Trading Plan for September 16, 2011

Current Long Positions: QCOM Oct 60 Calls, SDS ~ Inverse of S&P

Current Short Positions: PH, WWWW, BSX

BIAS: 40% Short

Economic Reports Due Out (Times are EST): Treasury International Capital (9am), Consumer Sentiment (9:55am)

My Observations and What to Expect:

• Futures are slightly down but off the overnight lows. 
• Asian markets were up over 1.75% on average, and Europe is trading 0.7% higher. 
• Yesterday marketed the 4th straight day the market finished in positive territory. If it can do the same again today, it would be the first 5-day advancement for the S&P since 6/27-7/1
• S&P managed to break the steep,steep downward trend, that begun back in July. Not overly surprising considering how steep the trend-line/channel was that we were trading in. 
• I would watch and see whether the S&P can break through 1230 – which represents previous highs, and a break of which would, establish a higher-high. 
• S&P is quickly approaching overbought territory in the short-term. If a reversal should occur, nearest support is at 1155 – a break of which would confirm the bear-flag pattern. 
• The underside of the S&P rising trend-line that began back in July ’09 has acted as major resistance to the market, could be tested yet again today at 1225.
• Yesterday’s volume had a noticeable drop-off from the previous trading days. 
• Best case scenario for the bulls is a rally to the upper band yet again for the bear flag pattern which this time would be somewhere around 1247 up to 1255.
• I still believe that ultimately we move lower, and will see another drastic move that likely breaks our recent lows from 8/9 in this market.
• As always, you need to be on your ‘tippe-toes’ for possible ‘intervention’ news to help stymie the situation (like what we’ve seen this entire week).
• Support level that you need to watch today: Rising support off of the 8/9 lows (bear flag support) at 1154, followed by 1120 where there is significant support for the bulls, and then 1101 which is where the 8/9 intraday lows are at. All three of these could ultimately come into play today.
• If the market breaks below 1101 on the S&P, then we are almost assured of seeing a test of the major support level at 1040 in the coming weeks.
• My Conclusion: Recent wave of buying has been impressive considering how low we were intra-day Monday morning. Over the past 2 months though, this is the time where the bears start to step back in, so for the bulls caution should be shown. 

Here Are The Actions I’m Taking:

• Still holding my shorts from Tuesday.
• No new positions to speak of.
• Will look to add further to short positions once the market shows a bit of weakness.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

Join the SharePlanner Trading Network for Free – and be a part of the only Real-Time Trading Network.