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Trading Plan for June 26, 2012

June 26, 2012 – Comments (0) | RELATED TICKERS: SPY , QQQ , IWM

Pre-market Update (Updated 9:00am eastern):

US futures are slightly higher ahead of the open. 

European markets are trading mixed/flat.

Asian markets are traded in a wide range from -0.8% up to +0.5%.

Economic Reports Due out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), S&P Case-Shiller HPI (9am), Consumer Confidence (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am)

Technical Outlook (SPX):

Another hard sell-off in SPX is putting in doubt the recent sustainability of the market rally. 

We are close to testing 1306, which is critical support. A break of this price level would officially resume the downward trend off of the 4/2 highs. 

Neckline of the inverse head and shoulders failed to hold support on Monday.

The market is short-term oversold. 

Weakness in SPX took us back below the 10-day and 20-day moving averages. 

Neckline of the inverse head and shoulders failed to hold support on Monday.

Weekly chart is showing a shooting-star pattern last week, followed by weakness to begin this week

Very traditional bearish pattern. 

In order to resume the rally that started off of the 6/4 lows, bulls need to drive price back above 1360. 

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

Below 1306 ends this uptrend. 

30-minute chart shows an extreme sell-off that puts it in bounce territory. 

Strong rally in the VIX yesterday puts it back above 20. 

My Opinions & Trades:

Charts: