Trading Plan for Feb 28, 2011

Current Long Positions (stop-losses in parentheses): BGCP (8.69), NFLX (205.35), SRZ (8.73), TSL (28.55)

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

BIAS: 100% Cash

Economic Reports Due Out (Times are EST): Personal Income and Outlays (8:30am), Chicago PMI (9:45am), Pending  Home Sales Index (10am), Farm Prices (3pm)

My Observations and What to Expect:

• Futures are up moderately ahead of the open. 
• Asian markets seeing gains between 0.9% and 1.4% while European markets are mixed in their trading.
• Solid bounce in terms of price on Friday, however the volume was weak and below average, which concerns me and makes me consider that this bounce is more of dead-cat bounce than a legit move to new highs. 
• Candle pattern over the last three days on the S&P has formed a bullish morning star pattern, which signifies short-term bottoms on the charts. 
• Uprisings in the Middle-East and their effect on oil production and output, will continue to remain on the forefront of trading, and any changes that occurs will have an impact on the markets. 
• Volume will need to improve, if this market bounce wants to hold.
• With Friday’s rally, the S&P recaptured the 20-day moving average and trend-line dating back to to 9/1. 
• A new “lower-low” would come from a break of the 1/28 lows at 1275. If we break that level, we are in a confirmed downtrend.
• For the bears – Sell the early morning strength and close below the 20-day MA and 9/1 trend-line mentioned above. 
• For the bulls – Need to see a close back above the 10-day moving average, which has acted of short-term support for much of this 6-month rally that we have been on. 
• My conclusion: The jury is still out on whether the bounce we saw on Friday is legit, or whether we are going the bears pounce on it as a shorting opportunity. Staying nimble and light at this juncture is the best idea right now. 

Here Are The Actions I Will Be Taking:

• Busy day on Friday as I closed out NFLX and TSL for small losses of 1.5%, but closed out SRZ at average price of $10.01 for a 7.1% gain, BGCP at $9.56 for a 3.6% gain, PCS at $14.12 for a 3% gain, OAS at $33.11 for a 1% gain, and DAN at 18.98 for a 0.2% gain. 
• Will watch early market action to gain a feel for general market action, and then trade accordingly. 
• Will consider adding 1-2 new swing trades to the portfolio.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.