Trading Plan for August 7, 2011
Current Long Positions (stop-losses in parentheses): QCOM Oct 60 Calls, AAPL Sept 420 Calls
Current Short Positions (stop-losses in parentheses): None
Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Beige Book (2pm), Treasury STRIPS (3pm)
My Observations and What to Expect:
Futures are about 1% higher heading into the open.
Asian markets saw gains of about 1.9%, and Europe is currently up well over 2% on average.
Markets higher mainly due to Italy and Greece austerity plans
Nice hammer candle on the S&P yesterday and bounce off of the short-term trend-line from the 8/9 lows.
S&P is trading in a well defined channel off of the 8/9 lows as well. However, it leads me to believe it is more of a bearish flag pattern than anything else.
The rally could take us back up as high as 1240's before seeing the downward trend resume itself.
The 20-day MA is in play today as well as the 10-day. Notice the first bullish MA crossover in months occurring between the 10 and 20 MA's.
Volume was noticeably higher yesterday, compared to the previous two days, but overall was average.
My Conclusion: Watch the first hour of trading, and for whether the bears pounce on this rally. If not, then it is a good indication that today's gains will hold.
Here Are The Actions I'm Taking: