Trading Plan for May 12, 2011

Current Long Positions (stop-losses in parentheses): GOOG (533.00), NFLX June 270 Calls, AAPL (343.95), NTAP (52.45), B (24.84), 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): Producer Price Index (8:30am), Retail Sales (8:30am), Jobless Claims (8:30am), Bloomberg Consumer Comfort Index (9:45am), Business Inventories (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

• Futures down strong heading into the open.
• Asia was down well over 1% in trading, and Europe is looking at losses in excess of 1.5%.
• With the early morning weakness, the market is poised to open below 1340 and 20-day moving average – 2 key support levels.
• But more than anything, watch where the S&P finishes at, in relation to the previous higher-low at 1329. A close below that mark, would indicate this market is trying to roll over. 
• There is a large amount of news coming out at 8:30am this morning as indicated above that could dramatically worsen or better the futures heading into the open.
• 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: Tough call here – I am using the 1329 S&P mark and whether we can hold it going forward, to determine market sentiment and my strategy.

Here Are The Actions I Will Be Taking:

• No  new positions added to the portfolio yesterday. 
• Will look to manage my positions admid market weakness, and close out my weak positions.
• Unlikely that I will add new positions to the portfolio today, unless the market can stage a descent rally off of the lows.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).