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Trading Plan for June 28, 2011

Recs

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June 28, 2011 – Comments (0) | RELATED TICKERS: SPY

 

Current Long Positions (stop-losses in parentheses): SPY July 129 Calls, AAPL July 330 Calls, AGYS (7.77), IDIX (5.06), NYT (7.98), RIGL (8.24)

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

BIAS: 23% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), S&P Case-Shiller HPI (9am), Consumer Confidence (10am), State Street Investor Confidence (10am)

 

 

My Observations and What to Expect:

Futures are slightly lower heading into the open. 

 

Asia finished as much as 0.7% higher, while Europe is mixed/flat in their trading. 

Strong contrarian move to start the week, in which most Monday's of late have had a very bearish tone to them. 

The S&P managed t close back above the 10-day moving average, but still below the 20-day. Look to see whether we get that additional 1-2 day pop higher, with us having broken the 10-day MA again, and whether that move can push us through the 20-day as well. To-date, we have been unable to close above the 20-day MA. The last five trading sessions (6/21-6/27) have been nearly identical to the market action that we saw on 3/11 through 3/17, in which the market bottomed.  Here's the chart showing the similarities.

Bullish short-term wedge forming on the S&P daily chart. A move above 1288 today would break us out of that pattern. 

Also a bullish piercing pattern was formed yesterday on the S&P daily chart. 

NYSE Reversal Indicator shows us that a rally over the next couple of weeks is likely.

On a bearish note (because I've definitely outlined the bullish argument!), bears must get this market below the 200-day MA ASAP. Right now it sits at 1265, can't afford to let the bulls consolidate above that most important MA.

There is a larger, downward channel that the market is trading in now, and a break below 1250 would break its support. 

This week, a move above 1296, and ultimately 1300 for the bulls would dampen the bears prospects for a significant move downward, and put in a 'higher-high' for the market.

Greece will continue to be at the forefront of the news cycle, and will continue to affect market direction as well.

My conclusion: Looking for the market to put a string of positive days together, that at the very least would cast a shadow on the argument that there is a new 'Bear-Market'.

Here Are The Actions I Will Be Taking:

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