Trading Plan for June 7, 2012

Economic Reports Due out (Times are EST): Jobless Claims (8:30am), Ben Bernanke Speaks (10am), Quarterly Services Survey (10am), EIA Natural Gas Report (10:30am), Consumer Credit (3pm)

Premarket Update (Updated 7:30am eastern):

• US futures are up moderately ahead of the open. 
• European markets are trading 1.3% higher. 
• Asian markets traded on average 1.3% higher. 

Technical Outlook (SPX):

• Huge day for the S&P yesterday as it managed to climb back out of the downward trend-line at 1310 and breakthrough the bullish wedge that had been forming. 
• Next key resistance level for the S&P to break through would be 1335. 
• Market is well off of oversold conditions after yesterday’s bounce. 
• S&P crossed back above the 10-day moving average, and a shade below the 20-day moving average. The latter of the moving averages has been problematic for the bulls to cross above recently. 
• Major bottoms or at the least, interim bottoms, tend to make huge gains in the initials days following the bottom. See last October and September 2010. 
• Minor support at 1249, 1209 would also represent a level of price support, should we close below 1275 support. . 
• 30-minute chart looks to reverse the current downtrend. 
• 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 24.

My Opinions & Trades:

• Don’t be too anxious to re-short this market – let this bounce play itself out. Could very well be forming a bottom, don’t discount the possibility. 
• Risk is elevated for new positions to the short-side. 
• Long PPL at $27.65