Trading Plan for August 18, 2010
Current Long Positions (stop-losses in parentheses): TICC (8.42)
Current Short Positions (stop-losses in parentheses): SPY (113.30), DGX (50.09), FCN (36.75)
BIAS: 45% Short
Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am)
My Observations and What to Expect:
Despite yesterday's rally, volume wasn't overly impressive (constant theme these days).
Yesterday's end of day sell-off leaves me wondering if the bulls have no faith in the rally and decided to take profits, or if the bears were using the rally to reload their positions, or a combination of both.
Wouldn't put much thought into the Hindenburg Omen as a basis to buy or sell.
No major new reports today. If there is a gap this morning it would make for a good fade setup.
Bulls will look to maintain yesterday's gains and show some follow-through.
Bears will use rally as opportunity to reload their short positions.
Bears will target 1069 (Monday's lows) and the 50 day moving average to push the market below.
Bulls will want to establish Monday as the new lows to trade off of and the re-drawing of the upward trendline - just not as steep as before, but a continuation off of the July lows.
Actions I Will Be Taking: