Trading Plan for July 19, 2011
Current Long Positions (stop-losses in parentheses): SPY August 136 Calls, SCLN (6.09), SD (10.72)
Current Short Positions (stop-losses in parentheses): None
BIAS: 16% Long
Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Housing Starts (8:30am), Redbook (8:55am)
My Observations and What to Expect:
Futures are moderately higher.
Asia was mixed in trading ranging from -0.85% up to 0.45%, while Europe is trading about 1% higher on average.
S&P ripped through the 20-day and 50-day moving averages yesterday.
Despite the nasty intraday sell-off, and close that was significantly lower, the S&P still managed to erase 50% of the day's losses, providing for a nice run into the close.
The bounce occurred exactly at the 61.8% retracement level.
Volume was below average.
Market is heavily oversold in the Short-term, which could hamper the ability of the market to see further downside going forward.
Earnings season will see a wide range of major companies reporting this week, including Apple (AAPL)
Potential Head and Shoulders pattern forming on the S&P.
My Conclusion: Today's bounce heading into the open comes on the heals of very oversold conditions, I need to see these early morning gains hold into the close, if it cannot, there may be more downside in the short-term.
Here Are The Actions I Will Be Taking: