Trading Plan for August 19, 2011

Current Long Positions (stop-losses in parentheses): QCOM Oct 60 Calls, AAPL Sept 420 Calls, SPY Sept 124 Calls

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

BIAS: 7% Long

Economic Reports Due Out (Times are EST): None

My Observations and What to Expect:

• Futures down yet again today, to the tune of 1%, but well off its lows which was more than 25 points. 
• Both Asian and European markets down on average -2.5%.
• Some rumors floating around this morning that the Fed is conducting an emergency meeting today. 
• Market action from yesterday, sent price action crashing down blow the 10-day moving average. 
• Volatility returned to the market yesterday with the VIX up 35% at 42.7.
• Volume was also much higher than in recent days. 
• Key level for the S&P today, is to defend the 1120 level, followed by the 1100. Break these levels, and 1040 is coming in the near future. 
• I don’t expect we’ll tank today like we did yesterday, and with options expiration today, we haven’t seen a lot of volatile expiration days of late. 
• In the last 15 minutes of trading yesterday, I saw the first signs of short-covering in this markets since all this crazy selling began back in July. It was in the last 15 minutes, so no significant conclusions can be made of it, but is worth noting that it occurred, sending stocks noticeably off their lows into the close. 
• My Conclusion: I’d expect at some point today for the bulls to make an attempt to push this market back to break even on the day. Whether that spurs on further price appreciation is anyone’s guess. 

Here Are The Actions I’m Taking:

• I’ll be standing aside from trading in this market today. No point in throwing good capital away.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

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