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July 22, 2012 / redman59

Game Plan Going Forward

What a great day for the markets in commemoration of D-Day. D-day was the largest amphibious invasion in world history and it’s nice to have a big positive day for America on a day that saw much blood 68 years ago. With today’s action I like to look at the Person Weekly Pivot to measure risk and how much should I start allocating of my portfolio. I have written about this indicator in a previous post and encourage you to read it for more insight. With days like today it’s hard to not want to get in. Last week Monday reminded me of this action as we saw a nice up day into the Person Weekly Pivot resistance which told me to stand back a bit and wait to see what happens. Luckily I followed that plan and we saw more selling and any new longs would be underwater (for the most part). I wanted to post a chart again with the study and where we are at in the SPX and that included the month of May. Notes are on the chart.

Looking at this chart you can see we are again near the the resistance level of the Person Weekly Pivot. Also I am looking at that 1333-1337 as a tough level to crack. If I were initiate longs under this level they will be small. The last move we had to the downside in mid-May saw nice up days followed by consolidation which then led to last weeks selling. In reading several blog posts it seems that further consolidation would be the healthiest and I agree. I would like to consolidate below those resistance levels noted, let accumulation happen, and then rip to the upside through those resistance levels with volume. What I do find constructive also is that the Person Weekly Pivot High and Low level is starting to make a higher highs together unlike in May where we saw lower lows.

Current positions include long bias options positions in $FB and $VMW expiring in June and short bias position in the SPX expiring Friday. I do not plan on adding here and may miss out on some nice profits but I will be going on vacation to the mountains of NC and I want to enjoy the vacation and not look at my phone on a consistently. Hopefully the consolidation scenario plays out and stocks will be building nice bases while I’m away from the screen because I am sick of this being sitting scenario and want to put some money to work.

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