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Trading Plan for April 13, 2011

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April 13, 2011 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): HD (37.16), AMGN (33.93)

Current Short Positions (stop-losses in parentheses): None

BIAS: 20% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Retail Sales (8:30am), Business Inventories (10am), EIA Petroleum Status Report (10:30am), Beige Book (2pm)

My Observations and What to Expect:

Futures are moderately higher heading into the open.

Asia saw gains range from 0.7% up to 1%, and Europe is currently trading on average about 1% higher.

S&P closed a fraction below the 50-day moving average and just above the 20-day MA.

Talk about a double-top quickly gaining steam. Will need to break and close above 1340 to end this discussion. A break below 1249 would confirm the double top.

If the selling persists in the days ahead, watch for a break of the trendline off of the 9/1 and 3/16 lows, which would currently reside at 1280.

Market is now creeping into oversold territory in the short-term.

Today highlights once again the difficulty with holding short positions overnight lately based on the assumption of further market deterioration - because the market tends to snap back violently creating a mass short-squeeze by the herd of traders.

S&P Fibonacci retracement levels to watch are 38.2% = 1305, 50% = 1294, 61.8% = 1283.

The S&P, of late, has found little support at the 50-day moving average - I wouldn't place a lot of weight on this MA going forward.

The longer-term trend of the market suggests the market is in a state of flux/confusion, with steep sell-offs taking place over the past two months, but no long-term downtrend having been established.

Oil continues to drop hard and fast. If oil can continue to pullback, it would go a long ways to strengthen stock prices going forward.

Volume came in at average yesterday. Nothing impressive though.

My conclusion: Watch for whether this market rallies today with the early morning strength that we are seeing - equal chance that we see the bears stomp on it and sell the early morning strength. Take gains as you get them.

Here Are The Actions I Will Be Taking:

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