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Trading Plan for Jan 27, 2011

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January 27, 2011 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): QID (10.49)

Current Short Positions (stop-losses in parentheses)EXPD (55.26), DKS (35.79)

BIAS: 21% Short (counting QID and SDS as shorts)

Economic Reports Due Out (Times are EST): Durable Goods Orders (8:30am), Jobless Claims (8:30am), Pending Home Sales Index (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

Futures are slightly positive heading into the open. 

Asian markets saw gains as much as 1.5% while European markets are seeing moderate gains ranging between 0.3% to 0.6%.

It usually takes the market about 1-2 days following the FOMC Statement release, to digest it contents and be appropriately reflected in price. 

Volume though not heavy, has been increasing each of the past two days. 

1300 on the S&P is now the near-term overhead resistance for the bulls. Yesterday, there was five intra-day attempts to break and close above this mark, and each time, it was met with selling. 

There are a number of bearish divergences in this market that is going, for the most part, ignored. 

The 10-day moving average continues to hold for the S&P, closing below it (and just barely) once in the past 39 trading session. 

Also of note, the market made a new recent high, which keeps the existing uptrend in place. 

Dip buyers continue to provide incredible support to this market, where even the strongest of sell-offs get bought up in afternoon trading.

The potential bear-flag pattern mentioned yesterday, is null and void with close above recent highs. 

Nasdaq continues to look much weaker than the S&P and is still trading on the underside of the August trend-line. 

1261 represents the short-term 'higher-low' on the daily charts.

For the bears - Keep the bulls from breaking above 1300 - its really their last stand in the short-term. 

For the bulls - Break 1300 and close well above it. 

Here Are The Actions I Will Be Taking:

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