Trading Plan for Jan 27, 2011

Current Long Positions (stop-losses in parentheses): QID (10.49), SDS (22.29)

Current Short Positions (stop-losses in parentheses): EXPD (55.26), DKS (35.79)

BIAS: 21% Short (counting QID and SDS as shorts)

Economic Reports Due Out (Times are EST): Durable Goods Orders (8:30am), Jobless Claims (8:30am), Pending Home Sales Index (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

• Futures are slightly positive heading into the open. 
• Asian markets saw gains as much as 1.5% while European markets are seeing moderate gains ranging between 0.3% to 0.6%.
• It usually takes the market about 1-2 days following the FOMC Statement release, to digest it contents and be appropriately reflected in price. 
• Volume though not heavy, has been increasing each of the past two days. 
• 1300 on the S&P is now the near-term overhead resistance for the bulls. Yesterday, there was five intra-day attempts to break and close above this mark, and each time, it was met with selling. 
• There are a number of bearish divergences in this market that is going, for the most part, ignored. 
• The 10-day moving average continues to hold for the S&P, closing below it (and just barely) once in the past 39 trading session. 
• Also of note, the market made a new recent high, which keeps the existing uptrend in place. 
• Dip buyers continue to provide incredible support to this market, where even the strongest of sell-offs get bought up in afternoon trading.
• The potential bear-flag pattern mentioned yesterday, is null and void with close above recent highs. 
• Nasdaq continues to look much weaker than the S&P and is still trading on the underside of the August trend-line. 
• 1261 represents the short-term ‘higher-low’ on the daily charts.
• For the bears – Keep the bulls from breaking above 1300 – its really their last stand in the short-term. 
• For the bulls – Break 1300 and close well above it. 

Here Are The Actions I Will Be Taking:

• No intentions of adding any new short positions to the portfolio at this point.
• Will close out my remaining short positions should we move above 1300.
• Stopped out yesterday of SDS at $22.29 for a 1.2% loss.
• Will begin shifting my focus to adding new long positions once the recent highs are broken.
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.