Trading Plan for June 8, 2012

Economic Reports Due out (Times are EST): International Trade (8:30am), Wholesale Trade (10am)

Pre-market Update (Updated 7:30am eastern):

• US futures are down moderately ahead of the open. 
• European markets are trading -0.8% lower. 
• Asian markets traded on average -1.6% lower. 

Technical Outlook (SPX):

• Solid day of follow through for the market yesterday only to be wiped out in ithe final hour of trading.
• We are still well outside of the bullish wedge that was broken on Wednesday. 
• S&P needs to find its way back above 1329, and then challenge resistance at 1335.
• Market close to being back in overbought conditions. 
• S&P crossed back above the 10-day moving average,  and traded most of the day above the 20-day moving average, only to close a shade below it yet again (recurring theme – lots of resistance at the 20-day). 
• Major bottoms or at the least, interim bottoms, tend to make huge gains in the initial days following the bottom. See last October and September 2010. 
• Minor support at 1249, 1209 would also represent a level of price support, should we close below 1266 support. . 
• 30-minute chart has an inverse head and shoulders pattern emerging = bullish. 
• VIX is still elevated and rests above 22.

My Opinions & Trades:

• Though the market could continue running higher, the downtrend is still in place, and as a result I’ve started adding a couple of new short positions. 
• I’ll look to add another 1-2 short positions today, should the pre-market weakness hold up throughout the day. 
• Shorted HT at $5.30 yesterday.
• Shorted ELN yesterday at $13.19
• Long PPL at $27.65