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Trading Plan for May 23, 2011

May 23, 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), KCI (57.69), SLV (33.36), PNW (44.78)

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

BIAS: 60% Long

Economic Reports Due Out (Times are EST): Chicago Fed National Activity Index (8:30am)

My Observations and What to Expect:

Futures are significantly lower heading into the open.

Asia saw losses as much as 2.9% and Europe on average is trading 1.7% lower.

Greece and Italy downgrades are weighing heavily on the markets.

We are setting up to open and challenge the lows from last week (recent lows) at 1318 on the S&P.

Today's open will put us below the 50-day moving average at 1325 and the long-term trend-line at 1330.

The S&P continues to trade in a downward channel. with today's negative open, the bottom channel could possibly be tested and would likely offer a potential bounce area for the market at 1311.

Volume since the beginning of the month continues to taper off.

My conclusion: It's definitely a day where my focus will be damage control, and to keep losses on current long positions to a minimum. However, don't expect me either to load the wagon with short positions either. After a move down like we are seeing this morning, isn't the time to do so.

Here's the S&P Chart Analysis.

Here Are The Actions I Will Be Taking:

Scalped SSO on Friday for a 1.5% gain

Added SLV at $34.06 and PNW at $45.61 on Friday.

No changes to the stop-losses today.

Will look to limit damage in my long positions. May play SSO off of any extreme negative TICK readings.

I will start tightening the duration of the trades that I make - I'll look for most of my trades to last 1-2 days at the most, should the recent market weakness persist. .

Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else's).