Trading Plan for February 7, 2012
Economic Reports Due out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Bernanke Speaks (10am), Consumer Credit (3pm)
Premarket Update (Updated 9am eastern):
US Futures are slightly lower heading into the open.
Asian markets were mixed in trading.
European markets are down ranging from -0.5% down to -0.9%.
Technical Outlook (S&P):
Yesterday was a good day of consolidation for the markets, forming a doji-dragonfly candle at the close.
This was similar price action to what we saw during the 1/26-1/31 pullback. A few more days of similar action would be helpful to cool off the markets some.
It is key for the S&P to hold on to 1331, as it represents the previous multi-year resistance level (now support).
Volume was notably lighter yesterday on the market weakness.
Trend-line support is at 1295 off of the 11/28 lows.
The S&P, as well as other indices (particularly the Russell), have gone completely parabolic in their price action of late.
We remained as overbought as ever, which eventually has to be reconciled.