Trading Plan for March 14, 2012

Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), Current Account (8:30am), Import and Export Prices (8:30am), Bernanke Speaks (9am), EIA Petroleum Status Report (10:30am)

Premarket Update (Updated 8:30am eastern):

• US Futures are looking at a flat open to start things off. 
  
• Asian markets saw mixed returns from -0.2% up +1.5%.
  
• European markets are up on average 0.8% right now. 
  

Technical Outlook (S&P):

• The S&P had one of its best days of the year, with the S&P finishing over 24 points higher. 
• Volume was notably stronger, and above recent averages. 
• The final hour of trading yesterday was one of its most dynamic in recent memory, ripping 15 points higher off of JPM dividend increase news. 
• Bank stress tests were released yesterday early and after the bell – 15 out of 19 passed. 
• Short-term the market is well back in the overbought territory. 
• Price-level resistance can be found at 1428, and of course psychologically 1400 will be a test for the bulls as most milestone figures are. 
• The bearish wedge forming in the S&P was train-wrecked yesterday as price blasted through resistance. 
• Nearest support level for the S&P lies around 1354 – nothing really nearby. 

My Opinions:

• Looking back at recent history, when we got these major breakout rallies to new highs, we’ve seen at least 1-2 weeks consolidation – which wouldn’t surprise me (wouldn’t surprise me either if we ripped to infinity and beyond at this point) considering how far removed we are from any significant support levels. 
• Bearish arguements for a market pullback got all anihilated yesterday with the cosmic rally that took place. 
• The market tends to rally on strength in the Euro, but when the Euro is selling off, the market has ignored the action. 

Chart: