Trading Plan for June 17, 2011
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: