Trading Plan for September 23, 2011

Current Long Positions: None

Current Short Positions: None

BIAS: 100% Cash

Economic Reports Due Out (Times are EST): None

My Observations and What to Expect:

• Futures are down about 1% heading into the open. 
• Asia saw average losses of about -1.6%, and Europe is trading with losses of as much as -3.5%
• We FINALLY confirmed the bear flag that the entire market has been trading in over the last month. 
• Key Support levels I am watching today is 1120, yesterday’s lows at 1114, and the 8/9 lows at 1101. Break all three and we’re headed for 1040. 
• 1164ish on the S&P will represent resistance from the underside of the bear-flag, should this market rally today. 
• Volume has increased over the three days, and one of the strongest volume readings since early August when the market sold off substantially. 
• We are on pace for five straight down months in the market – the likes of which we have seen happen since 11/07-3/08
• The panic in selling that we saw back in early August is clearly back, ripping of large chunks of share value across the board. 
• The market, (S&P) exhibited strength through out most of the day, spending a good portion of it’s afternoon range-bound at the highs, and then in the final 1.5 hours of trading, the S&P gave back all of its gains and finished in the red.
• Somewhat of a large doji candle pattern after a significant gap down yesterday, leaving it unfilled for the time being. 
• S&P confirmed the S&P head and shoulders pattern from the past month. 
• My Conclusion: The easy month to the short side has been made, dropping as much as +100 points on the S&P in about 14.5 hours of trading. Still more weakness can be ahead, but your expectations have to be tempered, and smaller gains should be taken to avoid that grisly dead-cat bounce. 

Here Are The Actions I’m Taking:

• Closed out TZA yesterday for a nice 6% gain. 
• Looking for a bounce in the coming days, but won’t front-run it. 
• Will to trade either side 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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