Trading Plan for July 5, 2012

Pre-market upadate (9:00am eastern):

• European markets are trading flat. 
• Asian markets traded mixed/flat.
• US Markets are looking at a slightly negative open.

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), Challenger Job-Cut Report (7:30am), ADP Employment Report (8:15am), Jobless Claims (8:30am), ISM Non-Manufacturing Index (10am), EIA Natural Gas Report (10:30am), 

Technical Outlook (SPX):

• SPX continued to march higher for a third straight day, and five out of the last six. 
  • Beginning to look a bit parabolic, if you ask me. 
• Breaking through the 1390’s will be difficult as there are plenty of separate resistance levels in that area. 
• Safe to assume that volume will be light this week as it was on Monday and Tuesday, as many traders/investors will take the remainder of the week of. 
  • Volume in general continues to be relatively light during the past month of trading.
• SPX is hitting short-term extremes of being overbought. 
• SPX has now made new highs on the uptrend that began on 6/4.
• 30-minute chart continues to highlight the need for a pullback 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:

• Bought NFLX at $70 on Tuesday. 
• Bought HD at $51.50 on Tuesday .
• May add an additional 1-2 positions, as well as close out any non-performers. 
  • If UA continues to struggle, it will be a prime candidate for me to scrap. 
• 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 $22.70 locking in 10.7% in gains and providing plenty of wiggle-room for the stock. 

Charts: