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Trading Plan for Jan 6, 2011

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January 06, 2011 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): BZ (7.86), GS (169.80), ATML (12.21), GNK (14.37), MI (6.77), DF (8.58), LSI (5.91)

Current Short Positions (stop-losses in parentheses)None

BIAS: 49% Long

Economic Reports Due Out (Times are EST): Monster Employment Index (6am), Jobless Claims (8:30am), Treasury STRIPS (3pm)

My Observations and What to Expect:

Futures are showing moderate strength heading into the open.

Asian and European markets are both showing strength in their respective markets. 

Despite the heavy selling at the open yesterday, the market managed to close at new rally-highs. 

Current trend-line was maintained as well as the 10-day moving average. 

Volume in line with previous two day's volume reading. 

10-day moving average and existing trend-line are marching upwards in near unison - which is currently at 1262 on the S&P. 

Nice bullish engulfing candle pattern formed over the past two trading sessions. 

1276 is starting to provide some short-term resistance - but nothing that I would call 'significant' at his point.

The more long-term trend-line dating back to 9/1 currently has support at 1233.

I am still concerned about the similarities to S&P on 11/4, the chart proceeding it, and the type of chart we have now, dating back to late December's consolidation. A good, strong rally today, would be a reason to take a lot of profits off the table. 

Gold, Dollar and Equities relationship seems to have problems with its traditional correlation. Still a lot of mixed signals among these three classes. 

Any break below recent consolidation (1250 or less on the S&P) would represent a lower-low in this market.

For the bears - Keep the market from advancing or at least from closing above 1276 - doing so strengthens the resistance of the S&P at this price level. 

For the bulls - Capitalize off of yesterday's rally off the lows, and push the market higher, and away from the trend-line, which is typical of strong trending markets, that it has been hugging of late. 

Here Are The Actions I Will Be Taking:

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