Trading Plan for June 15, 2011

Current Long Positions (stop-losses in parentheses): AFFX (6.92), ENTG (8.95),

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

BIAS: 10% Long

Economic Reports Due Out (Times are EST): Housing Starts (8:30am), Jobless Claims (8:30am), Current Account (8:30am), Bloomberg Consumer Comfort Index (9:45am), Philadelphia Fed Survey (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

• Futures are down around 1% heading into the open. 
• Asia was mixed in trading ranging from -0.7 to +0.3. Europe was down on average about -0.5%
• Based on futures we are looking at an open around 1277 on the S&P which would essentially wipe out a good portion of yesterday’s gains.
• On a positive note, the S&P chart over the last 3 days has formed a morning star candle pattern, which is very bullish and typically leads to short-term bullishness. 
• Yesterday’s action failed to break through the 10-day moving average as well as the declining resistance that used to act as support
• Yesterday’s strong gains did little to improve the technical charts – still heavily damaged at this point. 
• Watch the 200-day moving average on the Nasdaq (2633)- if it falls below it, will signal further declines ahead for the broader markets. 
• The market continues to break down, closing in on the S&P price support at the 1250 (3/16 lows) level and the 200-day MA at 1253.

• By most standards and indicators, we are as oversold as we were back in mid-March, which was also a pretty heavy sell-off too.
• We have options expiration this week, which also adds a little bit of trickery to the week in general.
• We have seen the first 6-straight weeks of selling since July ’08 which at that time lasted only six weeks as well. The probability of further decline in the absence of a major news event, is less than likely.
• My conclusion: If the market can ultimately recover and rally today (no indication of such at this point), it would be a good indication that the bad news that we saw in today’s economic reports is baked into the market. 

Here Are The Actions I Will Be Taking:

• Very busy yesterday: closed XTXI for 3.6% gain, sold VTSS for a 1.6% gain, VVTV 5.8% gain, and TLB for a -0.5% loss. 
• Held AFFX and ENTG overnight – could get stopped out at the open today. 
• 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).