Trading Plan for May 13, 2011

Current Long Positions (stop-losses in parentheses): GOOG (528.75), NFLX June 270 Calls, AAPL (342.25), NTAP (52.45), B (24.64), PEP (69.75), APH (55.20), HPQ (40.65), RSH (15.93), STZ (22.20), CHKP (54.19)

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

BIAS: 82% Long

Economic Reports Due Out (Times are EST): Consumer Price Index (8:30am), Consumer Sentiment (9:55am)

My Observations and What to Expect:

• Futures are slightly up.
• Asia was mixed but most higher in trading, while European markets are trading about 0.5% higher on average.
• Commodities are up a shade heading into the open, but not showing significant strength of any kind. 
• Over the last two weeks, the market mentality has been to bend but not break and that is exactly what it did yesterday after rallying off of a strong open lower.
• We are still maintaining the 1340 level, and the critical support level of 1329 which represents the ‘higher-low’ on the S&P.
• We continue to trade above and below the 10-day moving average each day, but the 20-day moving average is solid as a rock. 
• A move today above 1360 would help alleviate a lot of concerns that the bulls have lost their edge, and if so, could lead to a nice market-wide breakout.
• 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: Still not a clear edge in terms of momentum here, but the bulls  continue to hold their major support levels, which will continue to tip the scales in the bulls favor.

Here Are The Actions I Will Be Taking:

• Added STZ yesterday at $22.76 and $CHKP at $55.57 – both breakout plays.
• Closed out APH yesterday at $55.19 for a 1.7% loss, Sold HPQ at $40.85 for a 1.5% loss. Closed out SSO at $55.04 for a 0.3% gain.
• HPQ and APH were sold yesterday after not liking the performance they were putting in relative to the broader markets. Once the trade isn’t going according to plan, I drop the stock.
• NTAP is showing a lot of strength getting its second upgrade this week alone.
• A strong day in the market, will allow for me to liquidate some positions today.
• NFLX June 270 Calls that I have may be sold if we hit $250.
• Will to add 1-2 new positions to the portfolio today.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).