Trading Plan for July 29, 2010

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

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

BIAS: 100% CASH

Economic Reports Due Out (Times are EST): Jobless Claims (8:30am), EIA Natural Gas Report (10:30am), Fed Balance Sheet (4:30pm), Money Supply (4:30pm)

My Observations and What to Expect:

• Futures moderately higher ahead of jobs report.
• Jobs report whether good or bad, has been rallied on initially over the last two weeks. So a high jobless claims # doesn’t guarantee a sell-off.
• GDP report tomorrow will be what everyone prepares/positions themselves for today.
• Despite the futures being higher, there is a possibility that traders take profits from the most recent rally ahead of the GDP report.
• Gap as it stands now, seems very fill-able. But jobs # could throw a wrench in that play – stay tuned.
• Today will likely be a low volume day.
• Not a good sign for bulls showing for three days straight they can’t close above the 200-day moving average, despite very aggressive attempts to do so.
• Volume was surprisingly low yesterday for a down-day yesterday.
• Markets still heavily overbought.
• The lack of bad news, especially out of Europe has been the bulls’ best friend and really the catalyst for this rally we’ve seen.

Actions I Will Be Taking:

• Watch the open and jobs # to determine whether I can fade the open.
• I don’t expect to initiate any new swing trades today.
• Will spend my day likely scalping off of TNA and TZA and other 3x ultras.
• If trending day, I’ll fade any counter-trend action.
• If sideways, I’ll fade extremes in price movement.