Trading Plan for June 28, 2011

Current Long Positions (stop-losses in parentheses): SPY July 129 Calls, AAPL July 330 Calls, MHLD (7.04), KKD (8.65), AGYS (7.77), IDIX (5.06), NYT (7.98), RIGL (8.24)

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

BIAS: 23% Long

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

My Observations and What to Expect:

• Futures are slightly lower heading into the open. 
• Asia finished as much as 0.7% higher, while Europe is mixed/flat in their trading. 
• Strong contrarian move to start the week, in which most Monday’s of late have had a very bearish tone to them. 
• The S&P managed t close back above the 10-day moving average, but still below the 20-day. Look to see whether we get that additional 1-2 day pop higher, with us having broken the 10-day MA again, and whether that move can push us through the 20-day as well. To-date, we have been unable to close above the 20-day MA. The last five trading sessions (6/21-6/27) have been nearly identical to the market action that we saw on 3/11 through 3/17, in which the market bottomed.  Here’s the chart showing the similarities.

• Bullish short-term wedge forming on the S&P daily chart. A move above 1288 today would break us out of that pattern. 
• Also a bullish piercing pattern was formed yesterday on the S&P daily chart. 
• NYSE Reversal Indicator shows us that a rally over the next couple of weeks is likely.
• On a bearish note (because I’ve definitely outlined the bullish argument!), bears must get this market below the 200-day MA ASAP. Right now it sits at 1265, can’t afford to let the bulls consolidate above that most important MA.
• There is a larger, downward channel that the market is trading in now, and a break below 1250 would break its support. 
• This week, a move above 1296, and ultimately 1300 for the bulls would dampen the bears prospects for a significant move downward, and put in a ‘higher-high’ for the market.
• Greece will continue to be at the forefront of the news cycle, and will continue to affect market direction as well.
• My conclusion: Looking for the market to put a string of positive days together, that at the very least would cast a shadow on the argument that there is a new ‘Bear-Market’.

Here Are The Actions I Will Be Taking:

• Closed out KKD at $9.45 for a 4.7% gain, Sold TLB at $3.61 for a -1.1% loss, Sold MHLD at $9.20 for a 2.3% loss.
• Held my SPY and AAPL calls, and also bought and held overnight: AGYS at $8.12, IDIX at $5.30, RIGL at $8.57, and NYT at $8.34
• A strong move out of the markets today would lead me to book all or at least a portion of my gains in SPY and AAPL. 
• 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).