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Trading Plan for March 1, 2012

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March 01, 2012 – Comments (0) | RELATED TICKERS: SPY , DIA , QQQ

Economic Reports Due out (Times are EST): Jobless Claims (8:30am), Personal Income and Outlays (8:30am), Bloomberg Consumer Comfort Index (9:45am), ISM Manufacturing Index (10am), Construction Spending (10am), Bernanke speaks (10am), EIA Natural Gas Report (10:30am), 

Premarket Update (Updated 8:30am eastern):

US Futures are slightly up after recovering from overnight losses since the European open.

Asian markets saw losses range from -0.2% down to -1.4%. 

European markets are trading about +0.8% higher. 

Technical Outlook (S&P):

The first day of the trading month, each of the last two months have seen gains of more than 1%. 

Yesterday's "sell-off" did little to impact the markets. S&P still trading comfortably above its 10-day moving average and all existing upward trend-lines are still intact. 

We saw the largest volume level this year, by a large margin, yesterday. 

Price action yesterday gave us a bearish engulfing pattern on SPY. Bearish candle patterns have done little in the way of providing realistic downside forecasts so far this year. 

10-day moving average is in play today at 1361. The 20-day MA could be as well on any descent selling at 1355. 

Bulls will want to get the market back over 1370 again and close above it. 

Divergence in VIX as it is showing relative strength against the S&P making new highs of late (inversely correlated)

30-minute chart on the S&P still looks healthy with uptrend still in place. 

We've yet to see a sell-off this year that exceeded 1% to the downside. 

1370, when looked through the prism of a 15-year chart, represents a very strong price level where markets have historically reversed at. 

Price level support lies at 1326 and then again at 1300. A break of the latter in coming weeks would drastically change market behavior/outlook. 

My Opinions:

Chart:

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