Trading Plan for October 21, 2010

Current Long Positions (stop-losses in parentheses): TICC (9.62), DTV (42.20), EOG (97.52), ESRX (46.42), AAPL (305.59), SHLD (72.95)

Current Short Positions (stop-losses in parentheses): SDS  (29.31)

BIAS: 61% Long

Economic Reports Due Out (Times are EST): Jobless Claims (8:30am), Leading Indicators (10am), Philadelphia Fed Survey (10am), EIA Natural Gas Report (10:30am), 

My Observations and What to Expect:

• Futures are trying to follow through on yesterday’s gains. Could potentially gap above Monday’s rally highs. 
• Asian markets were flat/mixed, while European markets once again are rallying across the board. 
• The bulls almost managed to close above Tuesday’s highs. Any follow through today, would take care of what is remaining. 
• Tried to fill the Tuesday gap, but only partially filled it in intraday action. 
• Tuesday can now be considered a higher-low in the ongoing trend off of the August lows. 
• NFLX and EBAY both had positive earnings reports that was well received by the Street. Both are set to open significantly higher today. 
• Bears need to push the markets below 1166 on the S&P (yesterday’s lows) and then 1159 (Tuesday’s lows). 
• New highs are in reach for the bulls, and should aim to break above 1184. Do that and Tuesday becomes a distant memory. 
• Today’s focus will once again be earnings. Little in the way of economic reports to move the market.
• Jobless Claims will affect the markets, but the focus is clearly on earnings. So far earnings season has been excellent for stocks on the S&P 500. But only 101 companies have reported – more to come this morning. 
• AT&T (T), Catepillar (CAT), Credit Suisse (CS), Eli Lilly (LLY), McDonalds (MCD), UPS (UPS) are some of the more notable earnings reports coming out this morning. 

Actions I Will Be Taking:

• Added a small position in SHLD, w/o increasing the capital commitment in my portfolio (lightened up on a few other stocks). 
• Will continue to tighten my stop-loss in AAPL as it increases in value, throughout the day. 
• May look to take some profits off the table if the market continues to rally into today. 
• Not hedged heading into the open.
• After reviewing all of my swing-trades for this year, I have discovered two things: 1) I need to be more aggressive with profit taking, and not stay in positions longer than necessary, 2) Avoid new positions in aging market trends.