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Trading Plan for Dec. 28, 2010

Recs

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December 28, 2010 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): AIT (31.83), NTRI (21.22), MENT (12.01), AMZN (177.15), F (16.33), CERN (93.98), OI (29.67)

Current Short Positions (stop-losses in parentheses)None

BIAS: 43% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), S&P Case-Shiller HPI (9am), Consumer Confidence (10am), State Street Investor Confidence Index (10am)

My Observations and What to Expect:

Futures are are up slightly. 

A number of economic reports due out today, but nothing that I'd consider "market-movers". 

Asian markets are mixed, while European markets are showing a slight bit of strength. 

Volume was extremely light yesterday, and will continue to be so throughout this week. 

As mentioned in yesterday's trading plan, yesterday's gap down was filled, and any other gap-downs we see this week, will likely be met with the same fate. 

China's surprise rate hike, had little impact on the markets yesterday

Yesterday represented the second day of consolidation at the recent highs of this market. 

Any kind of surge in the market, where we rally, say 10 points on the S&P or more, will be a good opportunity to take profits off the table. 

Rally continues to be very healthy, backed by dip buyers, with a steady upward expansion. 

There is about 10 points of give back on the S&P from where it currently sits, and where the nearest level of support lies at 1247, where any sell-off within those parameters keeps the markets and the short-term uptrend intact without question.

Breaking support at 1247, and the 10-day moving average, could usher in short-term weakness in the market.

The dollar is once again looking a bit top-heavy and poised to move lower in the short-term, which should strengthen this market rally. 

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.

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 - use the seasonally light volume, to push markets lower, with the first target being 1247.

For the bulls - break the highs from last Wednesday, and out of the 2-day consolidation. 

Here Are The Actions I Will Be Taking:

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