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Trading Plan June 19, 2012

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June 19, 2012 – Comments (0) | RELATED TICKERS: SPY , IWM , QQQ

Economic Reports Due out (Times are EST): FOMC Meeting Begins, ICSC-Goldman Store Sales (7:45am), Housing Starts (8:30am), Redbook (8:55am)

Pre-market Update (Updated 8:00am eastern):

US futures are slightly higher.

European markets are trading 0.5% higher. 

Asian markets traded on average -0.4% lower.

Technical Outlook (SPX):

Yesterday provided us with sideways price action, with a slight bullish tilt to it. 

50-day moving average stopped any hopes of a rally - and will be key resistance for today.

1346 represents where the moving average will be at today, and where the S&P will need to break through. Today's slight strength ahead of the bell could see an open above that price level. 

We are right back in overbought territory, but the thing is, if the market is indeed on a strong run, it can stay in this area, for quite a while. 

A healthy sign for the market is that we are just below the upper-band of the Bollinger Bands (not out side of it) and riding the upper band nicely higher now. 

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

FOMC Statement to be issued tomorrow, which could stir up  market rumors of QE3 (though I doubt it).

Quite a ways from current price, but ultimately, if the price can clear 1401 we'll have a market that is very bullish. 

Represents the slightly descending resistance level off of the 4/2/12 highs. 

SPX confirmed the inverse head and shoulders pattern on Friday. 

Of late, respectable support lies at the 10-day moving average. 

Has touched it multiple times in the past 2 weeks and held each time. 

IH&S pattern very obvious on the 30-minute chart.

Confirmed on Friday.

Volume remains relatively average. 

The markets in general have pulled back roughly 10% off of its recent highs which is typically considered a "pullback" in the markets. 

Measured by recent highs to its most recent lows. 

A break below 1306 would represent a resumption of the downward trend. 

The VIX had one of its worst days in a long long time - dropping over 13% and pushing it back below 20 at 18.32. This is a very bullish sign for the market, as fear is starting to leave the markets. 

My Opinions & Trades:

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