Trading Plan for July 3, 2012

Pre-market upadate (7am eastern):

• European markets are trading 0.4% higher. 
• Asian markets traded 1.0% higher. 
• US Markets are looking at a flat open. 

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Factory Orders (10am), Market closes at 1pm

Technical Outlook (SPX):

• SPX managed to put together a solid ‘follow-through’ day after a huge rally on Friday. 
• SPX has now made new highs on the uptrend that began on 6/4. 
• With the market closing at 1pm today, volume should be light, and somewhat erratic. 
• We’ve moved decisively into short-term overbought
• Resistance should start coming through if the SPX can eventually get into the 1390’s. 
• We’ve broken through and held the 100-day moving average, despite the previous failed attempts . 
• Yesterday provided the market with a new  higher-high. 
  • Strong upward trend in place. 
• Volume in general continues to be relatively light during the past month of trading. 
• 30-minute chart looks like a traditional breakout chart, though overextended in the short-term. 
• Below 1306-1308 price level, will nullify the current rally off of the 6/4 lows. 
  • Would represent a ‘lower-low’ in the market. 
• VIX dropping hard and is now below 17. 

My Opinions & Trades:

• No new trades for me yesterday. 
• I’ll look to add 1-2 new positions to the portfolio today, particularly if we can get some weakness. 
• I don’t see really any strong evidence to be short “right-now”. Don’t short the market right now expecting the market to come to its senses. It could be a long painful wait.  
  • Speaking from experience. 
• Still long WNR at $20.51, CMG (bought on Friday) at 378.44, UA (bought Friday) at $93.09 . 
• Increasing my stop-loss in WNR to $21.44 locking in 4.5% in gains and providing plenty of wiggle-room for the stock. 

Charts: