Trading Plan for Dec. 23, 2010
Current Long Positions (stop-losses in parentheses): AIT (31.49), NTRI (20.98), MENT (11.84), AMZN (177.15), F (16.33)
Current Short Positions (stop-losses in parentheses): None
BIAS: 36% Long
Economic Reports Due Out (Times are EST): Durable Goods Orders (8:30am), Personal Income and Outlays (8:30am), Jobless Claims (8:30am), Consumer Sentiment (9:55am), New Home Sales (10am), EIA Natural Gas Report (10:30am)
My Observations and What to Expect:
Market will be closed tomorrow.
Futures are are slightly down heading into the open.
Asian markets were down slightly and European markets are trading mixed.
Volume will be very light today as it is the last trading day prior to Christmas.
The S&P sits right under the resistance area found in the 1260's while maintaining its current trend line.
Should a pullback be in order, a healthy one, would be to the 1246 level on the S&P, where there is some short term support represented by the previous higher-high.
The Dollar continues to look confused making lower-lows and higher highs, with it currently in the process of doing the latter. This would be considered a divergence in the market, that I'll be paying close attention to. Another 1/2 percent move upwards, could be a problem for stocks.
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.
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 - Push the market back to the 1246 level, and then start chipping away at support.
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: