Trading Plan for April 29, 2011

Current Long Positions (stop-losses in parentheses): GOOG (524.00), ADI (38.99), CA (24.09), UNP (97.45), NFLX June 270 Calls, JNY (14.45), AMAT (15.49), DF (10.48), NVDA (18.73)

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

BIAS: 48% Long

Economic Reports Due Out (Times are EST): Personal Income and Outlays (8:30am), Employment Cost  Index (8:30am), Chicago PMI (9:45am), Consumer Sentiment (9:55am), Farm Prices (3pm)

My Observations and What to Expect:

• Futures are slightly lower heading into the open.
• Asia is once again seeing mixed returns with Hong Kong down 0.4% while Japan is up 1.6%. Europe is trading in a mixed fashion with Germany leading the way up 0.4%.
• Market once again built on its gains of the previous two days, and is now well into overbought territory, as well as two-days and counting above the upper bollinger band. 
• As a result, I think it is of extreme importance that regardless of what happens today, that you begin looking at tightening profits and making them as secure as possible. 
• Its not that I think we have a major pullback coming or anything, but when I begin to see the S&P push as high and as fast as it has, it helps to take gains, where the easy money has been made and limited upside remains, and then use that capital for new plays. 
• And if the market happens to pullback or see some slight selling in the process, you A) are less exposed to the selling and B) you get to trade new positions at a better/more advantageous entry. 
• If you are still a bear in this market, remember that the market can stay irrational far longer than you could ever expect – don’t try to front run these strong market rallies – they will kill your portfolio. 
• Some minor resistance may be found at 1370, but the more significant level is at 1430 .
• By breaking 1340, we confirmed the inverse head and shoulders that had been in development since February ’11. Last time we confirmed a IH&S pattern was back in Sept ’10 and we rallied 220 points after the confirmation.
• On the 30min intraday charts, watch the 1350 level for support. Strong trendline in place off of the 4/18 lows. A move below 1358 would break this level.
• Higher-low has been established at 1294.
• My conclusion: Not expecting a huge amount of selling anytime soon, but believe we could see a day or two of some profit taking in the near-term before resuming the upward trend. At the very least some consolidation. 

Here Are The Actions I Will Be Taking:

• Sold UNP yesterday at $103.00 for a 4% gain. Sold Amat yesterday at $15.68 for a 1.2% loss. 
• Sold out of JNY yesterday for a -0.5% loss at $14.66
• Added DF at $10.72 and NVDA at $19.56 yesterday. 
• Tech plays are performing very well right now, and will likely be the focus of my trading going forward.
• Will look to book gains in 1-2 positions today, to lessen my market exposure.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).