Trading Plan for January 11, 2011
Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am), Beige Book (2pm)
Premarket Update (Updated 9am eastern):
Futures are slightly down
Asian markets were up about 0.5%
Europe is the exact opposite down about 0.5% as a whole.
Technical Outlook (S&P):
The S&P clearly separated itself from a myriad of previous resistance levels with yesterday's breakout-like move.
The downtrend formed off of the 5/2/11 highs would represent the next level of resistance which is currently at 1314.
Index charts are overbought, and look poised for a correction in the coming days.
Volume was slightly better, but still weak. On charts like SPY, the volume is anemic.
The bulls could not break through the S&P October highs and close there, instead it closed just slightly below.
If price sells off hard and goes down to 1252, it would put price back inside of the Downward trend-line off of the 7/7 highs.
On the 30 min chart, we could be seeing the early stages of a bull-flag or a potential multi-day move to fill yesterday's gap up.
There are still 3 gaps since late November that have yet to be filled, counting yesterday's gap higher as well.