Trading Plan for Jan 28, 2011
Current Long Positions (stop-losses in parentheses): SSO (48.97), ZBRA (38.10)
Current Short Positions (stop-losses in parentheses): None
BIAS: 14% Long
Economic Reports Due Out (Times are EST): GDP (8:30am), Employment Cost Index (8:30am), Consumer Sentiment (9:55am)
My Observations and What to Expect:
Futures are slightly negative heading into the open.
Asian markets traded lower (Nikkei -1.1%), while European markets trade in mixed fashion.
S&P still struggling to close above 1300, though did breach the mark on intraday trading.
Price on the S&P remains nicely situated within the narrow trading channel and above all the major moving averages.
Volume was low yesterday, and the market is back in overbought territory.
Today's GDP report will shape market action.
Yesterday marked a decisive close higher, which all but nullified the bear's short-term chances of driving this market lower.
Unlike the prior market session, the bulls managed several times to push the S&P above 1300, but need to ultimately close above the 1300 level.
Bearish divergences in the RSI, MACD, and CCI, are concerning for me, as they are making lower-highs while the market is making higher highs.
The 10-day moving average continues to hold for the S&P, closing below it (and just barely) once in the past 40 trading session.
Also of note, the market made a new recent high, which keeps the existing uptrend in place.
Dip buying continues to be a formidable force in this market.
1261 represents the short-term 'higher-low' on the daily charts.
For the bears - Hold Resistance at the 1300 on the daily charts. Don't let the bulls close above that important psychological level.
For the bulls - Need to close well above 1300 in order to put doubts to rest.
Here Are The Actions I Will Be Taking: