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Trading Plan for March 25,2011

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March 25, 2011 – Comments (0) | RELATED TICKERS: SPY

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

Current Short Positions (stop-losses in parentheses): SPY (131.35), ALXN (95.61), VAR (66.75)

BIAS: 72% Short

Economic Reports Due Out (Times are EST): GDP (8:30am), Corporate Profits (8:30am), Consumer Sentiment (9:55am)

My Observations and What to Expect:

Futures are moderately higher heading into the open.

Asian markets saw average returns of about 1%, while Europe traded flat. 

S&P closed above the 20 and 50-day moving averages yesterday, but volume was once again flat and lacking. 

Price on the S&P also managed to close right on the descending trend-line that started off of the 2/18 highs. 

As a result, today is a major inflection point for the markets. Sell-off would indicate that we are likely to see a resumption of the downward trend, while a strong puch through the descending trendline would indicate a breakout for the market.

Bulls have a text book inverted head and shoulders pattern working in their favor on the hourly intraday charts.

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.

My conclusion: Today is pivotal - a close above the descending trend-line would all but kill the bear arguments for further an immediate downside in this market. 

Here Are The Actions I Will Be Taking:

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