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Trading Plan for April 20, 2011

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April 20, 2011 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): HD (37.16), DISCK (35.36), SSO (50.35), BAC (12.03), RAX (41.17), ENZN (10.86), AAPL May 350 Calls

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

BIAS: 50% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Existing Home Sales (10am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

Futures are up strong, in excess of 1%, heading into the open.

Asian markets saw gains of over 1.5%. Europe is trading with a whopping +2% in gains across the board. Everything is rallying hard and strong.

We are poised to open up at 1330 today on the S&P, which is higher than the previous six trading sessions.

The key resistance level at 1340 is definitely in play today. We break it, then it becomes very likely we are on our way to new highs.

At the open today, we'll be trading above all the moving averages, which includes the 10, 20, and 50-day.

Volume was low despite the nice bounce that we received yesterday.

The downtrend on the 30 minute chart on the S&P will be break decisively today (downtrend began on 4/8)

You could make the conclusion, that the downgrade by the S&P on Monday, ultimately led to the sell-off in the dollar, and is helping the markets today (along with the tech earnings of course).

Doji-Hammer that I spoke of on Monday, has played out perfectly.

The obvious double-top being formed of late, will be dead if the market closes above 1340 today.

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: This is a big move, if it holds. Assuming as much, could lead a to game changer for the markets going forward. But we need to break 1340 first.

Here Are The Actions I Will Be Taking:

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