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Trading Plan for December 7, 2010



December 07, 2010 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): VMW (83.70), RRC (44.59), FINL (18.60), ATVI (11.93), APOG (11.56), BIDU (105.80)

Current Short Positions (stop-losses in parentheses)DTV (41.09), GOOG (590.10)

BIAS: 18% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Consumer Credit (3pm)

My Observations and What to Expect:

Futures are up strong and could see an open up 1% from yesterday's close. 

Asian markets were mixed, but European markets were up strong to the tune of 1-2%

As of this trading plan, the market is positioned to gap above the critical 1227 price level acting as resistance from last month. This is a very strong indication that the market will manage to hold the day's gains above the 1227 level. 

For the time being, yesterday looks to be the short-term pullback we were looking for. If the market holds the gains today, and more importantly 1227, we should see a multi-day rally from here before getting another pullback. 

Not a lot of resistance in the near-term for the markets. A small bit of resistance at 1255, but the more significant resistance levels lie around 1270-1290. So this market has a lot of room to run in the near-term. 

Yesterday's volume was very light, which is good for a pullback day. 

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

Dip buying will continue to be the name of the game for traders. 

Dollar failed to hold the trendline, and is positioned to move back down to its November lows. 

For the bears - push the market below 1227. Failure to do so will ignite a fury of stops. 

For the bulls - do not break the session lows after the first hour of trading, at any point, and move well beyond the 1227 level on strong volume. 

Here Are The Actions I Will Be Taking:

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