Trading Plan for September 20, 2011

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

Current Short Positions: PH, WWWW, BSX

BIAS: > 99% Cash

Economic Reports Due Out (Times are EST): FOMC Meeting Begins, ICSC-Goldman Store Sales (7:45am), Housing Starts (8:30am), Redbook (8:55am)

My Observations and What to Expect:

• Futures are up moderately after rallying +20 points off the overnight lows. 
• Asia was down on average about -0.9%, and Europe is trading about 1.7% higher. 
• Yesterday marked another Monday rally off of significant lows, and staged an impressive rally to cut them in half by the market close. 
• On the S&P the 10-day and 20-day moving averages have converged, and yesterday we saw the market test that area, but was unable to drop through it. 
• Look for some resistance around the 50-day moving average today which will probably be around 1222-1224. 
• Volume returned to normal volume levels and traded at lower levels that what we’ve seen in recent weeks.
• We are now in overbought territory.
• Resistance looms at the underside of the trend-line (now broken) from July ’09, which is also in conjunction with where the 50-day MA is at – 1225 on the S&P.
• S&P could be forming a head and shoulders pattern over the course of the last month. A dip lower from here is a must, and a break below 1155 would confirm the pattern.
• Bearish Flag pattern that is in the works would also be confirmed at 1155 break.
• For the bulls, if they could trade their way back into positive territory today or this week, look to see if they can also break through 1230 – which represents previous highs, and a break of which, would establish a higher-high for them in this market.
• As always, you need to be on your ‘tippe-toes’ for possible ‘intervention’ news to help stymie the Greece situation, particularly with the 2-day Fed Meeting this week too.
• Support level that you need to watch today: Rising support off of the 8/9 lows (bear flag support) at 1159, 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: No clear direction ahead of the Fed Statement coming out tomorrow. To much risk to be short going into that speech. 

Here Are The Actions I’m Taking:

• Closed out all my shorts yesterday. Here are the results: BSX at $6.30 for a 1.3% gain, PANL at $58.29 for -1.1%, JBL at $17.54 at -2.9%, WWWW at 8.57 at 0.5%, SDS at $22.96 for -1.5%, and PH at $69.48 for 1.7% loss. 
• Needless to say, the short trades that I had last week and this week, didn’t go as well as I planned on. 
• To unpredictable of a market to hold all those positions overnight after what we saw yesterday. 
• Will look to day-trade both sides of the market today. 
• 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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