Trading Plan for January 4, 2011
Economic Reports Due out (Times are EST): MBA Purchase Applications (7am), ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Factory Orders (10am)
Premarket Update (Updated 9am eastern):
Futures are slightly down.
Asian markets were mixed ranging from -0.8% up to +2%
Europe is down on average about 0.8% so far in early morning trading.
Technical Outlook (S&P):
The S&P took out two significant support levels yesterday. First they broke December's highs and secondly it just barely finished above the neckline from the major head and shoulders price pattern of last year.
Volume picked up noticeably in comparison to what we saw last week.
The next battle zone for the bulls will be to take out the 10/27 highs at 1293
Quick stat to remember, when the S&P finishes higher during the first week of trading in a new year, then the odds say there is an 86% chance the market finishes higher on the year.
One negative to take away from the price action yesterday was the fact that the S&P closed lower than it opened (look at SPY), which does cast some doubt on the rally's legitimacy.