Trading Plan for Jan 5, 2011

Current Long Positions (stop-losses in parentheses): NVDA (15.49), BZ (7.86), GS (166.30), BCSI (29.37), GLD (132.80), ATML (12.11), GNK (14.37), MI (6.77)

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

BIAS: 42% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), Challenger Job-Cut Report (7:30am), ADP Employment Report (8:15am), ISM Non-Manufacturing Index (10am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

• Futures are showing moderate weakness heading into the open. 
• Asian were flat/mixed, while European markets have seen heavy selling in excess of 1%.
• S&P rallied back nicely yesterday afternoon (thought still down on the day) despite being weighed down for much of the day. 
• 10-day moving average and existing trend-line was never violated, not even on an intra-day basis. Even with today’s early morning, weakness, prices are not yet threatening the bullish uptrend of this market. 
• 1276 is starting to provide some short-term resistance – but nothing that I would call ‘significant’ at his point. 
• The more long-term trend-line dating back to 9/1 currently has support at 1230. 
• Selling from the past two days isn’t overly concerning, as all time frames remain very bullish. 
• One thing that I would be very careful of is the similarities between this rally, and the rally from 11/4 and the selling that occurred thereafter. If we are heading in that direction, you need to be careful about getting too heavily long in your portfolio at this point.
• Gold held its 50-day moving average yesterday, just as it had many times before dating back to mid-August. Large gap that was created, will get filled here soon, even if further downside is still in the cards. 
• Any break below recent consolidation (1250 or less on the S&P) would represent a lower-low in this market.
• For the bears – Not a good job on holding down the bulls. But use the quasi-hanging man candle from yesterday, and weakness today, to put in at least a short-term top in the market. But selling needs to be substantial without the late-day rally occurring. 
• For the bulls – Buy the dip as most sell-offs have been opportunities more than anything else. 

Here Are The Actions I Will Be Taking:

• I didn’t do the best job of preserving the majority of my profits in NVDA yesterday, and used yesterday’s rally into the close, as an opportunity to add some new positions to the portfolio. Today, Unless we recover decisively from this morning weakness, I don’t expect to add any new long positions. 
• Stopped out of NVDA for 1.5% in gains and stopped out of BCSI for a 3.8% loss. 
• Added AMTL at $12.69, GLD at $135.44, GNK at $14.77 and $MI at $6.99. 
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.