Trading Plan for April 6, 2011
Current Long Positions (stop-losses in parentheses): ECA (34.45), AAPL (334.75), SU (44.68), ERTS (19.58)
Current Short Positions (stop-losses in parentheses): None
BIAS: 40% Long
Economic Reports Due Out (Times are EST): MBA Purchase Applications &7am), EIA Petroleum Status Report (10:30am), Treasury STRIPS (3pm)
My Observations and What to Expect:
Futures are moderately higher going into the open.
Asian Markets saw returns range from -0.3% up to 1.1%. European markets were moderately higher.
For the third straight day, the S&P is really struggling with the 1332 level in the market. Though it seems fine with breaking it on an intraday basis, it doesn't seem able to hold it into the close.
Again today we weill be opening and moving higher than 1332, but the key is whether we can hold the gains into the close.
Watch for a close below 1328, to determine whether this market may see additional seeing in the short-term.
Volume continues to fall in line with what we've see over the last three weeks.
Recent consolidation, to a minor extent is helping to work off overbought conditions.
The last time we saw the 10-day MA cross through the 20 and 50-day MA in back-to-back days, the S&P exploded for a 110+ point move before seeing any type of pullback.
If we close decisively above 1332 today, we'll likely see additional follow through in the form of an extended move in the markets.
A close above 1332 would technically break the downtrend the market has been in since 2/18/11.
After 1332 is broken the next level of resistance is 1344 on the S&P.
My conclusion: While there is no reason to believe the market won't continue to march higher going forward, I believe we could see a few days of profit taking on the horizon.,
Here Are The Actions I Will Be Taking: