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Trading Plan For Dec. 3, 2010

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December 03, 2010 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): PH (78.95), HK (18.56), VMW (82.30), RRC (41.65), NVLS (30.05)

Current Short Positions (stop-losses in parentheses)DTV (41.29), V (77.61)

BIAS: 24% Long

Economic Reports Due Out (Times are EST)

My Observations and What to Expect:

Futures are flat heading into the open. 

Both Asian and European markets were mixed in trading. 

1200 is quickly being left in the dust and the new battle ground will be the 52-week highs set in November at 1227.

The current rally has the makings of what we saw back on 9/1 which rallied for  over two months. 

Yesterday's rally, on similar volume to that of Wednesday's rally, offered the continuation that the bulls were seeking, and further legitimized this market rally. A push above 1227, would likely trigger another wave of short covering. 

Going forward I would expect the dip-buying to be back in play for investors. 

Dollar is at an inflection point on its current upward trend. A push below the trend would signal further bullishness for the broader markets, A bounce followed by another leg up, would pose a major problem for the bulls. 

For the bears - defend the resistance at the November highs. A break there, could see S&P rally as high as 1260's and potentially into low 1300's (best case scenario).

For the bulls - close above the aforementioned resistance and push the rally into overbought territory. 

Here Are The Actions I Will Be Taking:

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