PLAN YOUR TRADE, or YOU PLAN to FAIL
I always make it a habit to have a Trading Plan for the week - trade, demo trade, or
no trade. It helps set the right perspective - and when you find that you are right,
you ride the wave baby! So here's the plan next week:
1. Looking at the SPX above (darn, I forgot this last Friday and got killed on the Aussie after a long profitable run on the Euro... Silly me), it looks like we have to break above 1350 or below 1330 (tight range) to determine the next course of action. Support of SPX lies below at 1330, 1324, 1317. At the topside, resistance is at 1353, 1361, and 1385 (now that would really send us higher). The SPX chart above reveals the Inverse Head & Shoulders pattern. Was it a "fakeout" or a was it for real?
2. On the DOW, it's much more clearer, support is at 12,260-12,300
3. Since this is Options Expiration week, I expect Monday-Tuesday to follow the last friday's continuation trend down. But expect a whiplash on Wed - Friday, as expiration weeks are normally bullish (on the other note, just stay out if things are too volatile)
4. Silver ETF is a Six Flags Roller Coaster ride. I am long June 34 PUTS as I expect this thing to totally collapse to its January levels of $25 (it's now $34). But maybe since this Options Expirations week, I could sell some MAY Puts to offset my price, assuming they whack the buster up at the end of the week.
5. I am also looking at OIL - there's an interesting pattern there about filling the Gap.
We will execute either by going SHORT EURO (market breaks down) or LONG AUSSIE (market breaks up). So I expect it to be a tale of two halves - shorting EURO in the early half and riding the whiplash of the AUSSIE up on the rebound. Now I just have to wait for the fundamental news to pull the trigger.
Many people are still bullish on the market, with the DOW's target at 13,300 by end of Summer (who knows? Markets are thin in Summer, making it perfect to "climb the wall of worry". So let's focus on next week with that backdrop in mind.
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