Trading Plan for April 4, 2011

Current Long Positions (stop-losses in parentheses): HD (36.96)

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

BIAS: 10% Long

Economic Reports Due Out (Times are EST): None

My Observations and What to Expect:

• Futures are slightly higher going into the open.
• Asian markets were higher, seeing gains as high as 1.5%; European markets were flat/mixed.
• S&P 500 closed fractionally higher than the previous lower-high at 1332, despite decisively breaking through the barrier on an intraday basis. 
• Market gave back a large chunk of its gains at the end of the day on Friday, ending the day with a large upper candle on the daily chart.
• Volume fell off from the day prior.
• Overall market is well over extended, and good chance that we some profit taking in the short-term. 
• I need to see some follow through on yesterday, and a close above 1332 before we technically break the downtrend the market has been in since 2/18/11.
• The market is well overbought since rallying off of its March lows. There is an elevated possibility that we see profit taking in the short-term before a substantial move higher.
• After 1332 is broken the next level of resistance is 1344 on the S&P.
• Oil confirmed the cup and handle and should see further upside in the short-term.
• My conclusion: Very difficult to bet against this market as all the bad news is ignored and good news is rallied on.

Here Are The Actions I Will Be Taking:

• Sold Suncor Energy (SU) on Friday after it failed to rally after breaking out, for a very small loss.
• Bought Home Depot (HD) as well at 37.84 on Friday.
• Will look to jump in some stocks to the long side today. Both from a day trade and swing trading perspective.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.