Trading Plan for September 25, 2012

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

• European markets are trading 0.2% higher this morning. 
• Asian markets finished 0.3% higher. 
• US futures are trading moderately higher ahead of the bell.

Economic reports due out (all times are eastern): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), S&P Case-Shiller HPI), Consumer Confidence (10am), FHFA House Price Index (10am), Richmond Fed Manufacturing Index (10am), State Street Investor Confidence Index (10am)

Technical Outlook (SPX):

• Day 6 of consolidation for the markets. Still we are bull-flagging, and maintaining support above the 10-day moving average. 
• Once again the dip-buyers came in and supported the market, filled the gap, and pushed the market off of the day’s lows. 
• We’ve come well off of overbought conditions. 
• With recent consolidation on low volume, and  lack of any follow-through from the bears, we are setting up nicely for a nice move to the upside. Be very careful holding on to shorts positions with wide stop-losses. 
• A close below the 10-day moving average would change the outlook of the SPX short-term.  
• Often times this is the first sign of defense by the bulls in a soft pullback for the market to bounce from.
• 30-minute chart for SPX still has upward trend intact but with consolidation over the past 6 days. 
• 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 1412. 
• SharePlanner Reversal Indicator confirmed the move higher this past week. 
• VIX at 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 IACI at $52.25 from $52.59 for a -0.7% loss. 
• Bought BIG at $30.84
• Bought LUK at $24.05. 
• Current stop-losses have been adjusted across the board. 
• ALXN stop-loss moved up to $111.50
• Stop-loss for NLSN at $29.80.
• Stop-Loss for WYNN increased to $111.50.
• Stop-Loss for BEAV adjusted to $41.60. 
• Stop-Loss for IACI moved to $52.25
• Stop-Loss for PNR moved to $42.50
• Remain long TMO at $59.91, PNR at $43.85, BEAV at $40.75, WYNN at $107.47, NLSN at $28.70, and ALXN at $102.53
• Track my portfolio RealTime here. 

Charts: