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Trading Plan for July 11, 2011

Recs

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July 11, 2011 – Comments (0) | RELATED TICKERS: SPY

 

Current Long Positions (stop-losses in parentheses): BWS (10.61), CLSN (3.37), CHTP (5.18), FVE (5.77), PSTI (3.09)

Current Short Positions (stop-losses in parentheses): STNG (10.39)

BIAS: 15% Long

Economic Reports Due Out (Times are EST): None

My Observations and What to Expect:

Futures are down very strong as much as 20 points right now due to concerns over Italy's debt situation.

 

Asia saw losses range from -0.5% down to -1.7%, while Europe is down hard seeing losses as much as -2.2%.

Important to pay attention to is the Fibonacci retracement levels today. On the S&P the 38.2% is at 1318, and the 50% is at 1307.

Very strong possibility that we open below very short-term support at 1330.

Volume on Friday's sell-off was very light. 

Today's sell-off is likely to spark chatter about a possible head and shoulders formation forming on the S&P. 

Watch additional short-term support off of the 10-day moving average which will likely open somewhere around 1324 or so. 

Based off of March's rally off of the lows it had formed, and the similarities that exists within the current market run, look to see whether the bulls become very interested in buying this dip today. 

With the weakness that we are seeing today, we'll need a much more dramatic pullback before there is any damage done to the technical picture of the S&P.

S&P managed to break through 1345 yesterday, which only leaves 1370 as the last remaining resistance barrier between current price and new recovery highs.

My Conclusion: I think most of the risk to the downside is getting taken out before the open, which could allow for us to see a rally off of the day's open. 

Here Are The Actions I Will Be Taking:

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