Trading Plan for March 9, 2011
Current Long Positions (stop-losses in parentheses): CPWR (11.37), TICC (11.90), PGH (12.65), LIZ (5.30), IRC (9.23)
Current Short Positions (stop-losses in parentheses): None
BIAS: 33% Long
Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Wholesale Trade (10am), EIA Petroleum Status Report (10:30am)
My Observations and What to Expect:
Futures are flat heading into the open.
Asian markets were slightly positive with the Nikkei leading the way up 0.6% while Europe is trading flat.
The S&P is actually caught in a short-term triangle where there is a descending trend-line off of the 2/18 highs and the ascending trend-line off of the 2/24 lows. It has narrowed in enough at this point where a significant move in either direction would signify a breakout of the pattern, and perhaps provide clearer insight into the intentions of this market.
As was the case yesterday, it has bee the same for the past couple of weeks now, volume has been rather light of late.
50-day moving average on the S&P looms large for the bears to test, and at 1299 could see a test any day now. Was unable to close above the 20-day moving average yesterday.
Of note, the 10-week moving average on the S&P weekly chart has provided unbelievable support off of the 9/1 rally, and we have yet to see a close below it which currently sits at 1307.
The market does not seem to be neither overbought or oversold - happily situated somewhere in between.
A break of S&P 1294 (last week's lows) would put in a lower-low in the markets, and confirm a downtrend being in place.
For the bears - Like what has been done nearly with ever rally of late, sell it and drop price back below pre-rally levels.
For the bulls - Show some follow through to push the market through some lingering resistance levels as mentioned above.
My conclusion: Hard to take any solid stance in this market, especially with what we seen the last two weeks. At this point, you have to "Play it by ear" and expect the unexpected.
Here Are The Actions I Will Be Taking: