Trading Plan for July 21, 2011
Current Long Positions (stop-losses in parentheses): SPY August 136 Calls, SD (10.72), GMO (4.39), LIOX (3.10), OPWV (2.38), YSI (10.75)
Current Short Positions (stop-losses in parentheses): None
BIAS: 26% 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 much stronger this mornings.
Asia was flat, and Europe is trading slightly higher.
After a major move on Tuesday, we saw the market consolidate yesterday near its highs, finishing the day ever-so-slightly lower.
Volume was very light.
S&P managed to hold on to the 10-day moving average yesterday
Look for a test of recent highs at 1356 in the coming days/weeks.
To stay relevant, the bears need to avoid a break of 1356, and aim for a push below 1295 on the S&P, in order to put a new downward trend in place.
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.
My Conclusion: I'm bullish here, and will look for an eventual challenge of recovery highs.
Here Are The Actions I Will Be Taking: