Trading Plan for September 28, 2011

Current Long Positions: Netflix (NFLX) Nov 160 Calls

Current Short Positions: None

BIAS: 7% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Durable Goods Orders (8:30am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

• Futures are slightly higher heading into the open. 
• Asia was mixed in trading, as is Europe in their current trading session. 
• While the market finished nicely higher yesterday, under the surface, we saw a nasty sell-off into the close, wiping out almost 2/3’s of the day’s gains. 
• The S&P traded above the 10 & 20 day moving averages, but failed to close above them. 
• Price action placed the S&P back inside the bear flag pattern. While voided, the pattern is hampered somewhat. 
• Volume has been steady and average over the last three trading sessions. 
• From the bullish side, I believe that after we’ve seen a 84-point rally on the S&P from Friday intraday lows to intraday highs yesterday, that you should be tightening the stop-losses on all your long positions, and also be taking gains and getting lighter on your long exposure. 
• 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.
• 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.
• This week marks the last trading week for the quarter, and should expect some interesting price moves as we head towards Friday.
• My Conclusion: Expect us to chop chop chop. 

Here Are The Actions I’m Taking:

• Traded ProShares UltraShort S&P 500 (SDS) for a loss yesterday, as I foolishly closed the position just prior to the market tanking – took a 1% loss on the trade. 
• Current Average price on NFLX calls is $6.05. Will cut this position if the stock closes below $125. 
• Unlikely to be a trending day today in the market. Will take gains as I get them today in my day-trading.
• 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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