Trading Plan for July 19, 2010

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

Current Short Positions (stop-losses in parentheses): ESV (42.84), MR (32.34), WTFC (37.71), SLAB (44.80), CERN (83.20), ALB (43.59), HIBB (26.65),  WRC (40.95)

BIAS: 89% Short

Economic Reports Due Out (Times are EST): Housing Market Index (10am)

My Observations and What to Expect:

• No major economic reports due out today that would single-handedly shift/influence market sentiment.
• Futures up moderately prior to open.
• With no news, morning bullishness is a fade-worthy trade on gap-up
• Friday’s sell-off engulfed six previous trading sessions = bearish
• Still overbought on S&P and other indices. 
• Volume on Friday was higher than all previous 9 trading sessions.
• Previous higher volume day occurred on key reversal day that occurred on 7/1/10
• Series of previous lower-highs in place…perfectly.
• If series of 9 day market reversal pattern remains intact, we could be on only day 2 of 9 selling days.
• Earnings should be main market driver this week with big names reporting.

Actions I Will Be Taking:

• Look to add one more position to my portfolio if the market doesn’t sell-off right away. Preferably an index fund, maybe even a 2x.
• Will look to hedge portfolio with an ultralong if the market gets suddenly bullish and bounces through significant intraday resistance levels.
• May scalp a trade to the short side if the opportunity presents itself.