Current Long Positions (stop-losses in parentheses): BZ (8.01), MI (6.85), MWV (26.37), CLMT (21.53)
Current Short Positions (stop-losses in parentheses): None
BIAS: 28% Long
Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Wholesale Trade (10am)
My Observations and What to Expect:
- Futures are showing moderate strength heading into the open.
- Asian markets had a slight positive bias and European markets are showing strength in excess of 1%.
- S&P poised to challenge recent highs at 1278.
- Current short-term trend-line has flattened some over the past two days due to intra-day dips. Not a bad thing, just the steepness of the trend-line itself cannot be held, and had to be moderated some.
- Be careful today of a failed test of recent highs that could create a strong intra-day reversal.
- Should we break through 1278, mid-1280’s are very achievable.
- Continue to watch the market’s relationship with the 10-day moving average, as the support level is becoming increasingly vulnerable over the past two days. Should we end up closing below the 10-day, watch how the market responds to the 20-day moving average, just underneath it, currently at 1257.
- The creation of a “lower-low” in this market would be if there is a break below 1251 and would essentially stall the trend out.
- No edge seen when it comes to volume. Been nearly identical each day this year, with the exception of yesterday which saw a small dip.
- Yesterday showed that dip-buying continues to persist, and that the bears do not have enough selling power, to get past it at this point.
- The more long-term trend-line dating back to 9/1 currently has support at 1234.
- For the bears – The 10 & 20 day moving averages are within reach, and this may be one of the better opportunities to drive this market down and cause some technical damage on the charts.
- For the bulls – Break recent resistance at 1278 today.
Here Are The Actions I Will Be Taking:
