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Trading Plan for July 13, 2012

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July 13, 2012 – Comments (0) | RELATED TICKERS: SPY , QQQ , IWM

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

European markets are trading 0.9% higher. 

Asian markets traded in a mixed/flat manner.  

US Markets are slightly higher heading into the open. 

Economic reports due out (all times are eastern): Producer Price Index (8:30am), Consumer Sentiment (9:55am)

Technical Outlook (SPX):

The S&P finished the day well off the lows of yesterday's action and finished right on the trend-line that began off of the 6/4 lows. 

Bounce here or the market goes into a more extended pullback mode. 

We've sold off for the sixth straight day - which is a pretty hard thing to do without a single day in the green. But the selling has not been by no means "panicky". Just compare, the last time we sold off 6 straight days, was in May, and we dropped 62 points on the S&P. This sell-off has resulted in only a 40 point sell-off. 

Also very interesting during this 6-day sell-off is the fact that the VIX is still under 20 at 18.32. 

30-minute chart shows a nice downward channel that has now been established. 

Over the last 6-days of selling there has only been one day, where we haven't seen the dip buyers step in intraday. 

SPX closed just a shade above the 50-day moving average. 

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. 

My Opinions & Trades:

Charts:

 

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