Trading Plan for January 9, 2011
Economic Reports Due out (Times are EST): Consumer Credit (3pm)
Premarket Update (Updated 9am eastern):
Futures are slightly higher, but 10 points off of the overnight lows.
Asian markets were all over the board from -1.2% up to +1.5%
Europe is trading mixed/flat.
Technical Outlook (S&P):
The last three days have represented more consolidation than anything else, with slight upward momentum.
The markets are barely dipping into overbought territory.
Volume tapered off on Friday, continuing the pattern of sub-par volume readings.
A move below 1275, will move the S&P back below the head and shoulder neck line that was formed last year (but still in play).
If price sells off hard and goes down to 1252, it would put price back inside of the Downward trend-line off of the 7/7 highs.
On the 30 min chart, the S&P is bull-flagging at the highs. Break Friday's highs, and we could see a nice move higher. A move below 1275-6 area would end the short-term uptrend it is currently on.
Best case scenario for the bulls today would be to break 1292, which would represent the October highs.
We still have a gap higher from Tuesday that has seen the bears attempt to fill, but failed the last three days.
The S&P finished higher during the first week of trading in this new year, which the historical odds say there is an 86% chance the market finishes higher on the year. We finished higher last year in the first week of trading too, but closed unchanged for the year.