Trading Plan for September 10, 2012
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: