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Trading Plan for July 11, 2012

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July 11, 2012 – Comments (0) | RELATED TICKERS: DIA , QQQ , SPY

Pre-market update (updated 8:00am eastern):

European markets are mixed in trading with a slight bullish edge.

Asian markets also traded in a mixed/flat manner.  

US Markets are slightly higher heading into the open. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), International Trade (8:30am),  Wholesale Trade (10am) EIA Petroleum Status Report (10:30am), FOMC Minutes (2pm)

Technical Outlook (SPX):

SPX pulled back yesterday for the fourth consecutive day. 

At 1335, bulls need to hold the rising support trend-line off of the 6/4 lows. Failure to do so puts the market in an extended "pullback" mode. 

I'm only interested in whether the market can close below this level - intraday breaks carry very little merit. 

While volume has been light during hte pullback, it has nonetheless increased each of the past three sessions. 

Tested the 50-day moving average yesterday and bounced off of it. The same cannot be said of the 10-day moving average which previously acted as support. 

Well off of short-term overbought levels, and further selling would put us close to being short-term oversold. 

The 1335 rising support level previously mentioned also represents decent price level support too. 

30-minute chart conditions similarly mirrors that which is found on the daily. 

1374 represents some short-term resistance, and a break & close above that price level would represent another "higher-high" for SPX. 

SPRI indicator is showing a market that is beginning to enter bullish extremes. No reversal though. 

An area of concern for the bulls is the fact that the the rally off of the 6/4 lows is forming a bearish wedge. 

Breaking through the 1390's will be difficult as there are plenty of separate resistance levels in that area. 

Below 1306-1308 price level, will nullify the current rally off of the 6/4 lows - would represent a 'lower-low' in the market. 

Interestingly enough, with 4 straight days of selling the vix is still well below 20. 

My Opinions & Trades:

Charts:

 

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