Trading Plan for July 19, 2011

Current Long Positions (stop-losses in parentheses): SPY August 136 Calls, SCLN (6.09), ABAT (0.94), MDF (4.66), SIFY (5.60), SD (10.72)

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

BIAS: 16% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Housing Starts (8:30am), Redbook (8:55am)

My Observations and What to Expect:

• Futures are moderately higher.
• Asia was mixed in trading ranging from -0.85% up to 0.45%, while Europe is trading about 1% higher on average. 
• S&P ripped through the 20-day and 50-day moving averages yesterday.
• Despite the nasty intraday sell-off, and close that was significantly lower, the S&P still managed to erase 50% of the day’s losses, providing for a nice run into the close. 
• The bounce occurred exactly at the 61.8% retracement level. 
• Volume was below average. 
• Market is heavily oversold in the Short-term, which could hamper the ability of the market to see further downside going forward.
• Earnings season will see a wide range of major companies reporting this week, including Apple (AAPL)
• Potential Head and Shoulders pattern forming on the S&P.
• My Conclusion: Today’s bounce heading into the open comes on the heals of very oversold conditions, I need to see these early morning gains hold into the close, if it cannot, there may be more downside in the short-term. 

Here Are The Actions I Will Be Taking:

• Sold MDF at 5.22 for a 7.6% gain, sold ABAT at $1.16 for a 6.4% gain, sold SIFY at $6.23 for a 7.4% gain. Sold BEBE at $7.59 for a 2% loss. 
• Bought SD at $11.20. 
• Continue to hold SPY August 136 Calls
• Will continue to day-trade the market with my focus being on small-cap stocks.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).