Trading Plan for April 4, 2011
Current Long Positions (stop-losses in parentheses): HD (36.96)
Current Short Positions (stop-losses in parentheses): None
BIAS: 10% Long
Economic Reports Due Out (Times are EST): None
My Observations and What to Expect:
Futures are slightly higher going into the open.
Asian markets were higher, seeing gains as high as 1.5%; European markets were flat/mixed.
S&P 500 closed fractionally higher than the previous lower-high at 1332, despite decisively breaking through the barrier on an intraday basis.
Market gave back a large chunk of its gains at the end of the day on Friday, ending the day with a large upper candle on the daily chart.
Volume fell off from the day prior.
Overall market is well over extended, and good chance that we some profit taking in the short-term.
I need to see some follow through on yesterday, and a close above 1332 before we technically break the downtrend the market has been in since 2/18/11.
The market is well overbought since rallying off of its March lows. There is an elevated possibility that we see profit taking in the short-term before a substantial move higher.
After 1332 is broken the next level of resistance is 1344 on the S&P.
Oil confirmed the cup and handle and should see further upside in the short-term.
My conclusion: Very difficult to bet against this market as all the bad news is ignored and good news is rallied on.
Here Are The Actions I Will Be Taking: