Trading Plan for Feb 15, 2011
Current Long Positions (stop-losses in parentheses): None
Current Short Positions (stop-losses in parentheses): GLD (133.67)
BIAS: 7% Short
Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Retail Sales (8:30am), Empire State Manufacturing Survey (8:30am), Import and Export Prices (8:30am), Redbook (8:55am), Treasury International Capital (9am), Business Inventories (10am), Housing Market Index (10am)
My Observations and What to Expect:
Futures are slightly negative heading into the open.
Asian markets were mixed with Hang Seng down 1%. Europe is essentially flat with a slight positive bias.
S&P closed at new recovery highs, but the volume was nonexistent.
Despite even the best of sell-offs, there is a constant bid beneath this market, that keeps the bears from pushing this market significantly lower. Once the dip buyers are defeated, that is when this market will see the correction that I am anticipating.
Three support levels to watch on the S&P (as of Monday's Close): 1317 (10-day MA), 1302 (20-day MA) and 1297 (Rising trend line off 9/1 lows). Break of all three of these including at the close, results in a very bearish shift in sentiment.
For the bears - Do something...anything to actually make this market close lower. Ideally, close below the lows from yesterday.
For the bulls - Keep doing what has been working for almost two years now - buying every dip the market provides, including those on the intraday basis.
My conclusion: This market is getting very crowded here at the top, and the best/safest way to play this market at this point, is to day-trade the markets and book gains on an intraday basis.
Here Are The Actions I Will Be Taking: