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Trading Plan for July 24, 2012

July 24, 2012 – Comments (0) | RELATED TICKERS: SPY , QQQ , IWM

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

European markets are trading -0.2% lower.

Asian markets traded -0.5% lower. 

US futures are trading slightly lower ahead of the open. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Bernanke Speaks (8:45am), Redbook (8:55am), PMI Manufacturing Index Flash (8:58am), FHFA House Price Index (10am), Richmond Fed Manufacturing Index (10am)

Technical Outlook (SPX):

SPX gaped down significantly yesterday, and below the current uptrend, only to see consistent buying throughout the entire session, and eliminating over half of the day's losses. 

As a result, we are still holding onto the current uptrend but need to hold on to 1343 today to keep it in place. 

Yesterday's trading put us back below the 10-day and 20-day moving averages. Neither of these have been significant S/R levels for the market, but are simply worth noting from a sentiment/direction standpoint. 

Volume remained steady yesterday.

A 'lower-low' would be put in place at a close below 1325, the latter of which would make this market notably bearish. 

Sell-off comes, after a few days being short-term overbought. 

On 7/18 we managed to break through the descending trend-line off of the 4/2 highs (see chart below). 

But not this is starting to look like an incredible 'head-fake'.

Watch the SPRI that I posted this past Sunday and how it shows us near-ready for the reversal signal. 

Also note the price resistance the SPX is up against on the weekly chart. 

The VIX remains under 19. A push back above 20, would increase the bearishness of the market. 

30-minute chart shows a nice channel uptrend being threatened by today's early morning action. 

Charts