Current Long Positions (stop-losses in parentheses): VMW (83.70), RRC (44.59), FINL (18.60), ATVI (11.93), APOG (11.56), BIDU (105.80)
Current Short Positions (stop-losses in parentheses): DTV (41.09), GOOG (590.10)
BIAS: 18% Long
Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Consumer Credit (3pm)
My Observations and What to Expect:
- Futures are up strong and could see an open up 1% from yesterday’s close.
- Asian markets were mixed, but European markets were up strong to the tune of 1-2%
- As of this trading plan, the market is positioned to gap above the critical 1227 price level acting as resistance from last month. This is a very strong indication that the market will manage to hold the day’s gains above the 1227 level.
- For the time being, yesterday looks to be the short-term pullback we were looking for. If the market holds the gains today, and more importantly 1227, we should see a multi-day rally from here before getting another pullback.
- Not a lot of resistance in the near-term for the markets. A small bit of resistance at 1255, but the more significant resistance levels lie around 1270-1290. So this market has a lot of room to run in the near-term.
- Yesterday’s volume was very light, which is good for a pullback day.
- The current rally 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 failed to hold the trendline, and is positioned to move back down to its November lows.
- For the bears – push the market below 1227. Failure to do so will ignite a fury of stops.
- For the bulls – do not break the session lows after the first hour of trading, at any point, and move well beyond the 1227 level on strong volume.
Here Are The Actions I Will Be Taking: