Trading Plan for July 27, 2011
Current Long Positions (stop-losses in parentheses): KOG (6.56), TLAB (4.43), QCOM Oct 60 Calls
Current Short Positions (stop-losses in parentheses): None
BIAS: 13% Long
Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Durable Goods Orders (8:30am), EIA Petroleum Status Report (10:30am), Beige Book (2pm)
My Observations and What to Expect:
Futures are moderately lower
Asian markets were about 0.5% lower, and Europe is currently trading 0.7% lower.
10-day and 20-day moving averages are in play today - look to see whether the market can find any support from these short-term/minor support levels.
If we see a significant sell-off today, look for support at the short-term rising trend-line of 1310 (trend-line began on 6/23).
Volume saw a mild uptick but still well below average levels.
Current bullish trend would end if we break the 7/18 lows and put in a new lower-low.
After breaking Friday's highs, the market needs to break 1353 on the S&P, which represents the descending trend-line from the 5/2 highs.
S&P and other indices (more noticeably the Nasdaq), are forming inverse head and shoulders patterns dating back to May '11. A break of the 7/7 highs, would confirm the pattern.
My Conclusion: It's pretty hard to be overly bullish/bearish in this current market, when it appears to be a ship without its rudder. No clear direction exists, which makes it much more suitable for day-trading the current day's trend.
Here Are The Actions I'm Taking: