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Trading Plan for Nov. 12, 2010

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November 12, 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 (111.99), SPY (119.90), CTXS (64.13), MENT (11.08), MON (61.20)

Current Short Positions (stop-losses in parentheses)None

BIAS: 73% Long

Economic Reports Due Out (Times are EST): Consumer Sentiment (9:55am)

My Observations and What to Expect:

Futures are down significantly, but has managed to bounce off of its overnight lows. 

Asian markets closed well below 1% across the board, European markets are down, but have managing to rally substantially off of its lows.

S&P once again bounced after testing the 10-day moving average, and the trend-line that began in late August. Strong sign of strength by the market. 

S&P stands poised, yet again, to test the 10-day moving average and August trend-line. 20-day moving average is also in play, which the market has not traded below since 9/1.

Today marks the first day of QE2. The full schedule can be found here

One big question surrounding Wall Street is whether QE2 will represent a "sell-the-news" type of event. 

A lot of volatility in overnight futures trading should be an alarm to traders to be very careful heading into the open. 

A doji hammer candle formed yesterday, further signifies that buyers continue to "buy-the-dip". 

One lesson that bears should have learned this year is that when you have profits - take 'em. Don't let the inevitable bounce wipe those gains out. 

1227 represents a near-term resistance level for the bulls while 1275 on the (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 was another failed opportunity by the bears to drive this market lower, in some sense, the bulls came away from yesterday's market session a bit more emboldened. Today, with the early morning weakness in the markets, the bears, need to push this market lower, and close at the day's lows, and below the 10-day moving average. 

Actions I Will Be Taking

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