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Trading Plan for Jan 18, 2011

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January 18, 2011 – Comments (0) | RELATED TICKERS: SPY

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

Current Short Positions (stop-losses in parentheses)None

BIAS: 100% Cash

Economic Reports Due Out (Times are EST): Empire State Manufacturing Survey (8:30am), Treasury International Capital (9am), Housing Market Index (10am)

My Observations and What to Expect:

Futures are mixed, with the Nasdaq down over 15 points due to Steve Jobs going on medical leave.

Asian markets were flat, while European markets show strength in excess of 1%.

Steve Jobs going on medical leave, and Apple (AAPL) reporting after the bell, will be the focus of traders today. 

Apple will act as a major drag on Nasdaq today and technology stocks in general. 

A lot of reasons to believe the market will see some selling pressures in the days ahead. Particularly the overhead resistance in terms of price channels and bollinger bands that typify a pullback scenario - see my post from yesterday

With that said, it appears that risk is increasing by a large amount at this juncture while reward looks greatly limited at this point. 

A pullback to 1270 would be ideal (lower, short-term price channel), to help the market relieve some of the overhead pressures that it is currently facing. 

There should be some support at 1278 on the S&P.

A strong move out of the upper price band, could see the S&P push higher up to 1310. 

But expect some resistance at 1300 - a lot of talk about the market reaching that milestone, and now that it has, we could see a flood of profit takers hit the wires. 

1261 represents the short-term 'higher-low'

Volume was slightly stronger on Friday then previous sessions. An increase today from Friday, on market strength would further encourage the bulls. 

The more long-term trend-line dating back to 9/1 currently has support at 1247.

For the bears - Use the overbought nature of this market and the weakness created by AAPL today, to pounce on the bulls. 

For the bulls - Breakout of the short-term price band overhead, and make a move for 1300, and close above the critical milestone.

Here Are The Actions I Will Be Taking:

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