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Trading Plan for July 6, 2011

Recs

1

July 06, 2011 – Comments (1) | RELATED TICKERS: SPY , STNG

 

Current Long Positions (stop-losses in parentheses): SPY July 130 Puts

Current Short Positions (stop-losses in parentheses): STNG (10.39)

BIAS: 7% Short

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Challenger Job-Cut Report (7:30am), ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), ISM Non-Manufacturing Index (10am)

 

 

My Observations and What to Expect:

Futures are down moderately heading into the open. 

 

Portugal in the spotlight today, after yesterday's debt downgrade. 

Asia was mixed in trading with returns ranging from -1% to +1%. Europe is down overall about -0.6%.

We remain in extreme short-term over-bought territory. On the Bollinger Bands, price action has been completely outside the upper band for 2 straight days, which is difficult and historically unable to be sustained. 

Shortened holiday weeks can often prove to be a challenge when it comes to trading. 

On Friday, the market convincingly broke out of the descending channel line that it had been trading within since 5/2. 

Expect some resistance at 1345.

My Conclusion: Everything points to a pullback right now in the days ahead. Ideally for the bulls would be consolidation, or the formation of a short-term bull-flag.

Chart and Actions I'll Be Taking

1 Comments – Post Your Own

#1) On July 06, 2011 at 12:25 PM, davejh23 (< 20) wrote:

So much for the perfect inverse correlation between stocks and the dollar.  The dollar tanked last week and stocks rocketed higher.  The dollar has climbed back this week, but stocks are currently flat to up.  You would think stocks would be down 2%.  Financials actually are down 1.5% on the week...looks like the solid down-trend is still in place.

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