Daily Trading Plan for July 12, 2011
Current Long Positions (stop-losses in parentheses): IDIX (5.33), SPY August 136 Calls
Current Short Positions (stop-losses in parentheses): None
BIAS: 6% Long
Economic Reports Due Out (Times are EST): NFIB Small Business Optimism INdex (7:30am), ICSC-Goldman Store Sales (7:45am), International Trade (8:30am), Redbook (8:55am), FOMC Minutes (2pm)
My Observations and What to Expect:
Futures are moderately lower, but well over 15 points off of the S&P futures' lows.
Asia saw a lot selling between -1.5% and -3.1% and Europe is seeing, on average, about 1% in declines.
Futures, overnight, were down as much as 24 points, and are seeing a significant bounce/reversal off of those lows.
The S&P futures saw the reversal occur right at the 61.8% retracement level.
We dropped back below the 10-day moving average yesterday, but held the 38.2% retracement yesterday on the S&P, as well as the 50-day moving average.
The next moving average to test in the coming days will be the 20-day MA.
Volume saw a slight increase over Friday's levels, but remains well below average.
Important that you pay attention to the Fibonacci retracement levels today. On the S&P the 38.2% is at 1318, and the 50% is at 1307.
Potential Head and Shoulders pattern forming on the S&P.
Yesterday's rally, didn't really do anything in the way of technical damage on the charts.
S&P managed to break through 1345 yesterday, which only leaves 1370 as the last remaining resistance barrier between current price and new recovery highs.
My Conclusion: To many gap-downs occuring in the market, which is in large part why I think this sell-off in the pre-market is getting bought so quick. I expect that we see a nasty day for the bears today, and the potential for a strong rally.
Here Are The Actions I Will Be Taking: