Trading Plan for July 30, 2012

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

• European markets are trading 0.8% higher. 
• Asian markets traded between 1.1% higher on average. 
• US futures are trading and in mixed fashion with slight weakness. 

Economic reports due out (all times are eastern): Dallas Fed Manufacturing Survey (10:30am)

Technical Outlook (SPX):

• Monster rally on Friday from better than expected GDP report, creating an  unexpected higher-high in the market. 
• SPX has rallied a 48 points in 2 days which is extremely atypical. Don’t be surprised to see some profit taking here over the next day or two. 
• Resistance barriers have, including the down-trend off of the 4/2 highs, been broken on Friday. There aren’t any major resistance barriers in the near term for the SPX to face. Minor resistance lies around 1402-6. 
• Previous uptrend is now flattened out some, now that we have managed to create another higher-high. Current uptrend support lies at 1337. 
• If another sell-off were to ensue, watch for a break and close below 1329 for a new lower-low in the market.  
• Volume in the broader market continues to increase day-after-day. Volume on Friday was very strong. 
• At this point, the goal for the bulls has to be to continue to trade higher and challenge the 1422 highs from 4/2 which are now well within reach. 
• Double bottom recently formed in SPX 30-min chart has been confirmed. 
• Solid support formed at the 50-day moving average. 
• Of concern is the bearish crossover signal found in this week’s SharePlanner Reversal Indicator. Caution is warranted. 
• VIX is currently trading below 17.

My Opinions & Trades:

• Closed out of MWV at $28.72 from $28.50 for a -0.8% loss. 
• Long MDT at $38.15. 
• Long WTW at $51.10
• Remain long HES $45.60. 

Charts: