Trading Plan for August 22, 2011
Current Long Positions (stop-losses in parentheses): QCOM Oct 60 Calls, AAPL Sept 420 Calls, SPY Sept 124 Calls
Current Short Positions (stop-losses in parentheses): None
BIAS: 7% Long
Economic Reports Due Out (Times are EST): Chicago Fed National Activity Index (8:30am)
My Observations and What to Expect:
Futures up significantly - as much as 1.5%, heading into the open.
Asian markets are down about -0.75% on average, and Europe is trading up between 1% and 2.1%.
Gold spiked as high as $1898 in overnight trading, but has seen a descent pullback to 1864 since then.
S&P 3 points off of significant closing lows at 1120. Break it and we head for the 1101 market. After that you could see 1040.
Hold 1120, and you have what would appear to be a double bottom in place, which could see price move up to the 1280's before another significant move to the downside.
Next two resistance levels for the S&P is to close above 1172, and then 1205.
Look for a test today at the 10-day moving average at 1154ish.
Volume continues to remain strong over the last two trading sessions.
Be careful about remaining too heavy to the short side this week. We could begin seeing some positive catalysts come out of Europe, in the way of political intervention, not to mention you have Bernanke and the Jackson Hole speech on Friday.
My Conclusion: I am interested in just seeing the S&P hold the early morning gains, and push higher from the beginning. If it can do that, we should finally see a short squeeze in this market.
Here Are The Actions I'm Taking: