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Trading Plan for May 20, 2011

May 20, 2011 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): PEP (70.10), FTR (8.57), CB (64.32), PCLN (502.75), KCI (57.69)

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

BIAS: 50% Long

Economic Reports Due Out (Times are EST): None

My Observations and What to Expect:

Futures are slightly lower heading into the open.

Asia was flat during their trading sessions and Europe had a slight negative bias.

Of importance is the fact that the S&P continued to maintain support on the long-term trend-line, as well as above the 10-day moving average. However, it was unable to close above the 20-day MA.

It is extremely important that the S&P doesn't get bogged down inside the descending price channel - defined below and most noticeable on the 30-min chart. A move above 1349 would dramatically increase the bullish outlook on this market.

Last two days have represented a slight dip in volume.

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 support levels to watch on the S&P: 1324 - 50-day moving average, 1327 - long-term trend-line, 1294 - another major long-term support level.

My conclusion: I'm still looking for a move to 1349-50 in this market. If we break it - I'll become much more aggressive in my trading.