Trading Plan for July 13, 2012

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

• European markets are trading 0.9% higher. 
• Asian markets traded in a mixed/flat manner.  
• US Markets are slightly higher heading into the open. 

Economic reports due out (all times are eastern): Producer Price Index (8:30am), Consumer Sentiment (9:55am)

Technical Outlook (SPX):

• The S&P finished the day well off the lows of yesterday’s action and finished right on the trend-line that began off of the 6/4 lows. 
• Bounce here or the market goes into a more extended pullback mode. 
• We’ve sold off for the sixth straight day – which is a pretty hard thing to do without a single day in the green. But the selling has not been by no means “panicky”. Just compare, the last time we sold off 6 straight days, was in May, and we dropped 62 points on the S&P. This sell-off has resulted in only a 40 point sell-off. 
• Also very interesting during this 6-day sell-off is the fact that the VIX is still under 20 at 18.32. 
• 30-minute chart shows a nice downward channel that has now been established. 
• Over the last 6-days of selling there has only been one day, where we haven’t seen the dip buyers step in intraday. 
• SPX closed just a shade above the 50-day moving average. 
• 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. 

My Opinions & Trades:

• Sold out of WNR at $23.15 from 20.51 for a 12.9% gain. 
• Sold out of UA (Wednesday) at $45.48 from $46.55 for a -2.3% loss. 
• Sold out of PCYC (Wednesday) at $56.28 from $56.00 for a 0.5% gain. 
• Bought AGU at $89.66 (Wednesday)
• Bought NFLX at $82.76 (Wednesday)
• Bought TPC at $12.43 yesterday. 
• Will look at possibly adding an additional long position if this market acts ready to bounce today. 
• Still long CMG at 378.44, HD at $51.50 . 

Charts: