Current Long Positions (stop-losses in parentheses): TICC (10.28), NFLX (165.00), MCD (76.92), QID (11.92)
Current Short Positions (stop-losses in parentheses): SBUX (31.37)
BIAS: 7% Long (-10% short considering the leverage in QID)
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 some strength after rallying off of its overnight lows on European market strength.Â
- Asian markets were mixed, while European markets are showing positive gains across the board.Â
- Like yesterday, the market still needs to come back down some as it is currently overextended making a a trade at this point filled with more risk than reward. Â
- With the upside break through the 200-WEEK moving average, history suggests that such an event leads to a significant long-term rally in the markets.
- 1275 on the S&P (give or take a few points) represents the next area of resistance on the charts.Â
- Also causing resistance in the very near term is the fact that we are at the 61.8% Fibonacci Retracement level from the Oct. ’07 highs to the March ’09 lows.Â
- Initial support for the S&P on a pull-back lies at the April highs which is 1219 or six points below where it is currently trading. We tested this level yesterday, and bounced quickly thereafter.Â
- I’d continue to urge people against shorting the market on the premise that the market is “too-high” Â or “economy is awful”. There is no reason right now to be heavily shorting with the belief that this market will see an extended move downwards.Â
- No major economic news reports scheduled and earnings season is starting to wind down.Â
- Bear’s aim is to hold the Fibonacci retracement levels, and push the market down closer to the 10-day moving average and ultimately challenge those price levels (1198).
Actions I Will Be Taking:
