Trading Plan for July 10, 2012

Pre-market update (updated 9:00am eastern):

• European markets are 0.7% higher.
• Asian markets sold off an additional -0.4% today. 
• US Markets are slightly higher heading into the open. 

Economic reports due out (all times are eastern): Consumer Credit (3pm) 

Technical Outlook (SPX):

• SPX attempted to sell-off yet again yesterday, but recovered most of its losses before the close. 
• After pulling back for three straight sessions, the market is starting to look ready to try and push higher again. 
• Tested the 10-day moving average yesterday and bounced accordingly. 
• We’ve pulled back nicely off of the short-term overbought conditions in the market. 
• 1374 represents some short-term resistance, and a break & close above that price level would represent another “higher-high” for SPX. 
• 30-minute chart shows a well-deserved pullback. 
• Roughly 1333 represents today’s  rising support level that must be held, which is 24 points away from Friday’s close. 
  • In order for a violation to occur price must close below 1333 – intraday breaks carries little significance.
• 4 out of the last 5, and the last 3 down days as well, have all ended in doji-candles for SPY, showing that the selling has been some what controlled and lacked any real fear from market bulls.
• SPRI indicator is showing a market that is beginning to enter bullish extremes. No reversal though. 
• An area of concern for the bulls is the fact that the the rally off of the 6/4 lows is forming a bearish wedge. 
• Breaking through the 1390’s will be difficult as there are plenty of separate resistance levels in that area. 
• Below 1306-1308 price level, will nullify the current rally off of the 6/4 lows – would represent a ‘lower-low’ in the market. 
• Despite Friday’s sell-off , VIX finished notably in th red. 

My Opinions & Trades:

• For any new long position that I add today, I’ll offset it by closing out a long position. I don’t want to over-expose myself at this point. 
• Bought NXY at $16.46 yesterday. 
• Bought PCYC at $56.00 yesterday. 
• I don’t see really any strong evidence to be short “right-now”. 
• Still long WNR at $20.51, CMG at 378.44, UA at $93.09, HD at $51.50 . 
• Increased my stop-loss in WNR to $22.70 locking in 10.7% in gains and providing plenty of wiggle-room for the stock. 

Charts: