Trading Plan for 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:
- Covered FB yesterday at $28.29 from $28.94 for a 2.3% gain.
- Sold MDT at 37.49 from 38.47 for a -2.6% loss.
- Sold AUTH at $5.19 from $5.02 for a 3.4% gain.
- Added GS yesterday as noted below. .
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