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Trading Plan for June 14, 2012

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June 14, 2012 – Comments (0) | RELATED TICKERS: DIA , QQQ , SPY

Economic Reports Due out (Times are EST): Consumer Price Index (8:30am), Jobless Claims (8:30am), Current Account (8:30am), EIA Natural Gas Report (10:30am)

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

US futures are flat ahead of the open. 

European markets are trading -0.5% lower. 

Asian markets traded on average -0.6% lower. 

Technical Outlook (SPX):

SPX had the look of breaking out yesterday, but ultimately succumbed to the bears again by selling off into the close. 

5 days of consolidation and counting. So far it has the look of a bull-flag, but very choppy market nonetheless. 

Despite yesterday's sell-off the bulls really haven't given up much in gains. 

1335 is the number the S&P needs to reach and close above to break out of the range bound trading of the last 5 days. A close above 1327 would help that cause as well. 

Sold support remains at the 10-day moving average - testing it 3 out of 4 days. 

Inverse head and shoulders forming over the past month - currently working on the right shoulder.

IH&S pattern very obvious on the 30-minute chart.

Market is coming off of short-term overbought conditions during this consolidation period. 

Chopping above and below the 20-day moving average no true support/resistance there. 

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. 

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. . 

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

My Opinions & Trades:

Charts:

 

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