Trading Plan for December 16, 2011
Economic Reports Due out (Times are EST): Consumer Price Index (8:30am)
Futures showing moderate strength heading into the open (2:30am).
Asian markets were mixed in trading with Hang Seng leading the way at 1.4%
Europe, as of this writing had not opened yet.
Technical Outlook (S&P):
The bounce the market was experiencing early on quickly faded at the open, and finished with only a fraction of the day's potential gains.
1225 on the 30 min chart, represents strong resistance.
Nearest support for the S&P lies at 1209, but after that it comes in at 1185.
We are oversold, particularly commodities, in the short-term. I'd look for a dead cat bounce here soon before resuming the downward trend.
Volume tapered off a bit from where we were at the last two days.
Intraday we traded temporarily above the 20-day and 50-day moving averages before selling off hard.
Watch the VIX - it's not on board with this sell-off at all.
Trend-line off of the 7/7 highs, just above the 200-day MA on the S&P, continues to act as resistance to price as well.
Note the larger downward channel that we are in as noted below.