Trading Plan for July 27, 2012
Pre-market update (updated 8:30am eastern):
European markets are trading 0.4% higher.
Asian markets traded between 1.7% higher on average.
US futures are moderately higher heading into the open. .
Economic reports due out (all times are eastern): GDP (8:30am), Consumer Sentiment (9:55am)
Technical Outlook (SPX):
Huge day in the markets yesterday for the bulls, erasing the last 2, almost 3 days of weakness.
Rally went all the way up to the resistance off of the downtrend from the 4/2 highs.
A close above 1376, preferably above 1380 would mark a new high in the market and increase the bullishness in this market.
With the recent break of the uptrend/channel that the market had been trading in,
Nice Double bottom formed on the 30-min SPX chart.
While on the daily, you have a double top-formation coming together that could pose as trouble in the days ahead if confirmed with a close below 1334.
50-day moving average showing solid support over the past three 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).
Bulls must hold 1329. A close below that level, and you have what would begin a new downtrend.
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, and remains under 18.
My Opinions & Trades: