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Trading Plan for July 6, 2012

Recs

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July 06, 2012 – Comments (0) | RELATED TICKERS: QQQ , SPY , IWM

Pre-market upadate (updated 9:00am eastern):

European markets are -0.8% lower.

Asian markets traded -0.4% lower.

US Markets are nearly 1% lower ahead of the opening bell. 

Economic reports due out (all times are eastern): Employment Situation (8:30am), EIA Natural Gas Report (10:30am) 

Technical Outlook (SPX):

Yesterday's pullback was light, and without any sense of panic to it. 

Today's market is trading lower off of a disappointing payroll number. 

There is plenty of 'wiggle-room' without causing much damage on the charts

As long as 1327 is held the existing upward trend-line remains in-tact. 

Some weakness here is not surprising, considering the extent of which the market  has moved over the past six trading days (on average more than 10 points per day). 

If today's weakness holds, the SPX should come off of the overbought levels that it has been experiencing. 

Gap downs in the market, like we are seeing today, are often hard to maintain, and usually attracts dip-buyers. Be very cautious and don't get overly excited about the early morning action in the markets.

This isn't the time to add new short positions - you do that on bounces. 

Breaking through the 1390's will be difficult as there are plenty of separate resistance levels in that area. 

Safe to assume that volume will be light this week as it was on Monday and Tuesday, as many traders/investors will take the remainder of the week off. 

Volume in general continues to be relatively light during the past month of trading.

SPX has now made new highs on the uptrend that began on 6/4.

30-minute chart continues to highlight the need for a pullback in the short-term.

Below 1306-1308 price level, will nullify the current rally off of the 6/4 lows. 

Would represent a 'lower-low' in the market. 

VIX dropping hard and is now below 18.

My Opinions & Trades:

Charts:

 

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