Current Long Positions (stop-losses in parentheses): AIT (31.49), NTRI (20.98), MENT (11.84), AMZN (177.15), F (16.33)

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

BIAS: 32% Long

Economic Reports Due Out (Times are EST): None

My Observations and What to Expect:

  • Futures are are down moderately after China announced a surprise rate hike of 25 basis points. 
  • Asian markets are mixed to slightly green, while European markets are showing a good amount of weakness. 
  • I expect volume to be relatively light throughout the week. 
  • Down-gaps in the market between Christmas and New Years have a strong propensity for being filled intra-day.
  • Chinese rate hike is and will be what has the biggest influence on the market today. 
  • There is about 10 points of give back on the S&P from where it currently sits, and where the nearest level of support lies at 1247. Despite the pre-market weakness, we are still looking at opening up within that range, which keeps the markets and the short-term uptrend in tact without question. 
  • Breaking support at 1247, and the 10-day moving average, could usher in short-term weakness in the market. 
  • The Dollar continues to look confused making lower-lows and higher highs, with it currently in the process of trying to do the latter, yet again. A move above 81.53 (/dx) could be a glaring divergence for stocks in general. 
  • The lows from 12/15 and 12/16 represent, in my opinion, the “higher-lows” in this recent market rally, and a break below them at 1232, would significantly stall this market’s upward progression and potentially invite a new trend to the downside.
  • 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 – use the surprise Chinese rate hike announcement to push and close below the 1246 level, with a break below 1232 being the ‘best-case scenario’. 
  • For the bulls – hold short-term support at 1246, and fill the gap-down and rally higher, even if only a little bit. 

Here Are The Actions I Will Be Taking:

  • May add 1 or 2 new positions to the portfolio. 
  • Stop-Losses remain “as-is”. 
  • Stocks in my portfolio that are on my “chop-block” should their weakness continue are AMZN and F. 
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.

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