Trading Plan for July 28, 2010
Current Long Positions (stop-losses in parentheses): SDS (UltraShort ETF) (31.34)
Current Short Positions (stop-losses in parentheses): None
BIAS: 31% Short
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 going back and forth between positive and negative territory.
Yesterday's doji candle pattern on the daily chart and the bull's inability to stay and close above the 200 day moving average was very surprising in that they fell short of this all-important milestone.
Small possibility that the bears resume very strong selling going forward...not likely, just a possibility to be aware of, given the failure yesterday at the 200 DMA.
Consumer Durables will impact the early morning market.
Overbought conditions is begging for this market to sell off - even if just a day or two.
Important to remember that a market can remain overbought longer than what we think is possible.
Actions I Will Be Taking: