Trading Plan for August 24, 2012

Pre-market update (updated 8:30am eastern):

• European markets are trading -0.4% lower. 
• Asian markets were -1.2% lower 
• US futures are slightly lower ahead of the opening bell. 

Economic reports due out (all times are eastern): Durable Goods Orders (8:30am)

Technical Outlook (SPX):

• Yesterday’s sell-off took us below the 10-day moving average for the first time since 7/25. 
• 20-day moving average is in play, and hasn’t been broken since the same time frame. Look for a test today at 1400. 
• This recent 4-day sell-off has us approaching short-term oversold. 
• A major sell-off today (about 30 points) would take us to the current upward trend line and 50-day moving average. Unlikely that happens, but it’s still good to note this on the chart. 
• Volume remained low. 
• Support at the recent breakout from previous consolidation level (1405) was broken yesterday. 
• The pullback so far is not that worrisome from a bullish perspective, though it is lasting longer than I expected, which will temper expectations in the short-term for me. 
• When we tested the 10-day moving average yesterday, unlike previous opportunities, bulls showed no desire to buy the dip. 
• It’s not uncommon if we consolidate below the 1422  resistance level for a while. You just don’t want to see a steep sell-off after touching the 1422 level. 
• Nice bounce in the VIX has the market just a shade below 16
• 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 1354 for a new lower-low in the market.  

My Opinions & Trades:

• No new trades yesterday. 
• Closed ADSK at $35.73 from 35.23 for a 1.4% gain. 
• Out of WOOF at $18.72 from $19.01 for a -1.5% loss. 
• Current stop-losses have been adjusted across the board. 
• Stop-loss in AMZN moved up to $237.90.
• HE Short stop-loss has been has been tightened to 27.40. 
• BRO Short stop-loss has been has been tightened to 25.85.
• Remain long SAFM at $40.55, ALXN at $102.53, LXP at $9.21, and AMZN at $233.90. Short BRO at $25.65, HE at $28.45.
• Track my portfolio RealTime here. 

Charts: