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Trading Plan for Dec. 20, 2010

December 20, 2010 – Comments (1) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): CX (9.76), CERN (93.77), AIT (30.65), NTRI (20.64), SNE (34.28)

Current Short Positions (stop-losses in parentheses): DTV (39.71)

BIAS: 29% Long

Economic Reports Due Out (Times are EST): None.

My Observations and What to Expect: 

Futures are are up moderately.

Asian markets were all down, while European markets are showing strength of about 1%. 

Last week was flat, and allowed the markets to consolidate, as was needed. 

The S&P is set up well in the short-term to see a move higher. 

The 10-day moving average continues to offer support, which is similar to the tendency of the S&P during the Sept/Oct rally. 

New short positions in the portfolio offer a minimal reward at this juncture. Focus should primarily be to the long-side, waiting for price to indicate a change in market sentiment. 

A rally to the 1260 level seems likely at this point. 

1239 is a short-term support level that, should the market break and close below that level, could induce further selling. 

All market indicators that I closely follow, including T2108 and NYSE Reversal Indicator, support the market rallying further in the short-term.

Below 1227, should we break it, the key support level for the S&P would become 1216 - the lows of previous consolidation.

For the bears - need to push the markets below 1239. Expectations at this point must be kept to a minimum, and to foil the bullish intentions of the market, will require baby-steps at this point. 

For the bulls - push the market above 1246 and close above it. May be all the reason the market needs in the short-term to rally into the end of the year. 

Here Are The Actions I Will Be Taking: