Trading Plan for September 27, 2011

Current Long Positions: Netflix (NFLX) Nov 160 Calls

Current Short Positions: None

BIAS: 7% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), S&P Case-Shiller HPI (9am), Consumer Confidence (10am), State Street Investor Confidence Index (10am)

My Observations and What to Expect:

• Futures are up almost 2% heading into the open. 
• Asia saw average gains of 3.3%, and Europe is trading with open gains of 4%
• Silver-bullet plan in Europe to bailout the PIIGS is propping the market up this morning. 
• Today’s strength will put opening price back inside the bear-flag pattern, which damages the legitimacy of the price-pattern. 
• With price continuing to advance, and the 50-day moving average continuing to decline on the S&P, we are looking at a potential re-test of the MA this week. 
• Yesterday’s strong open saw a quick and successful attempt to fill the opening gap. This will be more difficult to do on a day like today, because price action is being supported by significant news. 
• Very possible we’ll see a test of the 10 & 20-day moving averages. These two MA’s have offered little support/resistance on the S&P recently. 
• Make sure that whatever you do, that you protect the gains that you have, and be ready for sudden and quick reversals in this market. 
• The bulls have yet to successfully trade AND close below 1120 on the S&P. There is continued buying support at these levels. Should this level eventually break, watch 1114, and then 1101 for additional support.
• Volume over the last two positive sessions, have witnessed declining levels on the S&P. 
• We are on pace for five straight down months in the market – the likes of which we haven’t seen happen since 11/07-3/08. In order to avoid this, the S&P would have to rally 57 points before Friday. 
• This week marks the last trading week for the quarter, and should expect some interesting price moves as we head towards Friday.
• S&P confirmed the head and shoulders pattern from the past month.
• My Conclusion: Since this rally is based on significant news, and there is less volatility in overnight price action, I believe that these gains have a much better chance at sticking. 

Here Are The Actions I’m Taking:

• Traded in Direxion Small Cap Bull 3x Shares (TNA) yesterday (twice) for gains of 4.8% and 1.3%. Traded ProShares UltraShort S&P500 (SDS) for a 1.5% gain. 
• Bought Netflix (NFLX) Nov $160 calls at $7.30/contract on Friday. Looking for a bounce off of the 61.8% retracement level.
• Bought additional shares of NFLX when it was trading in the $126’s at $5.90/contract. 
• Will watch market action for the first 30min to 1 hour of trading before jumping into anything else
• May book the gains in my NFLX calls if they make a nice move 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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