Trading Plan July 25, 2012
Pre-market update (updated 8:00am eastern):
European markets are trading +0.8% higher.
Asian markets traded over -1.0% lower.
US futures are mixed due to weak AAPL earnings, but S&P trading higher.
Economic reports due out (all times are eastern): MBA Purchase Applications (7am), New Home Sales (10am), EIA Petroleum Report (10:30am)
Technical Outlook (SPX):
SPX sold off for the third straight day and closed below the recent uptrend off of the June lows.
Double top-formation coming together on SPX that could pose as trouble in the days ahead if confirmed with a close below 1334.
Volume continues to trickle higher, which is concerning for the bulls, as it shows escalating fear building in the markets.
Approaching short-term overbought, but intermediate and longer-term is no-where near such a reading.
Bulls must hold 1325. A close below that level, and you have what would begin a new downtrend.
On 7/18 we managed to break through the descending trend-line off of the 4/2 highs (see chart below).
But not this is starting to look like an incredible 'head-fake'.
Watch the SPRI that I posted this past Sunday and how it shows us near-ready for the reversal signal.
Also note the price resistance the SPX is up against on the weekly chart.
The VIX pushed above 20, which typically shows mounting bearishness for the markets.
30-minute chart shows a nice channel uptrend being threatened by today's early morning action.
My Opinions & Trades: