Trading Plan for April 26 2012

Economic Reports Due out (Times are EST): Jobless Claims (8:30am), Chicago Fed National Activity Index (8:30am), Pending Home Sales (10am), EIA Natural Gas Report (10:30am), Kansas City Fed Manufacturing Index (11am)

Premarket Update (Updated 9:00am eastern):

• US futures are showing a slight amount of weakness ahead of the bell. 
  
• Asian markets traded 0.4% higher.
  
• European markets are trading in a mixed/flat manner.
  

Technical Outlook (S&P):

• Yesterday’s rally came close to wiping out the bearish tune the market had been singing. 
• 1392 was the key mark for the bulls to get passed, but couldn’t do it. As a result the S&P is range bound between 1392 and 1357. 
• Within this range the market is essentially a boat without its sails. 
• Established direction will come when the  S&P can break below 1357 (bearish) or above 1391 (bullish).
• The 10, 20, and 50-day moving averages were reclaimed by the bulls. 
• Break 1357, the next price level of support is 1340. Break 1392 and it becomes 1401. 
• A lot of talk about the ominous head and shoulders pattern on the S&P since mid-February. We are currently forming the right shoulder. 
• The previous trend-line off of the October lows has become resistance for price action on the underside. 
• On the weekly chart, we confirmed the bearish wedge pattern that we had been following for weeks. Very bearish development for the market. 
• We now only have 1 gap remaining from 3/6 to be filled, not counting the huge gap from yesterday. 

My Opinions:

• Range bound market leaves me without any significant leanings. I’ll still trade lightly within this range, but will wait for the range bound market to either breakout or breakdown before piling on new positions. 
• I sold GOOG at $608.71 from $692 for a 2.8% gain. 
• I am still holding short RL from $168.21
• I am neutral on this market until we break out of its range. 

Chart: