Trading Plan for April 19, 2011

Current Long Positions (stop-losses in parentheses): HD (37.16), BTU (63.75), ADBE (33.78), CROX (18.29), DISCK (35.36), SSO (50.35), BAC (12.03)

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

BIAS: 53% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Housing Starts (8:30am), Rebook (8:55am)

My Observations and What to Expect:

• Futures are flat heading into the open.
• Asian markets saw losses average about -1.5%, due mainly to the sell off in the U.S. yesterday, while Europe is currently seeing gains of about 0.5%.
• Despite the heavy selling, volume was average, and the market bounce off of the intraday lows, formed a very bullish doji hammer.
• On the day, the S&P bounced off of the 50% Fibonacci level, and closed above the 38.2% retracement level.
• Other key support levels to keep an eye is the rising support trend line off of the 9/1 lows, currently at 1290, and then the trendline off of the March ’09 recovery lows at 1260.
• Goldman Sachs (GS) reports earnings this morning and will play a key roll to how the market fairs today, particularly financials. 
• Apple (AAPL) will report after the bell. A miss by them, could send shock waves through the rest of the market.
• 30-minute chart on the S&P suggests we should see a bounce at least in the the 1310’s, even if this market still has further downside to it going forward.
• The inability of the bears to close at the intraday lows, in recent sell-offs, suggests the ‘dip-buying is still in full-effect’.
• A lot of talk of the market rolling over right now, especially with the obvious double-top being formed.
• 1294/5 (also the Fib 50% level) represents some significant support, considering we have bounced hard when testing it in the past (2/3,2/24 and yesterday)
• To see a significant move higher, we’ll need a break of 1340 before more buyers come back into the fold.
• 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: It is hard to become overly bearish in a market where there are so many outside forces (i.e. Fed) providing underlying support to is stability, particularly when we’ve yet to see a significant and extended breakdown in the market since the summer of last year.

Here Are The Actions I Will Be Taking:

• Sold CROX at 18.29 for a -0.92% loss, ADBE at $33.67 for a -2.11% loss, and BTU at $64.12 for a -1.87% loss.
• Bought BAC at $12.30, and SSO at $51.21.
• Will look to add an additional 1-2 new positions should the market bounce today.
• Will watch the market at least for the first 30 minutes before trading, to guage market direction.
• Oversold Pullback/bounce plays have worked much better of late than the traditional breakout play.
• I will look to exit my position in SSO before the end of the day today.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).