Trading Plan for July 20, 2010

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

Current Short Positions (stop-losses in parentheses): ESV (42.84), MR (32.34), WTFC (37.71), SLAB (44.80), CERN (82.08), ALB (43.59), HIBB (26.65),  WRC (40.95), QQQQ (45.83), SCHN (44.33)

BIAS: 106% Short

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Housing Starts (8:30am), Redbook (8:55am)

My Observations and What to Expect:

• Futures down strong heading into the open
• Housing Starts will likely have minimal impact on the market - focus is on earnings.
• IBM and TXN reported numbers that the Street clearly was displeased with.
• Bad numbers from Goldman Sachs (GS) will undoubtedly trigger some major selling - probably the reason right now that the market hasn't reacted more to the IBM and TXN earnings than what they already have.
• So far this earnings season has been more about selling the earnings regardless of the numbers.
• Bear's flood gates haven't been completely opened...yet.
• Gap down worries me somewhat - definitely won't see another flat-line market like we did yesterday.
• Will be watching the morning highs to see if the bulls attempt to fill the gap.
• Overall this market has everything it needs to sell-off in a big, big way today.
• [Update] - Goldman reported treacherous numbers, and I'd fully expect this market to get real ugly today.

Actions I Will Be Taking:

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