Trading Plan for November 8, 2010
Current Long Positions (stop-losses in parentheses): TICC (10.21), NFLX (165.00), MCD (76.92), QID (11.92)
Current Short Positions (stop-losses in parentheses): SBUX (31.37)
BIAS: 4% Short (-20% short considering the leverage in QID)
Economic Reports Due Out (Times are EST): None
My Observations and What to Expect:
Futures are showing some weakness
Asian markets were up about 1%, while European markets are trading with a slight negative bias.
Today sets up as an excellent pullback opportunity. Wait for the market to give back some gains here before jumping into anything on the long-side.
With the upside break through of the 200-WEEK moving average, history suggests that this leads to a major rally in the markets.
Next level of resistance for the bulls is 1275 on the S&P.
Initial support for the S&P on a pull-back lies at the April highs which is 1219 or six points below where it is currently trading.
Absolutely no reason to be short except for the very near-term that indicates the market needs a small pullback before advancing any further. Any significant position building to the short side is a reckless use of portfolio capital.
No scheduled news releases due out today that could impact the market.
Wait for some weakness in this market before adding new long-positions, don't try to chase after this market at all.
For the bears look for a a gap open that is below Friday's lows with further selling thereafter, which would be ideal, and at the least, some selling today that begins to erase Thursday's gains.
Here Are The Actions I Will Be Taking: