Trading Plan for Dec. 13, 2010
Current Long Positions (stop-losses in parentheses): VMW (86.90), BIDU (105.80), ESV (48.75), CX (9.56)
Current Short Positions (stop-losses in parentheses): DTV (40.50)
BIAS: 21% Long
Economic Reports Due Out (Times are EST): None
My Observations and What to Expect:
Futures are up slightly heading into the open.
Asian markets were mixed while European markets are showing some strength.
We are well-off the 1227 support level, with the next level of resistance between 1255 and 1260.
The current rally has been more of a slow melt-up.
While there is still more room for the bulls to run in the days and weeks ahead, I think the upside is limited to about 20-30 points higher before we see a period of consolidation.
Friday was the most significant move that we saw last week, but it also represented the lowest level of volume on an up-day (out of four).
Below 1227, should we break it, the key support level would be come 1216 - the lows of previous consolidation.
Despite being overbought in the short-term, bullish rallies have the ability to remain so, far longer than we expect it to.
The current rally on the daily charts has the makings of what we saw back on 9/1 which rallied for over two months.
Dip buying will continue to be the name of the game for traders.
Dollar looks more and more like it is preparing for another leg down.
For the bears - Push back below 1227 and close beneath it, is an absolute must, with a goal thereafter of 1216 then 1200.
For the bulls - At the very least, consolidate near recent highs, with a desirable goal being a push to the 1260's.
Here Are The Actions I Will Be Taking: