Trading Plan for January 3, 2011
Economic Reports Due out (Times are EST): ISM Manufacturing Index (10am), Construction Spending (10am), FOMC Minutes (2pm)
Premarket Update (Updated 9am eastern):
Futures are up over 1% heading into the open but off of their highs.
Asian markets were experiencing gains between 0.7% and 2.4%
Europe is showing mixed results in trading so far today
Technical Outlook (S&P):
The S&P is poised to break away from the pack this morning, and away from the downward trend resistance level that plagued the markets since 7/7.
There may be some resistance as well at underside of the neckline of the Head and Shoulders that formed from the first 8 months of last year. Resistance is at 1275.
A close above 1269 would be ideal for the bulls as it would also be creating a new higher-high for the market, and provide some additional momentum into the new year.
Today's open will create some much needed separation from price action and the 200-day moving average.
The first trading day as well as the first week of trading traditionally is a gauge on the potential for the rest of the year for the market.
We are well off of overbought conditions.
Volume should pick up this week after low holiday volumes the last two weeks.
Today's strong open, will help, for now, to erase the bearish charts on the 5 & 30 minutes time frames.