Trading Plan for May 25, 2012

Economic Reports Due out (Times are EST): Consumer Sentiment (9:55am)

Premarket Update (Updated 8am eastern):

• US futures are mixed/flat ahead of the opening bell.
  
• European markets are trading mixed/flat. 
  
• Asian markets were mixed/flat as well. 
  

Technical Outlook (S&P 500):

• Another intraday recovery in the S&P to finish in the green for the fourth straight day. 
• 10-day moving average continues to act as resistance for the S&P. 
• Steep downtrend off of the 5/1 highs was broken yesterday at the close. Not a game changer, as a downtrend that steep, was bound to be broken sooner than later. 
• Four-day bounce has  pushed the S&P towards short-term overbought. Weekly chart we remain oversold. 
• Volume was notably less yesterday. 
• Nearest level of resistance for the S&P is at 1340 and then again at  1357. 
• 1294-5 becomes the key support level for the bears to push below. After that we have a support area at 1275. 
• VIX is still elevated and rests near 22. 
• 30-minute chart shows some consolidation finally, and the potential for a higher-low. 
• S&P is trading below the 10-day, 20-day and 50-day moving averages.

My Opinions & Trades:

• There is the potential for a shift in market sentiment based on what the bulls can do with yesterday’s reversal. Keeping the momentum up is key. 
• If the bulls can finish higher today, particularly if they can break the week’s highs, we should see some nice momentum develop for next week. 
• Covered SIG at $42.44 from $46.33 for a 8.4% gain. 
• Shorted CPWR at $9.03. 
• Remain short $JCI at $30.29, WCRX at $20.15, ATVI at $12.14.

Chart: