Trading Plan for June 5, 2012

Economic Reports Due out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), ISM Non-Manufacturing Index (10am)

Premarket Update (Updated 7:30am eastern):

• US futures are flat are slightly lower prior to the open and well off their overnight highs. 
  
• European markets are trading -0.7% lower. . 
  
• Asian markets traded on average 1.1% higher. 
  

Technical Outlook (SPX):

• Doji hammer formed on the S&P yesterday, after trading downwards of nearly 1% – managed to close ever so slightly in positive territory. 
• Resistance will remain on the underside fo the 200-day moving average going forward. 
• Descending resistance lies at 1314 off of the 5/1 highs. 
• The S&P is now trading below all major moving averages. 
• We are back into oversold territory short-term. We are also oversold on the weekly charts as well. 
• Bullish wedge forming on the daily, that has been little noticed by other traders. We bounced off of the lower end of the wedge at yesterday’s lows. 
• Minor support at 1249, 1209 would also represent a level of price support, should we close below 1275 support. . 
• 30-minute looks overextended to the downside. 
• Nearest level of resistance for the S&P is at 1334 and 1340 and then again at  1357. 
• VIX is still elevated and rests above 26.

My Opinions & Trades:

• Potential exists to play for an upside bounce, but I’d recommend being nimble at doing such. 
• Risk is elevated for new positions to the short-side. 
• Sold ATI yesterday at $29.58 from $29.00 for a 2.0% gain (day-trade).
• Sold DB yesterday at 34.19 from $34.34 fora -0.4% loss (day-trade).
• Previously covered KMX at $27.31 from $28.13 for a 2.9% gain (Friday).
• Previously covered KMI at $32.11 from $32.38 for a 3.8% gain (Friday). 
• Previously covered CNH at $37.02 from $39.85 for a 7.1% gain (Friday). 
• Currently 100% cash.