Trading Plan for Jan 18, 2011

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

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

BIAS: 100% Cash

Economic Reports Due Out (Times are EST): Empire State Manufacturing Survey (8:30am), Treasury International Capital (9am), Housing Market Index (10am)

My Observations and What to Expect:

• Futures are mixed, with the Nasdaq down over 15 points due to Steve Jobs going on medical leave.
• Asian markets were flat, while European markets show strength in excess of 1%.
• Steve Jobs going on medical leave, and Apple (AAPL) reporting after the bell, will be the focus of traders today. 
• Apple will act as a major drag on Nasdaq today and technology stocks in general. 
• A lot of reasons to believe the market will see some selling pressures in the days ahead. Particularly the overhead resistance in terms of price channels and bollinger bands that typify a pullback scenario – see my post from yesterday. 
• With that said, it appears that risk is increasing by a large amount at this juncture while reward looks greatly limited at this point. 
• A pullback to 1270 would be ideal (lower, short-term price channel), to help the market relieve some of the overhead pressures that it is currently facing. 
• There should be some support at 1278 on the S&P.
• A strong move out of the upper price band, could see the S&P push higher up to 1310. 
• But expect some resistance at 1300 – a lot of talk about the market reaching that milestone, and now that it has, we could see a flood of profit takers hit the wires. 
• 1261 represents the short-term ‘higher-low’
• Volume was slightly stronger on Friday then previous sessions. An increase today from Friday, on market strength, would further encourage the bulls. 
• The more long-term trend-line dating back to 9/1 currently has support at 1247.
• For the bears – Use the overbought nature of this market and the weakness created by AAPL today, to pounce on the bulls. 
• For the bulls – Breakout of the short-term price band overhead, and make a move for 1300, and close above the critical milestone.

Here Are The Actions I Will Be Taking:

• 100% Cash today heading into the open. 
• On Friday, closed FFIV at $143.90 for a 0.8% loss, SLB at $86.77 for a 2.4% gain, FSLR at $140.66 for a 0.9% gain, MWV at $27.18 for breakeven, BBT at $27.72 for a 0.8% gain, and BEXP at $28.34 for a 0.5% loss. 
• Will consider day-trading the breakout setups that look the most appealing to me. 
• Willing to jump back in to the long side, should the market show unabated strength. 
• May look at trading Apple some today. 
• Initiating 1-2 new short positions is not out of the question. 
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.