Trading Plan for March 23, 2011
Current Long Positions (stop-losses in parentheses): None
Current Short Positions (stop-losses in parentheses): SPY (131.35)
BIAS: 45% Short
Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), New Home Sales (10am), EIA Petroleum Status (10:30am)
My Observations and What to Expect:
Futures are slightly negative heading into the open.
Asian markets are mixed ranging from -1.7% up to 1%, while European markets are all trading slightly flat.
The S&P continues to struggle in getting past significant milestones, namely the 20 and 50 day moving averages and also the 1300 mark.
Volume was noticeably weak yesterday and the market is entering into short-term overbought territory.
End of quarter action could provide for some interesting dynamics in the market over the course of the next week or so.
S&P also struggling with the 10-week moving average on the weekly charts which was previously a major support level off of the September lows.
Remember we are in a confirmed downtrend. You cannot be as trusting of market dips as being a 'buying opportunity' - instead, as traders you have to reverse course and sell-the-rips.
If we see a market sell-off today, one important price level will be the 100-day MA at 1265, which is the same MA we recently bounced off of when we sold off significantly.
A break of the descending trend-line would occur at 1312 on the S&P.
Trades, whether long or short, should be held for a much shorter period of time. Market volatility can quickly erase gains.
My conclusion: If this market is going to continue its bearish ways, it will need to sell off here real soon and build off of yesterday's slight decline.
Here Are The Actions I Will Be Taking: