Trading Plan for Dec. 30, 2010

Current Long Positions (stop-losses in parentheses): AIT (31.83), MENT (12.01), CERN (93.98), OI (29.94), EMN (81.03), APOL (37.66), SCSS (9.07)

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

BIAS: 35% Long

Economic Reports Due Out (Times are EST): Jobless Claims (8:30am), Chicago PMI (9:45am), Pending Home Sales Index (10am), EIA Natural Gas Report (10:30am), Farm Prices (3pm)

My Observations and What to Expect:

• Futures are are up slightly.
• Jobless claims, should they beat expectations could give the market a much  need boost out of this  4-day lull it has been in. 
• Asian and European markets are seeing a descent amount of weakness in trading today. 
• Volume continues to dry up, and will not see a pick-up until next week.
• S&P continues to hold its trend-line upwards, but is currently lacking any momentum, with the Christmas  and New Year’s holidays, there is little motivation to push this market higher. 
• Despite the lack of movement upwards, in particular the light volume, the bears seem unable to take advantage of this and send prices lower. 
• The trend of late in the market has been to sell-off any premarket gains, at the open, and remain there a bit, before trending back into positive territory by the end of the day. 
• The T2108 and the NYSE Reversal Indicator that I use, shows that the market has a lot of upward momentum remaining in it. Whereas more traditional indicators show the markets being well-overbought. For me, the latter doesn’t bother me all that much, since markets are able to run in overbought territory much longer than we deem as being reasonable.
• Any kind of surge in the market between now and year’s end, where we rally, say 10 points on the S&P or more, will be a good opportunity to take profits off the table.
• There are about 13 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.
• For the bears – Push the market below the 10-day moving average for starters – we have yet to dip below this level, even on an intraday basis, the entire month.
• For the bulls – break the highs from last Wednesday, and out of the 4-day consolidation pattern.

Here Are The Actions I Will Be Taking:

• I’m willing to add 1-2 new positions to the portfolio if the plays are there.
• APOL is setup very nicely to move higher today. Will increase the stop-loss given the chance. 
• Increased the stop-loss in EMN.
• Added APOL at $39.14 at the open yesterday, as well as SCSS at $9.38.
• Closed out my position in AIT (3.4% gain), and MENT (0.8% Gain).
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.