Trading Plan for February 28, 2012
Economic Reports Due out (Times are EST): ICSC-Goldman Store Sales (7:45am), Durable Goods Orders (8:30am), Redbook (8:55am), S&P Case-Shiller HPI (9am), Consumer Confidence (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am)
Premarket Update (Updated 8:30am eastern):
US Futures are slightly higher heading into the open.
Asian markets traded between +0.4% and 1.7% higher.
European markets are trading about +0.3% higher.
Technical Outlook (S&P):
Just as predicted yesterday, the bulls bought the dip (doesn't take a genius - trust me) and marched the indices parabolic intraday, and the consolidated into the close. We went from being strong in the red, to being a shade in the green.
10-day moving average was tested again, and provided an opportunity to bounce and push higher.
1370 will be in play for the bulls again today. Yesterday it broke above it twice, only to be met with selling pressures that pushed it underneath the multi-year resistance level.
Yesterday's rally off the lows prevented an evening star pattern.
The last two days the S&P has made new highs in the market, but ironically, the VIX has moved higher as well - a significant bearish divergence.
A major sell-off would put the 20-day moving average in play, which will be much harder to push through than the 10-day MA, and one that hasn't been broken in over two months. 1346 will be the key level for price to push through. Expect support to, at least initially, kick-in.
Volume was stronger when compared to Friday, but still below average.
30-minute chart on the S&P still looks healthy with uptrend still in place.
We've yet to see a sell-off this year that exceeded 1% to the downside.
1370, when looked through the prism of a 15-year chart, represents a very strong price level where markets have historically reversed at.
Price level support lies at 1326 and then again at 1300. A break of the latter in coming days would drastically change market behavior/outlook.