Trading Plan for July 26, 2012
Pre-market update (updated 8:00am eastern):
European markets are trading over 2.3% higher.
Asian markets traded between 0.1% and 1.2% higher.
US futures are up over 1% going into the open.
Economic reports due out (all times are eastern): Durable Goods Orders (8:30am), Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), Pending Home Sales Index (10am), EIA Natural Gas Report (10:30am), Kansas City Fed Manufacturing Index (11am)
Technical Outlook (SPX):
Despite another attempt to drive the markets lower, SPX managed to rebound and close near break even.
50-day moving average showing solid support over the past two trading sessions.
At this point, SPX hasn't actually put in a 'lower-low' yet, and is therefore still in an uptrend overall.
Because of this, you want to be careful about how bearish you get until there is a legitimate breakdown in the market and not merely a pullback (which is what recent selling is at this point).
30-min SPX chart shows a double top followed by a bear-flag of late.
Double top-formation coming together on SPX that could pose as trouble in the days ahead if confirmed with a close below 1334.
Approaching short-term oversold, but intermediate and longer-term is no-where near such a reading.
Bulls must hold 1325. A close below that level, and you have what would begin a new downtrend.
On 7/18 we managed to break through the descending trend-line off of the 4/2 highs.
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.
VIX pushed back below 20, but remains slightly elevated at this point.
My Opinions & Trades: