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Trading Plan for May 11, 2011

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May 11, 2011 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): GOOG (533.00), NFLX June 270 Calls, AAPL (343.95), NTAP (52.45), B (24.90), PEP (68.75), APH (55.20), HPQ (40.65), RSH (15.93)

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

BIAS: 82% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), International Trade (8:30am), EIA Petroleum Status Report (10:30am), Treasury Budget (2pm)

My Observations and What to Expect:

Futures are slightly higher heading into the open.

Asia was mixed in trading, while Europe is trading on average about 0.5% higher so far.

Rally from the last two days is looking very similar to the rallies that we saw off of the 3/16 & 4/18 lows.

We reclaimed the 10-day moving average on the S&P yesterday. The market is now at a juncture where is has to push on to new recovery highs which is above 1370 on the S&P. 

A retracement and break below 1329 would signal a shift in market sentiment

1340 continues to be a key breakout support level. 

We broke out of the 'megaphone' shaped downward channel on the 30 min S&P chart yesterday, rendering it irrelavent.

Volume continues to be very light this week. Will continue to watch this. No concern yet.

By breaking 1340, we confirmed the inverse head and shoulders that had been in development since February '11. Last time we confirmed a IH&S pattern was back in Sept '10 and we rallied 220 points after the confirmation.

My conclusion: I think we should see another 1-2 days of the market rallying before we need to start scaling back on the positions some. 

Here's My Markup On The S&P.

Here Are The Actions I'll Be Taking Today.

 

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