 

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. 

VIX continues to climb - up 6 out of the last 7 days and at +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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