Trading Plan for July 11, 2012

Pre-market update (updated 8:00am eastern):

• European markets are mixed in trading with a slight bullish edge.
• Asian markets also traded in a mixed/flat manner.  
• US Markets are slightly higher heading into the open. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), International Trade (8:30am),  Wholesale Trade (10am) EIA Petroleum Status Report (10:30am), FOMC Minutes (2pm)

Technical Outlook (SPX):

• SPX pulled back yesterday for the fourth consecutive day. 
• At 1335, bulls need to hold the rising support trend-line off of the 6/4 lows. Failure to do so puts the market in an extended “pullback” mode. 
  • I’m only interested in whether the market can close below this level – intraday breaks carry very little merit. 
• While volume has been light during hte pullback, it has nonetheless increased each of the past three sessions. 
• Tested the 50-day moving average yesterday and bounced off of it. The same cannot be said of the 10-day moving average which previously acted as support. 
• Well off of short-term overbought levels, and further selling would put us close to being short-term oversold. 
• The 1335 rising support level previously mentioned also represents decent price level support too. 
• 30-minute chart conditions similarly mirrors that which is found on the daily. 
• 1374 represents some short-term resistance, and a break & close above that price level would represent another “higher-high” for SPX. 
• SPRI indicator is showing a market that is beginning to enter bullish extremes. No reversal though. 
• An area of concern for the bulls is the fact that the the rally off of the 6/4 lows is forming a bearish wedge. 
• Breaking through the 1390’s will be difficult as there are plenty of separate resistance levels in that area. 
• Below 1306-1308 price level, will nullify the current rally off of the 6/4 lows – would represent a ‘lower-low’ in the market. 
• Interestingly enough, with 4 straight days of selling the vix is still well below 20. 

My Opinions & Trades:

• Will look at possibly adding an additional long position into the afternoon after watching to see if the bulls can hold slight early morning strength. 
• Closed out NXY yesterday at $16.01 for a -2.7% loss. 
• Still long WNR at $20.51, CMG at 378.44, UA at $93.09, HD at $51.50 . 
• Increased my stop-loss in WNR to $22.70 locking in 10.7% in gains and providing plenty of wiggle-room for the stock. 

Charts: