Trading Plan for July 30, 2012
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: