Trading Plan for June 16, 2011

Current Long Positions (stop-losses in parentheses): AFFX (6.92), ENTG (8.95), AGYS (7.60), CALP (7.28)

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 flat heading into the open after a few beats on the economic front. 
• Asia was down on average 1.6% and Europe trading down over 1%.
• Weakness in the Euro, and the debt crisis in Greece continues to weigh heavily on the market. 
• We now have the 200-day moving average in our sights at 1256 (S&P). It’s paramount for the bulls and broader markets to hold that MA and not break below the key moving average. 
• Huge bearish engulfing candle pattern over the last two days that wiped out all of Tuesday’s gains. 
• Volume for the first time in a couple of weeks showed a noticable uptick in volume. 
• In the short-term, the market needs to rebound and reclaim the 1290 level going forward. 
• If the bulls can break the 200-day MA, the next price level would come in at 1249, which is the Japanese crisis lows from March. A break there, and we’d likely see a move below 1200 on the S&P. 
• Morning Start candle pattern we spoke of yesterday was essentially nullified after the sell-off yesterday.

• Nasdaq broke below and closed below the 200-day moving average – a bad sign for the broader markets. 
• 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. I still wouldn’t be surprised if we finished positive on the week. 
• My conclusion: Still do for a sustained bounce – perhaps something that lasts a couple of weeks – enough to provide bulls optimism and discourage the bears. 

Here Are The Actions I Will Be Taking:

• Tough day of trading yesterday. Stopped out of KKD yesterday for a 2.9% loss, and sold AFFX at break even, and ENTG for a 1.5% gain. 
• Held AGYS and CALP overnight. 
• 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).