Trading Plan for September 19, 2012

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

• European markets are trading 0.2% higher. 
• Asian markets finished 1.0% higher on the day. 
• US futures are trading slightly above break-even. 

Economic reports due out (all times are eastern): MBA Purchase Applications (7am), Housing Starts (8:30am), Existing Home Sales (10am), EIA Petroleum STatus Report (10:30am)

Technical Outlook (SPX):

• Day #2 on the market pullback. Overall there was no sign of panic or change in behavior for the market. 
• Volume on SPX  over the past two days during the sell-off has been incredibly low, which further validates that this pullback is temporary. 
• We are also no longer short-term overbought as we had been in recent days. 
• 30-minute chart of SPX shows a very nice bull-flag that has been formed this week. 
• Last two days have seen buying power emerge in the afternoon, which shows us that there is underlying buying strength in this market still. 
• Price action pulled back inside of the upper bollinger-band. 
• 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 1405. 
• SharePlanner Reversal Indicator confirmed the move higher this past week. 
• VIX dropped despite the market finishing higher yesterday .Rests 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:

• Covered position in PRGO at $114.68 for a -1.3% loss. 
• Stopped out of GMCR at $30.39 for a -4.3% loss. 
• Bought SHLD at $61.10. 
• 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 $110.50.
• Stop-Loss for BEAV adjusted to $40.90. 
• Remain long GTAT at $6.73, BEAV at $40.75, WYNN at $107.47, NLSN at $28.70, and ALXN at $102.53
• Track my portfolio RealTime here. 

Charts: