Trading Plan for Dec. 28, 2010

Current Long Positions (stop-losses in parentheses): AIT (31.83), NTRI (21.22), MENT (12.01), AMZN (177.15), F (16.33), CERN (93.98), OI (29.67)

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

BIAS: 43% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), S&P Case-Shiller HPI (9am), Consumer Confidence (10am), State Street Investor Confidence Index (10am)

My Observations and What to Expect:

• Futures are are up slightly. 
• A number of economic reports due out today, but nothing that I’d consider “market-movers”. 
• Asian markets are mixed, while European markets are showing a slight bit of strength. 
• Volume was extremely light yesterday, and will continue to be so throughout this week. 
• As mentioned in yesterday’s trading plan, yesterday’s gap down was filled, and any other gap-downs we see this week, will likely be met with the same fate. 
• China’s surprise rate hike, had little impact on the markets yesterday
• Yesterday represented the second day of consolidation at the recent highs of this market. 
• Any kind of surge in the market, where we rally, say 10 points on the S&P or more, will be a good opportunity to take profits off the table. 
• Rally continues to be very healthy, backed by dip buyers, with a steady upward expansion. 
• 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, where any sell-off within those parameters keeps the markets and the short-term uptrend intact without question.
• Breaking support at 1247, and the 10-day moving average, could usher in short-term weakness in the market.
• The dollar is once again looking a bit top-heavy and poised to move lower in the short-term, which should strengthen this market rally. 
• 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 seasonally light volume, to push markets lower, with the first target being 1247.
• For the bulls – break the highs from last Wednesday, and out of the 2-day consolidation. 

Here Are The Actions I Will Be Taking:

• May add new positions to the portfolio, particularly EMN, which I will be watching at 83.04. 
• Increased the stop-losses in AIT, NTRI, and MENT.
• Added CERN at $95.67 and OI at the close at $30.87 yesterday. 
• Stocks in my portfolio that are on my “chop-block” should their weakness continue are AMZN, NTRI, F
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.