Trading Plan for August 10, 2010
Current Long Positions (stop-losses in parentheses): XLF (14.02), V (68.99), INTC (19.75), ENZN (10.15), QQQQ (44.79)
Current Short Positions (stop-losses in parentheses): None
BIAS: 65% Long
Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Productivity and Costs (8:30am), Redbook (8:55am), Wholesale Trade (10am), FOMC Meeting Announcement (2:15pm)
My Observations and What to Expect:
Futures down moderately.
I do not like trading days like today when the Fed is scheduled to release their statement. It is very difficult to trade at all and creates utter market havoc.
Of late, reaction to the FOMC statement has usually been positive - not always, but the majority of the time.
Don't try to play the Fed announcement. Whipsaw action can knock you out of your trade even if you are ultimately right.
Productivity & Costs at 8:30 will impact market some, but the real test will come at 2:15.
Volume will likely be light and trade range-bound prior to today's announcement.
Futures down 5-8 points looks very fade-able at the open.
Unable to break through 1131 level yesterday, was disappointing for the bulls. Now they hope the Fed can boost them up through it today.
Bears could make a BIG statement if they push this market down hard and fast today.
Watch to see whether the bulls hold the 200-day moving average on the S&P.
Actions I Will Be Taking: