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Trading Plan for Nov. 10, 2010

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November 10, 2010 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): TICC (10.28), NFLX (165.00), MCD (76.92), QID (11.92), FLIR (27.19)

Current Short Positions (stop-losses in parentheses)None

BIAS: 33% Long 

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), International Trade (8:30am), Jobless Claims (8:30am), Import and Export Prices (8:30am), EIA Natural Gas Report (10:30am), EIA Petroleum Status Report (11am), Treasury Budget (2pm)

My Observations and What to Expect:

Futures are flat

Asian markets were mixed and European markets are showing some weakness so far. 

Yesterday's sell-off went a long ways to work off overbought conditions. 

In a strong market rally, you can't expect much in the way of pullbacks, instead, you need to look for pullbacks that fall within the context of the existing trend, and how much it can pullback without actually violating the trend. 

Yesterday's pullback was more about profit taking than anything else, providing a good opportunity to start bolstering the portfolio with long positions in preparation for the next leg up. 

Assuming that this market isn't turning over, max-pain for bulls if this sell-off continues is around 1200, which represents the 10-day moving average. 

1275 on the S&P (give or take a few points) represents the next area of resistance on the charts.

Also causing some resistance in the very near term is the fact that we are at the 61.8% Fibonacci Retracement level from the Oct. '07 highs to the March '09 lows.

A break of the support at 1219 (April Highs) isn't overly concerning, prior to breaking it, this price level offered very little price resistance. 

Jobless claims today (one day early due to Veteran's Day tomorrow).

Yesterday's sell-off did nothing to change the upward trending character of this market.

Bear's aim is to hold the Fibonacci retracement levels, and push the market below the 10-day moving average currently at 1200 on the S&P.

Actions I Will Be Taking:

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