Trading Plan for September 28, 2011
Current Long Positions: Netflix (NFLX) Nov 160 Calls
Current Short Positions: None
BIAS: 7% Long
Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Durable Goods Orders (8:30am), EIA Petroleum Status Report (10:30am)
My Observations and What to Expect:
Futures are slightly higher heading into the open.
Asia was mixed in trading, as is Europe in their current trading session.
While the market finished nicely higher yesterday, under the surface, we saw a nasty sell-off into the close, wiping out almost 2/3's of the day's gains.
The S&P traded above the 10 & 20 day moving averages, but failed to close above them.
Price action placed the S&P back inside the bear flag pattern. While voided, the pattern is hampered somewhat.
Volume has been steady and average over the last three trading sessions.
From the bullish side, I believe that after we've seen a 84-point rally on the S&P from Friday intraday lows to intraday highs yesterday, that you should be tightening the stop-losses on all your long positions, and also be taking gains and getting lighter on your long exposure.
With price continuing to advance, and the 50-day moving average continuing to decline on the S&P, we are looking at a potential re-test of the MA this week.
Make sure that whatever you do, that you protect the gains that you have, and be ready for sudden and quick reversals in this market.
The bulls have yet to successfully trade AND close below 1120 on the S&P. There is continued buying support at these levels. Should this level eventually break, watch 1114, and then 1101 for additional support.
This week marks the last trading week for the quarter, and should expect some interesting price moves as we head towards Friday.
My Conclusion: Expect us to chop chop chop.
Here Are The Actions I'm Taking: