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Trading Plan for April 19, 2011

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April 19, 2011 – Comments (0) | RELATED TICKERS: SPY , GS , AAPL

Current Long Positions (stop-losses in parentheses): HD (37.16), DISCK (35.36), SSO (50.35), BAC (12.03)

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

BIAS: 53% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Housing Starts (8:30am), Rebook (8:55am)

My Observations and What to Expect:

Futures are flat heading into the open.

Asian markets saw losses average about -1.5%, due mainly to the sell off in the U.S. yesterday, while Europe is currently seeing gains of about 0.5%.

Despite the heavy selling, volume was average, and the market bounce off of the intraday lows, formed a very bullish doji hammer.

On the day, the S&P bounced off of the 50% Fibonacci level, and closed above the 38.2% retracement level.

Other key support levels to keep an eye is the rising support trend line off of the 9/1 lows, currently at 1290, and then the trendline off of the March '09 recovery lows at 1260.

Goldman Sachs (GS) reports earnings this morning and will play a key roll to how the market fairs today, particularly financials.

Apple (AAPL) will report after the bell. A miss by them, could send shock waves through the rest of the market.

30-minute chart on the S&P suggests we should see a bounce at least in the the 1310's, even if this market still has further downside to it going forward.

The inability of the bears to close at the intraday lows, in recent sell-offs, suggests the 'dip-buying is still in full-effect'.

A lot of talk of the market rolling over right now, especially with the obvious double-top being formed.

1294/5 (also the Fib 50% level) represents some significant support, considering we have bounced hard when testing it in the past (2/3,2/24 and yesterday)

To see a significant move higher, we'll need a break of 1340 before more buyers come back into the fold.

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.

My conclusion: It is hard to become overly bearish in a market where there are so many outside forces (i.e. Fed) providing underlying support to is stability, particularly when we've yet to see a significant and extended breakdown in the market since the summer of last year.

Here Are The Actions I Will Be Taking:

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