Current Long Positions (stop-losses in parentheses): PH (78.95), HK (18.56), VMW (82.30), RRC (44.59), NVLS (31.78), FINL (18.60)
Current Short Positions (stop-losses in parentheses): DTV (41.12), V (77.61), GOOG (590.10)
BIAS: 4% Long
Economic Reports Due Out (Times are EST): None
My Observations and What to Expect:
- Futures are slightly negative heading into the Monday open.
- Both Asian and European markets are mixed in trading.
- 1200 will act as support for the markets, while 1227 is the major battleground currently between the bulls and bears.
- A pullback or at the very least some consolidation in the markets seems to be in the cards this week, before moving back up again. Typically pullbacks in a strong, trending market are very quick, and don’t give bulls a huge opportunity to jump in at the lower prices they seek.
- Intraday charts, particularly the 30min and 60min on the S&P show a very overextended market.
- A break of the November highs could send the market up into the 1250’s.
- Volume has been average during this three day rally, with Friday’s volume being well below the average – perhaps showing some exhaustion by the bulls.
- The current rally has the makings of what we saw back on 9/1 which rallied for over two months.
- Going forward I would expect the dip-buying to be back in play for traders.
- Dollar failed to hold their trendline, and instead moved much lower instead.
- For the bears – defend the resistance at the November highs and close below the Friday lows.
- For the bulls – pullback/consolidation is a given in the near-term, avoid giving back too much of the day’s gains.
Here Are The Actions I Will Be Taking:
