Trading Plan for April 13, 2011

Current Long Positions (stop-losses in parentheses): ADBE (33.93), HD (37.16), AMGN (33.93)

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

BIAS: 20% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Retail Sales (8:30am), Business Inventories (10am), EIA Petroleum Status Report (10:30am), Beige Book (2pm)

My Observations and What to Expect:

• Futures are moderately higher heading into the open.
• Asia saw gains range from 0.7% up to 1%, and Europe is currently trading on average about 1% higher.
• S&P closed a fraction below the 50-day moving average and just above the 20-day MA.
• Talk about a double-top quickly gaining steam. Will need to break and close above 1340 to end this discussion. A break below 1249 would confirm the double top.
• If the selling persists in the days ahead, watch for a break of the trendline off of the 9/1 and 3/16 lows, which would currently reside at 1280.
• Market is now creeping into oversold territory in the short-term. 
• Today highlights once again the difficulty with holding short positions overnight lately based on the assumption of further market deterioration – because the market tends to snap back violently creating a mass short-squeeze by the herd of traders.
• S&P Fibonacci retracement levels to watch are 38.2% = 1305, 50% = 1294, 61.8% = 1283.
• The S&P, of late, has found little support at the 50-day moving average – I wouldn’t place a lot of weight on this MA going forward.
• The longer-term trend of the market suggests the market is in a state of flux/confusion, with steep sell-offs taking place over the past two months, but no long-term downtrend having been established.
• Oil continues to drop hard and fast. If oil can continue to pullback, it would go a long ways to strengthen stock prices going forward.
• Volume came in at average yesterday. Nothing impressive though.
• My conclusion: Watch for whether this market rallies today with the early morning strength that we are seeing – equal chance that we see the bears stomp on it and sell the early morning strength. Take gains as you get them.

Here Are The Actions I Will Be Taking:

• Sold out of ADBE for a 1.3% loss. Scalped SSO for a 0.8% gain.
• Added AMGN at 54.31 and HD at $37.51 to the portfolio. Any surge in any of these stocks early on will lead me to booking my gains.
• Will look to add 1-2 new positions to the portfolio today should the market strength hold up. .
• I’ll continue to place a lot emphasis on how oil performs throughout the course of the trading session.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).