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Trading Plan for July 14, 2011

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July 14, 2011 – Comments (0) | RELATED TICKERS: SPY , ESCR , BGCP

 

Current Long Positions (stop-losses in parentheses): SPY August 136 Calls, DBLE (9.99), HDY (4.10), BGCP (7.93)

Current Short Positions (stop-losses in parentheses): None

BIAS: 16% Long

Economic Reports Due Out (Times are EST): Producer Price Index (8:30am), Retail Sales (8:30am), Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), Business Inventories (10am), Bernanke Speaks (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

Futures are slightly higher. 

 

Asia traded about -0.25% lower, and Europe is seeing losses of about -0.5%. 

Yesterday showed a huge bearish reversal in the market, with the S&P giving up 14 points off its highs. 

10-day moving average is proving to be problematic for the bulls over the past two days, becoming a key reversal area for the S&P. 

Volume continues to remain relatively in-line with previous trading  sessions. 

Despite reversals off of the days highs the last 2 days, we are seeing some willingness from the bulls to want to buy into this market, as seen by the large upper-shadows on the candles. 

We are oversold in the market right now (short-term). 

S&P continues to find support at the 50-day moving average. 

Important that you pay attention to the Fibonacci retracement levels today. On the S&P the 38.2% is at 1318, and the 50% is at 1307. We are currently in between these levels, and a pullback to the 50% is very possible at this point. 

Potential Head and Shoulders pattern forming on the S&P.

My Conclusion: The fact that we aren't lower on the 'threat' (again) by Moody's possible downgrade of US debt, shows the market is pricing in a lot of this already, and could be positioning itself for a push higher. However, a break of the week's lows, could send this market noticeably lower in the short-term. 


Here Are The Actions I Will Be Taking:

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