Trading Plan for February 8, 2012
Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am)
Premarket Update (Updated 9am eastern):
US Futures are slightly higher heading into the open.
Asian markets averaged about 1.25% in gains.
European markets are up about 0.4% overall
Technical Outlook (S&P):
Yesterday provided the markets a nice opportunity to stop and smell the roses some. More of these kinds of days, over the next week, would be ideal for the market, allowing it to work off overbought conditions.
Any major rally at this point will all us to challenge the 5/2 Bin Laden Recovery highs at 1370.
Volume was on par with what we've seen over the past few days.
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). Yesterday the S&P saw lows of 1335.
Trend-line support is at 1295 off of the 11/28 lows.
We remained as overbought as ever, which eventually has to be reconciled.