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Trading Plan for July 9, 2012

July 09, 2012 – Comments (0) | RELATED TICKERS: SPY , QQQ , DIA

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

European markets are -0.3% lower.

Asian markets took a hard hit finishing -1.4% lower.

US Markets are slightly lower ahead of the opening bell. 

Economic reports due out (all times are eastern): Consumer Credit (3pm) 

Technical Outlook (SPX):

SPX sold off about -1% on Friday, and recovered about 1/3 of its losses off the lows of the day. 

There was not any not notable technical damage done to the SPX from previous two trading sessions.

30-minute chart shows a well-deserved pullback, but the series of higher-highs and higher-lows still in place.

Last two days have helped the market come off of short-term overbought levels. 

Roughly 1330 represents today's  rising support level that must be held, which is 24 points away from Friday's close. 

In order for a violation to occur price must close below 1330 - intraday breaks carries little significance. 

SPY chart shows that the Friday gap down held (which the opposite happens more times than  not)

3 out of the last 4, and the last 2 down days as well, have all ended in doji-candles, showing that the selling has been some what controlled and lacked any real fear from market bulls. 

SPRI indicator is showing a market that is beginning to enter bullish extremes. No reversal though. 

An area of concern for the bulls is the fact that the the rally off of the 6/4 lows is forming a bearish wedge. 

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

Below 1306-1308 price level, will nullify the current rally off of the 6/4 lows - would represent a 'lower-low' in the market. 

Despite Friday's sell-off , VIX finished notably in th red. 

Charts: