Current Long Positions (stop-losses in parentheses): OI (29.94), EMN (81.47), APOL (38.22), BTU (61.85), NVDA (15.49), BZ (7.83), GS (166.30), BCSI (29.37)
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), Factory Orders (10am), FOMC Minutes (2pm).
My Observations and What to Expect:
- Futures are showing some slight follow-through on yesterday’s price action.
- Asian and European markets, once again, saw a lot of strength.
- S&P did a great job, despite some afternoon weakness, of keeping most of its gains, and more importantly breaking out and staying above recent market consolidation.
- Not much in the way of near-term resistance, but dating back to 2008, the market could see some resistance between 1271 and 1276.
- One thing that I would be very careful of is the similarities between this rally, and the rally from 11/4 and the selling that occurred thereafter. If we are heading in that direction, you need to be careful about getting too heavily long in your portfolio at this point.
- Yesterday’s rally was right off of the 10-day moving average.
- Volume finally reappeared as the S&P saw an above average amount.
- 9/1 and 12/1 rallies saw descent follow-follow through in price action the following day.
- Recent consolidation has allowed for the S&P upward trend-line to flatten out some which was healthy for the sustainability of the trend itself (steeper trend-lines can often lead to much quicker and sudden corrections).
- I am growing more concerned by the recent trading relationships between dollar, gold and equities. A divergence worth keeping an eye on.
- Any break below recent consolidation (1250 or less on the S&P) would represent a lower-low in this market.
- For the bears – Not much in terms of near-term price resistance to lean on, so the bears need to begin halting further upward movement, and start a pullback that will create a future price barrier for equities.
- For the bulls – hold the gains from yesterday, and provide some follow through over the next 1-2 sessions, that will lead the bears to further cover their positions.
Here Are The Actions I Will Be Taking:
