Current Long Positions (stop-losses in parentheses): BIDU (105.80), CX (9.76), CERN (90.59), VPHM (17.14), AIT (30.65)
Current Short Positions (stop-losses in parentheses): DTV (40.33)
BIAS: 22% Long
Economic Reports Due Out (Times are EST): Housing Starts (8:30am), Jobless Claims (8:30am), Current Account (8:30am), Philadelphia Fed Survey (10am), EIA Natural Gas Report (10:30am)
My Observations and What to Expect:
- Futures are are mixed.
- Asian and European markets are mixed.
- Yesterday was the first descent amount of selling that we’ve seen since this new buying wave began on 12/1. The last time we saw this selling was on 11/30.
- Recent market activity is helping the market work off its overbought conditions.
- 1227 on the S&P will be extremely important for the bulls to hold. A break below this level, would likely invite further selling.
- Volume was above average yesterday, but will hold judgement on this and wait to see whether the event is isolated or new development indicating a wave of selling that may be on the horizon.
- Typically the first significant “down-day” in a upward trending market (trend beginning 12/1), doesn’t see to much further selling, instead the bulls will often times jump on this sell-off as an opportunity to add to their existing long positions.
- Below 1227, should we break it, the key support level for the S&P would become 1216 – the lows of previous consolidation.
- Dip buying will continue to be the name of the game for traders.
- For the bears – Show follow through on yesterday’s selling, and push the markets below 1227 (only 8 points away).
- For the bulls – Need to keep the selling at bay, and must hold the 1227 level on the S&P.
Here Are The Actions I Will Be Taking:
