Current Long Positions (stop-losses in parentheses): VMW (83.70), RRC (44.59), ATVI (11.93), APOG (11.56), BIDU (105.80), ESV (48.75)

Current Short Positions (stop-losses in parentheses): DTV (40.50), GOOG (590.10)

BIAS: 22% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Quarterly Services Survey (10am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

  • Futures are mixed heading into the open. 
  • Both European and Asian markets are mixed as well. 
  • Yesterday’s trading action was extremely disappointing for the bulls after gapping above the 1227 level, it sold-off in late afternoon trading, failing to hold the important price support level. 
  • If you look at the weekly chart, we are essentially stuck in a sideways market pattern between 1186 and 1227 – a 41 point price range. 
  • Volume was extremely high yesterday, despite finishing flat. 
  • As a result of the action seen yesterday, we are now looking at a shooting star pattern, that can be a trend-killer. The last couple of times we have had one on the S&P, we’ve seen consolidation follow, which would seems like a high-possibility at this point. 
  • I am on “high-alert” for a possible change in the short-term trend in this market. I recommend traders to the long-side show a lot of caution as well. While I am not yet willing to close out my long positions right now, I will not hesitate to close out my long positions should we see further selling into today. 
  • The current rally on the daily charts still has the makings of what we saw back on 9/1 which rallied for over two months.
  • Dip buying will continue to be the name of the game for traders.
  • Dollar and gold seem to be once again trading inversely to each other. Dollar rebounded yesterday, but still did not manage to improve itself from a technical standpoint. 
  • For the bears – hold on to the late day sell-off, and push the markets lower today. Doing so will cause the bulls to reconsider the legitimacy of this rally. 
  • For the bulls – reclaim the 1227 level on the S&P and be sure to close above it. 

Here Are The Actions I Will Be Taking:

  • Will look to add some morning breakout plays to the portfolio today.
  • DTV is my lone short position, but may add more should the market continue to trade weak.
  • Tightened the stop-losses in DTV. 
  • Stopped out of GOOG and ATVI for a loss. Closed out the remaining position in RRC for some descent gains. 
  • Added ESV to the portfolio.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.

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