Trading Plan for April 25, 2012

Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), Durable Goods Orders (8:30am), EIA Petroleum Status Report (10:30am), FOMC Meeting Announcement (12:30pm), FOMC Forecasts (2pm), Bernanke Press Conference (2:15pm)

Premarket Update (Updated 8:30am eastern):

• US futures are showing an opening for the Nasdaq of nearly 2%, the other indices are up moderately. 
  
• Asian markets traded in a wide range from -0.2% up to +1.0%.
  
• European markets saw gains of about 1.5% on average. 
  

Technical Outlook (S&P):

• Yesterday’s price action saw us bounce slightly, without doing any significant repairs to the charts. 
• Today’s market is being dominated by the beat on AAPL earnings lifting the whole market and the NASDAQ in particular. 
• Last time AAPL reported, the market rallied hard the entire day. 
• 1357 is the main point of interest for the bears; break it and we’re headed for 1340. 
• 1392 should be the target for the bulls. Break that price level, and the bearish sell-off is greatly hampered. 
• A lot of talk about the ominous head and shoulders pattern on the S&P since mid-February. We are currently forming the right shoulder. 
• The previous trend-line off of the October lows has become resistance for price action on the underside. 
• On the weekly chart, we confirmed the bearish wedge pattern that we had been following for weeks. Very bearish development for the market. 
• We now only have 1 gap remaining from 3/6 to be filled.

My Opinions:

• I’m primarily concerned with what kind of rally this market gives the bulls today, and the reevaluate everything on the short side after the dust settles from the AAPL earnings.
• I covered ABD yesterday at $10.49 from $11.17 for a 6.1% gain. 
• I still hold two short positions in CAG from 25.85 and RL from $168.21
• I remain long in GOOG from $592.00
• I remain bearish on this market going forward.

Chart: