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Trading Plan for June 12, 2012

Recs

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June 12, 2012 – Comments (0) | RELATED TICKERS: SPY , QQQ , IWM

Economic Reports Due out (Times are EST): NFIB Small Business Optimism Index (7:30am), ICSC-Goldman Store Sales (7:45am), Import and Export Prices (8:30am), Redbook (8:55am), Treasury Budget (2pm)

Pre-market Update (Updated 8:30am eastern):

US futures are slightly higher. 

European markets are trading 0.4% higher. 

Asian markets traded on average 0.7% higher. 

Technical Outlook (SPX):

Major sell-off reversal yesterday and finished significantly lower on the day with a huge SPY bearish engulfing pattern. 

Market is coming off of short-term overbought conditions, but just slightly with yesterday's sell-off. 

Broke back below the 20-day moving average but found support at the 10-day MA. 

Bullish wedge breakout still intact

S&P needs to get back above 1334, to change the mood of the market. Much more bullish above that price level. 

Volume remains relatively average. 

The markets in general have pulled back roughly 10% off of its recent highs which is typically considered a "pullback" in the markets. 

The possibility also exists that we are putting in a very short-term inverse head and shoulders pattern on the S&P, in which we would unlikely push past 1334 before pulling back moderately to form the right shoulder. 

Major bottoms or at the least, interim bottoms, tend to make huge gains in the initial days following the bottom. See last October and September 2010. 

Minor support at 1249, 1209 would also represent a level of price support, should we close below 1266 support. . 

30-minute chart has an inverse head and shoulders pattern with a small right shoulder.

VIX is still elevated and rests above 23 - below 20 and the bear's hopes for a break higher is greatly hampered. .

My Opinions & Trades:

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