Current Long Positions (stop-losses in parentheses): SPY August 136 Calls, SCLN (6.09), SD (10.72), HNSN (4.80), IO (9.92)

Current Short Positions (stop-losses in parentheses): None

BIAS: 21% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Existing Home Sales (10am), EIA Petroleum Status (10:30am)

My Observations and What to Expect:

  • Futures are moderately higher.
  • Asia is up about 0.75% on average and Europe is up an average of 1%.
  • Major  move yesterday saw the S&P rip through the 10, 20, and 50-day moving average. 
  • Everything about yesterday’s move looks more like a continuation of the previous rally (off of the 200-day MA) than a dead cat bounce. 
  • Volume was yet again just average. 
  • Look for a test of 1356 being the next battle ground for the bulls and bears. 
  • Strong positive correlation of late between the dollar and gold – which is a relationship we are not used to seeing. 
  • Indices and a lot of stock charts are showing an inverse head and shoulders pattern forming on the daily charts. 
  • If the bears are going to recapture the momentum of this market, they need to get the S&P back below 1307, and then 1298 (short-term trendline off of 6/23 lows)
  • Blowout earnings in AAPL should provide support to the markets today. 
  • My Conclusion: I’m looking for this rally to continue into the latter part of this week and a potential test of recent highs. 

Here Are The Actions I Will Be Taking:

  • Sold SCLN at $6.46 for almost 1% in gains, ZQK sold at $5.35 for a 2% gain. 
  • Bought IO at $10.30, HNSN at $4.77. 
  • Continue to hold SPY August 136 Calls, would ideally like to hold them through the end of the week. Will take it day-by-day though. 
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).