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Trading Plan for July 30, 2012

Recs

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July 30, 2012 – Comments (0) | RELATED TICKERS: SPY , IWM , QQQ

Pre-market update (updated 8:30am eastern):

European markets are trading 0.8% higher. 

Asian markets traded between 1.1% higher on average. 

US futures are trading and in mixed fashion with slight weakness. 

Economic reports due out (all times are eastern): Dallas Fed Manufacturing Survey (10:30am)

Technical Outlook (SPX):

Monster rally on Friday from better than expected GDP report, creating an  unexpected higher-high in the market. 

SPX has rallied a 48 points in 2 days which is extremely atypical. Don't be surprised to see some profit taking here over the next day or two. 

Resistance barriers have, including the down-trend off of the 4/2 highs, been broken on Friday. There aren't any major resistance barriers in the near term for the SPX to face. Minor resistance lies around 1402-6. 

Previous uptrend is now flattened out some, now that we have managed to create another higher-high. Current uptrend support lies at 1337. 

If another sell-off were to ensue, watch for a break and close below 1329 for a new lower-low in the market.  

Volume in the broader market continues to increase day-after-day. Volume on Friday was very strong. 

At this point, the goal for the bulls has to be to continue to trade higher and challenge the 1422 highs from 4/2 which are now well within reach. 

Double bottom recently formed in SPX 30-min chart has been confirmed. 

Solid support formed at the 50-day moving average. 

Of concern is the bearish crossover signal found in this week's SharePlanner Reversal Indicator. Caution is warranted. 

VIX is currently trading below 17.

My Opinions & Trades:

Charts:

 

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