Trading Plan for June 25, 2012

Pre-market Update (Updated 9:00am eastern):

• US futures are down almost -1% ahead of the open. 
• European markets are trading -1.1% lower. 
• Asian markets are traded -0.6% lower. 

Economic Reports Due out (Times are EST): Chicago Fed national Activity Index (8:30am), New Home Sales (10am), Dallas Fed Manufacturing Survey (10:30am)

Technical Outlook (SPX):

• SPX manage to pair some of its losses with a descent bounce on Friday. 
• Found support at the previous inverse head and shoulders breakout level of 1324. 
  • If we fail to hold this level, a likely test comes again of 1306. 
• The 10-day moving average was reclaimed on Friday. 
  • The 100-day moving average has been a tough resistance barrier for the market of late. 
• In order to resume the rally that started off of the 6/4 lows, bulls need to drive price back above 1360. 
• Market is nearing oversold levels in the short-term. One or two more good sell-offs should do it. 
• There is an established uptrend in place on SPX off of the 6/4 lows with consecutive higher-highs and higher-lows now (two of each). 
• SPX has a confirmed the inverse head and shoulders price pattern in place. 
• 30-minute chart shows price action pulling back to support and the previous area where significant consolidation occurred. 
• VIX at 18 and below the bearish mark of 20.

My Opinions & Trades:

• I’ll be looking to add a mix of  long and short positions to the portfolio 
  • Probably 2-3 in total. 
• Thursday’s continual sell-off puts fear right back into this market. The Friday bounce felt like a dead-cat bounce and nothing more. 
• I’m willing to add more shorts to the portfolio at this point. 
• No new positions to the portfolio on Friday. 
• I am still long AMZN at $221.60 and WNR at $20.51 and short CHD at $52.74

Charts: