Current Long Positions (stop-losses in parentheses): URZ (2.99), RPTP

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

BIAS: 100% Cash

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Consumer Credit (3pm), Bernanke Speaks (3:45pm)

My Observations and What to Expect:

  • Futures are flat heading into the open.
  • Asia, overall was mixed in trading, but did show some strength on the day, while Europe is seeing gains range from 0.2% to 0.5%. 
  • Yesterday, the technical picture only got worse, as the S&P managed to close well below the 1294 level, and thereby establish a lower-low in the market. 
  • As a result, we are officially in a downward trend. The rally we saw off of the September lows, and onward, is dead. 
  • We are extremely oversold, on all time-frames, and as a result, well-overdue for a bounce. I expect to see a lot of shorts run for cover when this occurs, and possibly give the market a nice 2-3% pop before running into any resistance.

  • Volume continues to be slightly above average, which also helps to confirm recent selling. 
  • While we may bounce well before then, I believe that the market will ultimately make a run to 1250, before having a legitimate chance at recovering. 
  • We are only 29 points away from trading in the negative on the year. 
  • We have declined five straight weeks – the first time that this has happened since the March ’09 recovery lows. We are definitely overdue for a bounce, and the possibility of seeing a sixth straight week of declines becomes less likely (which we haven’t seen since July ’08).
  • My conclusion: Near-term bounce in the markets, bears are too hot and heavy and will likely see a massive squeeze to flush them out before resuming the downward trend. 

Here Are The Actions I Will Be Taking:

  • Stopped out of URZ yesterday at $2.99 for 5.9% loss, and day-traded RPTP for a 4.6% gain. 
  • Will continue to day-trade the market with my focus being on small cap stocks. 
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas (as well as everyone else’s).

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