Trading Plan for April 18, 2011

Current Long Positions (stop-losses in parentheses): HD (37.16), AMGN (53.93), , GLW (19.04), BTU (63.75), ADBE (33.78), CROX (), DISCK ()

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

BIAS: 43% Long

Economic Reports Due Out (Times are EST): Housing Market Index (10am)

My Observations and What to Expect:

• Futures are down moderately heading into the open. Fair value is at -3 points on the S&P which helps curb those losses some.
• Asian markets were mixed with a slight negative bias, while Europe saw losses in excess of 1% on average.
• S&P finished higher on Friday, reclaiming the 20 and 50-day moving averages. 
• Volume was higher, but mainly due to options expiration.
• Bulls will need to defend the 1302 level , while trying to break and reclaim the all-important 10-day short-term moving average.
• Second straight week of the market finishing in the negative. S&P double-top formation still in play. 
• To see a significant move higher, we’ll need a break of 1340 before more buyers come back into the fold.
• 1305, will be in play again today as it represents the 38.2% Fibonacci retracement level.
• I think the next couple of days are very important for the market, either we bounce here and re-challenge recent highs off of oversold conditions, or we usher in a new wave of selling that could take us back down to the March lows.
• 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.
• S&P Fibonacci retracement levels to watch are 38.2% = 1305, 50% = 1294, 61.8% = 1283.
• 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.
• My conclusion: A lot of the back and forth makes it difficult to gauge where the market wants to ultimately go, best thing to do is wait for a major support/resistance level to break, as noted above before taking any significant actions.

Here Are The Actions I Will Be Taking:

• Sold GLW on Friday for a 2.8% gain at 19.76. Sold AMGN at $55.50 for a 2.2% gain.
• Sold partial position of DISCK Friday for a -0.6% loss. Bought CROX at $18.64
• Will sell BTU regardless today due to earnings being released tomorrow morning.
• Will watch the market at least for the first 30 minutes before trading to guage market direction.
• Careful of the gap down being faded back up as most gaps have done of late.
• If the market shows signs of recovering, I may add an additional position to the portfolio as well as book gains in others.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).