Current Long Positions (stop-losses in parentheses): GOOG (533.00), NFLX June 270 Calls, AAPL (343.95), NTAP (52.45), TZOO (72.45), B (24.90), PEP (68.75), APH (55.20), HPQ (40.65), RSH (15.93)

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

BIAS: 82% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), International Trade (8:30am), EIA Petroleum Status Report (10:30am), Treasury Budget (2pm)

My Observations and What to Expect:

  • Futures are slightly higher heading into the open.
  • Asia was mixed in trading, while Europe is trading on average about 0.5% higher so far.
  • Rally from the last two days is looking very similar to the rallies that we saw off of the 3/16 & 4/18 lows.
  • We reclaimed the 10-day moving average on the S&P yesterday. The market is now at a juncture where is has to push on to new recovery highs which is above 1370 on the S&P. 
  • A retracement and break below 1329 would signal a shift in market sentiment
  • 1340 continues to be a key breakout support level. 
  • We broke out of the ‘megaphone’ shaped downward channel on the 30 min S&P chart yesterday, rendering it irrelavent.
  • Volume continues to be very light this week. Will continue to watch this. No concern yet.
  • By breaking 1340, we confirmed the inverse head and shoulders that had been in development since February ’11. Last time we confirmed a IH&S pattern was back in Sept ’10 and we rallied 220 points after the confirmation.
  • My conclusion: I think we should see another 1-2 days of the market rallying before we need to start scaling back on the positions some.

Here Are The Actions I Will Be Taking:

 

  • Closed out TZOO yesterday at $73.75 for a 0.8% loss after it failed to respond to strength in the market.
  • Added PEP yesterday at $69.92, APH at $56.19, HPQ at $41.46, and RSH 16.36.
  • Tightened the stop-loss in GOOG, NTAP, and B.
  • Willing to add 1-2 new positions max to the portfolio today, but only by trimming the position sizes of others. I want to be careful about increasing my portfolio commitment at this point.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

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