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Trading Plan for June 17, 2011

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June 17, 2011 – Comments (0) | RELATED TICKERS: SPY , AAPL , CALP

 

Current Long Positions (stop-losses in parentheses): AGYS (7.60), CALP (7.28), SPY July 130 Calls

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

BIAS: 6% Long

Economic Reports Due Out (Times are EST): Consumer Sentiment (9:55am), Leading Indicators (10am)

My Observations and What to Expect:

Futures are strong, up nearly 1%, heading into the open.  

 

Asia was down close to 1% on average overnight, while Europe is seeing gains ranging from 0.5% up to 1.9%.

Yesterday, represented a lot of market volatility with the VIX reaching as high as 24.65 intraday, before settling at 22.8 (still a sizable jump).

We tested the 200-day moving average perfectly on the S&P yesterday, with a strong final hour bounce in the markets, that showed a lot of volume. 

There was an extreme/uncharacteristic sell-off in Apple (AAPL) yesterday, followed by a huge surge in buying wiping away much of those losses, that when coupled with the action we saw in the S&P yesterday, gives me cause to think we may have hit a short-term bottom in this market. 

Ideal for the bulls would be a market bounce that sees us close at 1290 or higher. Not impossible considering how much short interest there is in this market. 

Watch 1280 on th S&P, which is the 10-day moving average, break through that, and we could see further price momentum gather.

Continue to watch the 200-day moving average going forward - as a break of that price level would be detrimental for a market recovery in the short-term. 

June Options expire today - expect market trickery as usual on these days. 

We have seen the first 6-straight weeks of selling since July '08 which at that time lasted only six weeks as well. Today is looking to snap that streak.

My conclusion: Today's strength is warranted, and would look for it to be sustained throughout the market session. 
Here Are The Actions I Will Be Taking:

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