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Trading Plan for July 20, 2011

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July 20, 2011 – Comments (0) | RELATED TICKERS: SPY , SD , HNSN

 

Current Long Positions (stop-losses in parentheses): SPY August 136 Calls, SD (10.72), HNSN (4.80), IO (9.92)

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

BIAS: 21% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Existing Home Sales (10am), EIA Petroleum Status (10:30am)

My Observations and What to Expect:

Futures are moderately higher.

 

Asia is up about 0.75% on average and Europe is up an average of 1%.

Major  move yesterday saw the S&P rip through the 10, 20, and 50-day moving average. 

Everything about yesterday's move looks more like a continuation of the previous rally (off of the 200-day MA) than a dead cat bounce. 

Volume was yet again just average. 

Look for a test of 1356 being the next battle ground for the bulls and bears. 

Strong positive correlation of late between the dollar and gold - which is a relationship we are not used to seeing. 

Indices and a lot of stock charts are showing an inverse head and shoulders pattern forming on the daily charts. 

If the bears are going to recapture the momentum of this market, they need to get the S&P back below 1307, and then 1298 (short-term trendline off of 6/23 lows)

Blowout earnings in AAPL should provide support to the markets today. 

My Conclusion: I'm looking for this rally to continue into the latter part of this week and a potential test of recent highs.


Here Are The Actions I Will Be Taking:

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