Trading Plan for June 15, 2012

Economic Reports Due out (Times are EST): Empire State Manufacturing Survey (8:30am), Treasury International Capital (9am), Industrial Production (9:15am), Consumer Sentiment (9:55am)

Pre-market Update (Updated 8:30am eastern):

• US futures are slightly higher ahead of the open. 
• European markets are trading 1.2% higher. 
• Asian markets traded on average -0.6% lower. 

Technical Outlook (SPX):

• Solid day for the bulls yesterday, as price action is finally starting to move out of the 5-day consolidation range. 
• To spur on the bulls to additional buying, there needs to be a close above 1334
• Today is options expiration so there is an increased likelihood of volatility in the market (as if we don’t have enough already). 
• 50-day moving average could create headwinds for SPX at 1347. 
• Continue to follow SPX’s 10-day moving average for short-term support in this market. 
• Inverse head and shoulders forming over the past month – currently working on the right shoulder – could see confirmation today. 
• IH&S pattern very obvious on the 30-minute chart.
• SPX is no longer overbought. 
• Volume remains relatively average. 
• The markets in general have pulled back roughly 10% off of its recent highs which is typically considered a “pullback” in the markets. 
• A break below 1306 would represent a resumption of the downward trend. 
• VIX is still elevated and rests above 21 – below 20 and the bear’s hopes for a break lower is greatly hampered. However, it did take a pretty solid hit yesterday. 

My Opinions & Trades:

• I am looking to add more long positions to the portfolio going into today’s open. Conditions are becoming more favorable. 
• Careful about trading in and out of this market too much – I’m playing with my original stop-losses which is usually 3-4% off of the entry price and gives me enough wiggle room to weather the choppiness of this market day-to-day. 
• Day-traded SDS yesterday and sold at $16.51 from $16.58 for a -0.4% loss. 
• Bought PCYC at $40.66 yesterday. 
• Currently Long PPL at $27.65.

Charts: