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.

You Might Like

  • South Korea and its impact on the US stock market.

    South Korea: The Hidden Driver of US Tech Volatility

  • Learn to trade within your means.

    Stop Trying to Hit Home Runs: Start Trading Within Your Means

  • Avoiding traps on stock breakout plays.

    How to Trade Breakouts Without Getting Trapped