Trading Plan for July 15, 2011
Current Long Positions (stop-losses in parentheses): SPY August 136 Calls, SCLN (6.09), TSYS (5.08), ABAT (0.94)
Current Short Positions (stop-losses in parentheses): None
BIAS: 14% Long
Economic Reports Due Out (Times are EST): Consumer Price Index (8:30am), Empire State Manufacturing Survey (8:30am), Industrial Production (9:15am), Consumer Sentiment (9:55am)
My Observations and What to Expect:
Futures are slightly higher.
Asia was mixed in trading seeing little movement in price, while Europe is trading on average about -0.3% lower.
Yet another significant downside reversal off of the 10-day moving average for the 3rd straight day. This time reversing and establishing new weekly lows on a bearish engulfing pattern.
Google (GOOG) reported solid earnings and skyrocketed in after hours trading.
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.
We have finished lower 4 out of the last 5 days and for 4 straight days we have finished lower from where we began the day (meaning continued selling has been seen each day after the open).
S&P is sitting on the 20-day moving average - we break it, and the next likely area to test is the 200-day moving average which offers a lot of support.
Price on the S&P is sitting on top of the 50% retracement level - look to see if we get a bounce here.
Volume though not great by any measure, has nonetheless, managed to increase over the last 6 trading sessions.
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 selling off the day's highs have been a huge annoyance for bulls, and if we are going to bounce in the short-term without having to test the 200-day MA again, we will need to bounce here.
Here Are The Actions I Will Be Taking: