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Trading Plan for Nov. 11, 2010

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November 11, 2010 – Comments (0) | RELATED TICKERS: SPY

Current Long Positions (stop-losses in parentheses): TICC (10.28), NFLX (172.58), MCD (77.74), FLIR (28.18), BIDU (107.15), SPY (119.90), CTXS (63.20)

Current Short Positions (stop-losses in parentheses)None

BIAS: 63% Long

Economic Reports Due Out (Times are EST): None - Veterans Day

My Observations and What to Expect:

Futures are trading with moderate weakness after the Cisco earnings report. 

Asian markets were slightly green, while European markets are trying to work their way back into positive territory. 

S&P managed to bounce off of its 10-day moving average, as it has consistently done since bottoming in August. 

Current market weakness, if it persists, will challenge the 10-day moving average, as well as the existing trend-line. A close below the 20-day moving average, would completely change the character of this market. 

Market conditions are no longer overbought. 

With no scheduled economic reports today, the focus will be on Cisco and the G-20 meeting .

Today should be a good opportunity for the bulls to add new long positions to the portfolio on market weakness. 

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.

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.

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

Hammer candle from yesterday in the S&P, is often times a good indication of a short term bottom. 

Bears will be given another opportunity to push this market lower today - their aim should be to finish the day below the 10-day moving average and possibly the trend-line the market is trading off of, all while holding the 61.8% Fibonacci retracement level.

Here Are The Actions I Will Be Taking:

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