Trading Plan for July 27, 2010

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

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

BIAS: 100% Cash

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), S&P Case-Shiller Home Price Index (9am), Consumer Confidence (10am), State Street Investor Confidence Index (10am).

My Observations and What to Expect:

• Futures up moderately.
• Unbelievable how the market continues to rise on diminishing volume.
• Last three days have been eerily similar to the rally we saw from 7/6 through 7/15 with very little volume – yet proved sustainable.
• In past 15 days, we are up on 12 of them, flat on one other, and down only 2 days.
• On pace to take out 1131 on S&P. Before we test, I think we will see a pullback in the next few days. Perhaps to 1100 at some point.
• Careful with getting in long positions at this point. All indicators are in agreement that this market is well overbought – meaning that there is much more risk right now than there is upside – so wait for the pullback. 
• Consumer confidence  could move the market this morning. In my opinion, I think that this particular indicator is lagging the current market bullishness, and could be one that we see disappoint and perhaps add some selling pressure to the market today.

Actions I Will Be Taking:

• Continue to scalp my trades today. Yesterday I was up about 0.3% on the day doing so on a couple of trades. Not much in terms of trading opportunities.
• Will look to fade this mornings gap up, as there seems to be little news driving the futures upwards.
• Unlikely I’ll jump into any short or long positions, in which I would hold overnight. But I may consider shorting this market at the close for a potential pullback that seems to be desperately in the cards at this point, possibly even tomorrow.
• ETF’s I’ll be focusing on for scalping/day-trading: SPY, SDS, SSO, TNA, TZA