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Trading Plan for May 19, 2011

May 19, 2011 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): PEP (70.10), STZ (22.20), FTR (8.57), CB (64.32), PCLN (502.75)

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

BIAS: 50% Long

Economic Reports Due Out (Times are EST): Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), Existing Home Sales (10am), Philadelphia Fed Survey (10am), Leading Indicators (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

Futures are moderately higher heading into the open.

Asia was mostly lower (-0.4%), with Hong Kong being the only one up at 0.6%. Europe saw some very strong gains, rallying in excess of 1% across the board.

S&P made a strong bounce yesterday, doing much to fix some of the damage done of late, by 1) Closing a smidgen above the 10-day MA, and 2) closing above the important 1340 previous breakout level .

The market will face resistance at around 1349 which represents a descending trend-line the market has been unable to break through since its 5/2 highs. A break would positively change the landscape of the market.

Watch-out for a break of yesterday's lows which would also represent a break of the long-term trend-line dating back to September '10.

3 additional support levels to watch on the S&P: 1324 - 50-day moving average, 1326 - long-term trend-line, 1294 - another major long-term support level.

My conclusion: I think a move to 1349-50 is definitely in the cards - and will wait to see if we can break that resistance level before getting more aggressive with my trading.

Here Are The Actions I Will Be Taking: