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Trading Plan for Dec. 22, 2010

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December 22, 2010 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): CX (10.49), AIT (31.49), NTRI (20.64), SNE (35.03), MENT (11.74), AMZN (177.15)

Current Short Positions (stop-losses in parentheses)None

BIAS: 47% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), GDP (8:30am), Corporate Profits (8:30am), Existing Home Sales (8:30am), FHFA House Price Index (10am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

Futures are are flat heading into the open. 

Asian and European markets are trading flat/mixed.

Volume  will continue to dramatically fall off in the days ahead as  Christmas is only days away. Friday the market is closed. 

The market continues to make new rally-highs hitting 1254 yesterday, and is quickly approaching a resistance zone in the 1260's. 

The market's rally continues to be very healthy and orderly, creating an environment for consistent and steady gains, with pullbacks that are contained and typically bought on the dip. 

The lows from 12/15 and 12/16 represent, in my opinion, the "higher-lows" in this recent market rally, and a break below them at 1232, would significantly stall this market's upward progression and potentially invite a new trend to the downside. 

The S&P continues to follow the 10-day moving average higher, which at this point should also be considered a barometer on the health of this current leg-up in the market.

The next target for this market is to reach into the 1270's

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 - A sell-off significant enough that at least brings the market back to its current trendline. A break of the trendline would hamper the bull's efforts.

For the bulls - Now that 1247 has been broken, begin pushing price levels to new resistance levels in the 1260's on the S&P.

Here Are The Actions I Will Be Taking:

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