Current Long Positions (stop-losses in parentheses): PEP (70.10), STZ (22.20), SSO (53.35), EP (17.84), EXPE (24.74), FTR (8.57)

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

BIAS: 50% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), EIA Petroleum Status Report (10:30am), FOMC Minutes (2pm)

My Observations and What to Expect:

  • Futures are flat heading into the open.
  • Asia saw gains ranging from 0.5% up to 1%; Europe is trading up on average of 0.5%.
  • Commodities are showing noticeable strength heading into the open, with silver leading the way (up over 3%). 
  • To continue confusing both the bulls and bears, the market managed to recover into the close and finish right on 1329. 
  • On an intraday basis, the market dipped below the long-term trend-line (off of 9/10 lows) and the 50-day moving average. At the end of the day it managed to recover, close above those levels and form a nice bullish hammer candle.
  • S&P is at an inflection point – after today, we should have a much better idea of whether we are moving higher in the short-to-intermediate time frame or lower. The closing price is really what matters to me here.
  • S&P shows us trading in a well-defined downward channel on the 30-minute chart. We are currently trading at the bottom end of that range, and setting up nicely for a bounce over the next few days.
  • 3 additional support levels to watch on the S&P: 1323 – 50-day moving average, 1325 – long-term trend-line, 1294 – another major long-term support level.
  • My conclusion: Yesterdays recovery off of the lows, and bounce into the close, leads me to believe we are prime for a dead-cat bounce at the very least.

Here Are The Actions I Will Be Taking:

  • Closed out SSO the afternoon bounce at $53.60 for a 0.32% gain.
  • Bought FTR at $8.80 and EXPE at $24.74.
  • Tightened the stop on PEP slightly.
  • Will look to add as many as 3 positions to the portfolio should the market show a willingness to bounce today.
  • I will start tightening the duration of the trades that I make – I’ll look for most of my trades to last 1-2 days at the most.
  • 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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