Current Long Positions (stop-losses in parentheses): VMW (86.90), BIDU (105.80), ESV (48.75), CX (9.56)
Current Short Positions (stop-losses in parentheses): DTV (40.50)
BIAS: 21% Long
Economic Reports Due Out (Times are EST): None
My Observations and What to Expect:
- Futures are up slightly heading into the open.
- Asian markets were mixed while European markets are showing some strength.
- We are well-off the 1227 support level, with the next level of resistance between 1255 and 1260.
- The current rally has been more of a slow melt-up.
- While there is still more room for the bulls to run in the days and weeks ahead, I think the upside is limited to about 20-30 points higher before we see a period of consolidation.
- Friday was the most significant move that we saw last week, but it also represented the lowest level of volume on an up-day (out of four).
- Below 1227, should we break it, the key support level would be come 1216 – the lows of previous consolidation.
- Despite being overbought in the short-term, bullish rallies have the ability to remain so, far longer than we expect it to.
- The current rally on the daily charts has the makings of what we saw back on 9/1 which rallied for over two months.
- Dip buying will continue to be the name of the game for traders.
- Dollar looks more and more like it is preparing for another leg down.
- For the bears – Push back below 1227 and close beneath it, is an absolute must, with a goal thereafter of 1216 then 1200.
- For the bulls – At the very least, consolidate near recent highs, with a desirable goal being a push to the 1260’s.
Here Are The Actions I Will Be Taking:
