Trading Plan for Dec. 2, 2010

Current Long Positions (stop-losses in parentheses): TICC (10.28), RAH (60.75), EQY (16.75), PH (78.95), GIL (30.11), HK (17.63)

Current Short Positions (stop-losses in parentheses): DTV (42.55), EQR (51.15), VPRT (42.37), TIE (17.84), ITT (48.01) GLAD (11.54), FCN (36.74), SNIC (10.40), V (77.61)

BIAS: 7% Short

Economic Reports Due Out (Times are EST): Monster Employment Index (6am), Jobless Claims (8:30am), Pending Home Sales Index (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

• Futures are up moderately ahead of the bell.
• Asian markets were up, and European markets are showing continued strength.
• The 1200 level on the S&P was broken decisively yesterday on average volume. 
• As stated yesterday, the break of 1200 was a game-changer for the bulls, and eerily similar to what we saw back on 9/1. I wouldn’t at all be surprised if we see an extended rally going forward, much like what we saw back in Sept/Oct time frame. 
• Continuation is key for the bulls today. Add another few points to yesterday’s gains, and you will likely see a lot more bears cover their short positions. As it stands right now, there are probably a lot bears still hoping that the bulls cannot hold the gains from yesterday. I see this being very unlikely in happening. 
• Dips will be bought – the momentum has completely shifted in the bulls favor as the S&P broke out of the descending triangle. 
• Support for this market will be at 1200 – the breakout point for the S&P. 
• Resistance will be at the November highs. A break there, could see S&P rally as high as 1260’s and potentially into low 1300’s eventually (best case scenario). 
• Be very careful of getting overly bearish on this market, this rally could last for a while. 
• Bears main goal is to push the market back below 1200 today, and force the bulls to do battle with that critical price level again. 

Here Are The Actions I Will Be Taking:

• Will add two new positions to the portfolio (1 long, 1 short).
• Stop-Loss changed in GIL, will do the same with PH should the market continue to rally today.
• Stopped out of TIE, SNIC and GLAD all at my original stop-loss. 
• Added HK (Long) and V (Short) to the portfolio yesterday, near the close.
• May prematurely close out EQR today, and also replace RAH with a better/more promising stock. 
• Despite being 7% short, it will take very little for the market to flip my portfolio into a bullish one, since most of my short positions are near their stop-losses. 
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.