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Trading Plan for Dec. 30, 2010

December 30, 2010 – Comments (1) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): AIT (31.83), MENT (12.01), CERN (93.98), OI (29.94), EMN (81.03), APOL (37.66), SCSS (9.07)

Current Short Positions (stop-losses in parentheses): None

BIAS: 35% Long

Economic Reports Due Out (Times are EST): Jobless Claims (8:30am), Chicago PMI (9:45am), Pending Home Sales Index (10am), EIA Natural Gas Report (10:30am), Farm Prices (3pm)

My Observations and What to Expect:

Futures are are up slightly.

Jobless claims, should they beat expectations could give the market a much  need boost out of this  4-day lull it has been in. 

Asian and European markets are seeing a descent amount of weakness in trading today. 

Volume continues to dry up, and will not see a pick-up until next week.

S&P continues to hold its trend-line upwards, but is currently lacking any momentum, with the Christmas  and New Year's holidays, there is little motivation to push this market higher. 

Despite the lack of movement upwards, in particular the light volume, the bears seem unable to take advantage of this and send prices lower. 

The trend of late in the market has been to sell-off any premarket gains, at the open, and remain there a bit, before trending back into positive territory by the end of the day. 

The T2108 and the NYSE Reversal Indicator that I use, shows that the market has a lot of upward momentum remaining in it. Whereas more traditional indicators show the markets being well-overbought. For me, the latter doesn't bother me all that much, since markets are able to run in overbought territory much longer than we deem as being reasonable.

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

There are about 13 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.

For the bears - Push the market below the 10-day moving average for starters - we have yet to dip below this level, even on an intraday basis, the entire month.

For the bulls - break the highs from last Wednesday, and out of the 4-day consolidation pattern.

Here Are The Actions I Will Be Taking: