Trading Plan for March 25,2011
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: