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Trading Plan for June 21, 2012

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June 21, 2012 – Comments (0) | RELATED TICKERS: DIA , QQQ , SPY

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

US futures are slightly down ahead of the open.

European markets are trading mixed/flat. 

Asian markets traded in a wide range from -1.3% up to +0.9%

Economic Reports Due out (Times are EST): Jobless Claims (8:30am), PMI Manufacturing Index Flash (8:58am), Existing Home Sales (10am), Philadelphia Fed Survey (10am), FHFA House Price Index (10am), Leading Indicators (10am), EIA Natural Gas Report (10:30am)

Technical Outlook (SPX):

SPX finally had a pullback yesterday that was done in a controlled and mild manner. 

Uptrend still remains in place.  

We could see a pullback to 1340 today without affecting the the uptrend currently in place. 

Market remains short-term overbought, and tends to remain in that area for weeks and months if the

SPX's uptrend is indeed legit. 

50-day moving average yesterday ended up being the zone for the market's bounce off lows. 

1360 resistance will be in play again today. 

After that resistance level is cleared, then our next resistance level hovers at 1401 - represents the slightly descending resistance level off of the 4/2/12 highs.

The FOMC Statement became a non-news event. 

The move off of the June 4th lows is very similar to the bullishness that we saw in October of last year and September 2010. 

Also important is the angle of the 10-day moving average, when it turns suddenly steeper in slope like it has over the past four trading sessions, it can be a good indication that the market is ready to rally for an extended period of time. 

By steep I mean by more than 45 degrees. Refer to price action from late December 2011 and January 2012. 

There is now an established uptrend in place on SPX off of the 6/4 lows with consecutive higher-highs and higher-lows now (two of each). 

SPX confirmed the inverse head and shoulders pattern last Friday. 

Of late, respectable support lies at the 10-day moving average. 

Has touched it multiple times in the past 2 weeks and held each time. 

30-minute chart showing a solid uptrend is in place. 

A break below 1306 would represent a resumption of the downward trend. 

VIX, despite yesterday's sell-off, continued to drop all the way down to 17. 

My Opinions & Trades:

Charts:

 

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