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Trading Plan for September 10, 2012

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September 10, 2012 – Comments (0) | RELATED TICKERS: SPY , IWM , QQQ

Pre-market update (updated 8:30am eastern):

European markets are trading flat. 

Asian markets finished flat/mixed. 

US futures are trading slightly lower ahead of the bell. 

Economic reports due out (all times are eastern): Consumer Credit (3pm)

Technical Outlook (SPX):

SPX continues to throttle higher, making new recovery highs, and the highest in four-years. 

Test at 1440 resistance is in play today. While there isn't a lot of resistance overhead, this is a minor resistance level worth noting. 

The 10-day moving average is back above the 20-day moving average. 

The two day move that we've seen in the markets, and in particular SPX, is a bit extreme, and doubtful we see much more upside until some profit-taking occurs. 

2 Trading Sessions = 34 points on SPX

When you get a huge breakout like what you saw on Thursday and Friday last week, the momentum tends to last no more than 3 days. At that point, you're inevitably going to see a pullback - this is normal, and not necessarily a 'bad-thing'. 

Volume over the past week of trading has been better than the levels we'd been accustomed to over the past few weeks prior. 

Short-term, the SPX is getting near the overbought levels again. 

FOMC Statement occurs on an unusual Thursday at 12:30pm est (typically Tuesday or Wednesday). 

Long-term uptrend support off of the 6/4 lows now shows support at 1394.

30-min chart shows a strong breakout underway. 

VIX dropped hard and is back below 15. 

One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3

If another sell-off were to ensue, watch for a break and close below 1396 for a new lower-low in the market.  

My Opinions & Trades:

Charts:

 

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