Trading Plan for August 28, 2012

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

• European markets are trading -0.4% lower. 
• Asian markets were mixed in their trading. 
• US futures are flat ahead of the bell. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales, Redbook (8:55am), S&P Case-Shiller HPI, Consumer Confidence (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am)

Technical Outlook (SPX):

• Yesterday’s price action saw the S&P give back a decent amount of gains it held during the day. 
• One could make the argument that the price action since breaking the 1422 highs intraday, has been the result of a bull-flag on the daily. 
• 30-min chart on SPX shows a well established bullish trend over the past month. Action since 8/21 has the potential for a new channel downward possibly forming. 
• If we sell-off again today, watch the 20-day moving average to act as a possible support level for the market, in which bulls try to buy the dip at. 
• Hard bounce for the market on Friday, and in particular the SPY bounced right off of the 20-day moving average and created a HUGE bullish engulfing pattern. 
• 10-day moving average has been rather useless of late, largely going ignored by the indices. 
• Going forward SPX needs to close above 1422 and take out 1426 recent intraday highs.
• Volume remains at ridiculously low levels – Monday was no better. 
• We are well-off of overbought levels – which gives this market plenty of room to run. 
• SharePlanner Reversal Indicator received a bullish confirmation signal. 
• Support above the 1405 level was recaptured on Friday. 
• With Friday’s bounce, the pullback we saw for most of last week should be presumed over at this point and that the a new higher-high should be established. 
• Sharp spike in the VIX yesterday pushing it above 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:

• Busy day on Monday for trading…
• Bought RNDY at $7.86
• Bought RHT at $57.56
• Bought CRM at $145.39
• Sold SASFM at $43.95 from $40.55 for a -0.3% loss. 
• Sold LTD at $51.20 from $47.53 for a -1.3% loss. 
• Both of these longs were considered the bottom dwellers of my portfolio and shed to make room for new positions. 
• Covered BRO at 25.85 from $25.65 for a -0.8% loss. 
• Any new long positions will likely result in me closing out an existing long position. 
• 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. 
• ALXN stop-loss moved up to $100.98
• Remain long FBHS at $24.54, ALXN at $102.53, LXP at $9.21, and AMZN at $233.90. Short HE at $28.45.
• Track my portfolio RealTime here. 

Charts: