Trading Plan for September 20, 2012

Pre-market update (updated 8:30am eastern):

• European markets are trading -0.7% lower. 
• Asian markets finished -1.4% lower on the day. 
• US futures are trading moderately lower ahead of the bell.

Economic reports due out (all times are eastern): Jobless Claims (8:30am),  Jobless Claims (8:30am), PMI Manufacturing Index Flash (8:58am), Philadelphia Fed Survey (10am), Leading Indicators (10am), EIA Natural Gas Report (10am)

Technical Outlook (SPX):

• Yesterday offered the market some nice consolidation, and the possibility of forming another bull-flag on the daily SPX chart. 
• With the 7-8 point gap down in SPX, these gap downs tend to be difficult for the bears to capitalize on, and instead, what you see is the bulls, often times, buy the weakness after the first hour of trading. 
• We could see some increased selling if we were to drop below Tuesday’s lows at 1456. 
• Volume dropped further yesterday, which is not uncommon during pullbacks or consolidation periods in the market. 
• The pullback that has occurred so far this week, has allowed the market to come off of oversold levels as well. 
• No signs of panic in this market during the recent pullback. 
• On the 30-minute chart – its a  tale of two charts: either we are forming a bull flag or just formed a lower-high. 
• Fed’s QE3 launch is going to add a lot of buying power to this market and drive more people out of interest-bearing assets and into equities in search of some kind of return. 
• Going back years, there really is little in the way of resistance for the markets until it tests 1500.
• Resistance at 1437 and 1440 was broken with little problem and now becomes support. 
• Upward trend-line off of the 6/4 lows has rising support at 1406. 
• SharePlanner Reversal Indicator confirmed the move higher this past week. 
• VIX dropped below 14. 
• One area of concern is the 3 large gaps off of the 6/4 lows that remain unfilled, including 6/6, 7/26, 8/3
• If another sell-off were to ensue, watch for a break and close below 1396 for a new lower-low in the market.  

My Opinions & Trades:

• Sold 1/2 of GTAT position at $7.01 from $6.73 for a 4.2% gain. 
• Bought PNR at $43.85. 
• Bought IACI at $52.59. 
• Current stop-losses have been adjusted across the board. 
• ALXN stop-loss moved up to $110.00
• Stop-loss for NLSN at $29.30.
• Stop-Loss for WYNN increased to $111.50.
• Stop-Loss for BEAV adjusted to $40.90. 
• Stop-loss for GTAT adjusted to $6.67. 
• Remain long SHLD at $61.10, GTAT at $6.73 (1/2), BEAV at $40.75, WYNN at $107.47, NLSN at $28.70, and ALXN at $102.53
• Track my portfolio RealTime here. 

Charts: