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Trading Plan for June 22, 2012

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June 22, 2012 – Comments (0) | RELATED TICKERS: SPY , IWM , QQQ

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

US futures are slightly higher ahead of the open.

European markets are trading -0.6% lower. 

Asian markets are trading -0.9% lower. 

Economic Reports Due out (Times are EST): None

Technical Outlook (SPX):

SPX saw one of its biggest sell-offs of the year yesterday. 

Broke through the 10-day moving average, that had previously acted as reliable support for the market. 

Interestingly, the 100-day moving average has been a tough resistance barrier over the past 3 days. 

50-day moving average was also broken without any fight. 

It's safe to say we are no longer overbought this morning. 

Wednesday and Thursday's volume levels are significantly higher on the SPY than what we saw on Monday and Tuesday when the market was up. 

We broke the upward trend-line in SPX yesterday.

However, that doesn't mean the uptrend is over, but the steepness and acceleration does flatten out, and puts into question where the market bottoms out at. 

A drop below 1306 is what I'm watching for a shift in market sentiment. 

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. 

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 has a confirmed the inverse head and shoulders price pattern in place. 

30-minute chart shows price action pulling back to support and the previous area where significant consolidation occurred. 

VIX back above the pivotal 20 level. 

My Opinions & Trades:

Charts:

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