Trading Plan for June 22, 2011

Current Long Positions (stop-losses in parentheses): AGYS (7.60),SPY July 130 Calls, AAPL July 330 Calls, SBGI (9.67), VVTV (7.42), MHLD (7.04)

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

BIAS: 7% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), FHFA House Price Index (10am), EIA Petroleum Status Report (10:30am), FOMC Meeting Announcement (12:30pm), Bernanke Press Conference (2:15pm)

My Observations and What to Expect:

• Futures are slightly down..
• Asia rallied over 1.6%, and Europe is trading flat and mixed. 
• Yesterday’s rally helped to repair some of the technical damage done over the last 7 weeks. 
• We broke convincingly above the resistance at 1293 which represented the highs of the doji candle formed on the weekly S&P last week. 
• As it currently stands right now, we are forming a bullish morning star candle pattern over the past 3 weeks on the S&P weekly chart. 
• Also important was that the S&P finished above the resistance formed by the 4/18 and 2/24 lows on the S&P. 
• Price action also managed to break back into the downward channel that the S&P traded in for all of May. 
• Assuming we can break through 1300, the target for the bulls would become the downward trend-line formed off of the 5/2 highs, which currently sees resistance at 1324.
• Volume was slightly higher, but still below average of late, likely due to investors remaining on the sideline ahead of the FOMC.

• Last time the FOMC Statement was released, there was very little reaction to it in the markets. 
• Breaks in the 10-day moving average, typically leads to at least a 1-2 day bounce in the markets.
• A break below 1257 or the 200-day moving average would be disastrous for the markets.
• My conclusion: Market has rallied for 4 straight days, and yesterday’s move was very bullish. We could see the bears step in an try to short this rally. Caution is urged at these levels. 

Here Are The Actions I Will Be Taking:

• Busy day yesterday, Sold AGYS at $8.35 for a 6.3% gain, VVTV at $7.97 for a 5.7% gain, SBGI at $10.44 for a 4.4% gain, ICOG at $2.90 for a 2.4% loss, IDIX at $5.17 for a 0.4% loss, KKD at $8.82 for a 1.8% loss. 
• Held MHLD overnight. Expect this to be a 2-3 day trade. 
• Ideally would like to sell my S&P July 130 calls on market strength 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).