Trading Plan for October 14, 2010

Current Long Positions (stop-losses in parentheses): TICC (9.62), BRKR (14.54), CVX (82.45), ITW (47.40), SSO (40.07), QQQQ (49.25), TIE (19.73), BEAV (30.90), PAG (13.28), DTV (41.09), ZION (21.59), SDS (Hedge)

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

BIAS: 26% Long (80% w/o hedge position)

Economic Reports Due Out (Times are EST): International Trade (8:30am), Producer Price Index (8:30am), Jobless Claims (8:30am), EIA Natural Gas Report (10:30am), EIA Petroleum Status Report (11am)

My Observations and What to Expect:

• Futures are slightly higher today. 
• Yesterday the bulls managed to push through the last resistance barrier (1174) on the S&P before clearing the way to challenge the April highs. 
• Volume was outstanding yesterday – highest since July. 
• Asian markets up strong, European markets are mixed. 
• QE2 remains in the spotlight right now with traders. 
• Could foresee a pullback to the trend line in the cards for the near term – down around 1162-1165 range. Near the 20-day moving average. 
• Jobless Claims and PPI report will heavily influence market action. 
• Bears should aim to break through 1162 and then the 1156 level on the S&P.
• Afternoon selling was a surprising change. 

Actions I Will Be Taking:

• Closed out two positions yesterday: CVX and SSO for solid gains. 
• Added ZION to the portfolio, but could close it out today if it does not behave a little bit better. Breakout failed to hold. 
• Would like to see a pullback to add some new positions to the portfolio. 
• Stop-loss changes made in QQQQ, BRKR, and PAG. Potential tightening today could occur in BEAV (31.75) and DTV (41.54). 
• Will likely hold my hedge position throughout the morning, if we can break the 1 hour intraday highs, I’ll get rid of it.