Trading Plan for Dec. 21, 2010

Current Long Positions (stop-losses in parentheses): CX (10.04), CERN (93.77), AIT (30.65), NTRI (20.64), SNE (34.28), MENT (11.74), AMZN (177.15)

Current Short Positions (stop-losses in parentheses): DTV (39.71)

BIAS: 43% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am)

My Observations and What to Expect:

• Futures are are up moderately.
• Asian markets were on average up about 1.5% and European markets are showing strength ranging between .5-.8%.
• Despite closing with another doji yesterday, and only up a minimal amount, the market, nonetheless, closed above 1147, which should reinvigorate the bulls to push this market higher in the short-term. 
• The close at 1147 on the S&P yesterday represented fresh rally highs. 
• The S&P continues to follow the 10-day moving average higher, which at this point should also be considered a barometer on the health of this current leg-up in the market.
• The manner in which this market is rallying is very healthy as there are few dramatic price swings in either direction. Despite how nice large scale rallies are, they subsequently invite huge price corrections (think of it in terms of a rubberband). 
• A rally to the 1260 level seems likely at this point.
• Continue to watch the short-term support level of 1239 – a break could be the first clues of near-term weakness in this market. 
• All market indicators that I closely follow, including T2108 and NYSE Reversal Indicator, support the market rallying further in the short-term.
• Below 1227, should we break it, the key support level for the S&P would become 1216 – the lows of previous consolidation.
• For the bears – Sell-off the likely gap up today, and close below yesterday’s lows – doing so will create a bearish engulfing candle pattern. 
• For the bulls – Now that 1247 has been broken, begin pushing price levels to new resistance levels in the 1260’s on the S&P. 

Here Are The Actions I Will Be Taking:

• May add 1-2 additional position to the portfolio today.
• Stop losses in CX has been tightened to 10.04
• Will be closely watching the price action in Ford (F) for a possible breakout entry.
• Added AMZN at $181.85 and MENT at $12.15 yesterday.
• Closed out my position in CERN yesterday for a 2.8% gain and stopped out DTV (finally) for a 5.1% gain. 
• CX at or around $10.50 level, would likely be cause for me to take half my position off the table. 
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.