Trading Plan for April 12, 2011

Current Long Positions (stop-losses in parentheses): F (15.14), ADBE (33.93)

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

BIAS: 10% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), International Trade (8:30am), Import and Export Prices (8:30am), Redbook (8:55am), Treasury Budget (2pm)

My Observations and What to Expect:

• Futures are moderately lower heading into the open.
• Asia traded lower as much as -1.7% and European markets are seeing losses on average of about -0.9%.
• S&P failed once again to break and close above resistance at 1340, which resulted in a 9-point sell-off and closed below the 10-day moving average for the first time in 15 sessions. 
• With futures pointing down today, the market is looking at a normal pullback after an impressive rally off of the March lows.
• S&P Fibonacci retracement levels to watch as a result are 38.2% = 1305, 50% = 1294, 61.8% = 1283.
• The 50-day moving average is in play with the markets today at 1314, the previous test in a sell-off, did not offer a whole lot of support. 
• Market is actually coming upon a short-term oversold reading. A couple more days of selling will confirm the reading.
• The longer-term trend of the market suggests the market is in a state of flux/confusion, with steep sell-offs taken place over the past two months, but no long-term downtrend having been established.
• Finally saw a significant sell-off in oil yesterday, but did not generate any market enthusiasm.
• Oil’s continue rise, will eventually cripple the recovery – $4 gas will halt consumer spending, and increase prices across the board. Expect every uptick in the price of oil to greatly hamper the market’s upward ability. If the market wants to continue pushing higher, there needs to be a substantial pull-back in oil.
• Volume has remained below average despite two straight days of selling in the markets.
• My conclusion: No reason to be overly aggressive to the long-side as the market appears to be pulling back in the short-term, and the ideal solution is to wait for the pullback and take advantage of the cheaper prices.

Here Are The Actions I Will Be Taking:

• Sold out of F at $15.14 for a 0.9% loss.
• Bought ADBE at $34.40 yesterday. Will watch how it trades early on in light of market weakness to determine whether I stay in the position for the duration of the day.
• Should the early morning selling appear early on to trend further down, I will open up a 1-2 short positions but only for intraday-scalps.
• Should the market look to quickly recover, I will consider adding 1-2 new long swing positions.
• Much attention  will be placed on oil and whether it continues to rise or not.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).