Current Long Positions (stop-losses in parentheses): None

Current Short Positions (stop-losses in parentheses): None

BIAS: 100% CASH

Economic Reports Due Out (Times are EST): ISM Manufacturing Index (10am), Construction Spending (10am)

My Observations and What to Expect:

  • Futures are up very strong – over 1%.
  • European earnings pushing market higher – HSBC and BNP Paribas in particular. 
  • As Europe goes, so does the U.S Markets.
  • Events in Europe, even those domestic to their own country have more weight than U.S. news apparently.
  • Be weary of trying to fade this gap up – Could run 20 or 30 points if this early morning strength is legit.
  • The Russell and Nasdaq are in strong confirmed bull rallies.
  • Weekly and Daily charts on S&P show two different markets. Weekly charts show a market still heading down (no new higher-highs), while the daily shows a market on the rebound.
  • S&P set to open at 200-day moving average on futures and index. Another challenge looms!
  • Busy week with lots of reports – main one: Employment on Friday.

Actions I Will Be Taking:

  • May consider jumping into XLF above 14.95.
  • Won’t fade the open unless things change considerably ahead of the bell.
  • Look for scalping opportunities today – mainly pullbacks on the rally, likely with TNA or SSO.
  • Could add one additional long position to the portfolio.
  • Don’t want to be too heavy in this market as there is a lot of mixed signals, with what I believe is a slight bias to the upside.

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