Trading Plan for March 1, 2011

Current Long Positions (stop-losses in parentheses): CPWR (10.90), IO (11.40), PLD (15.73), YSI (9.78)

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

BIAS: 25% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), ISM Manufacturing Index (10am), Construction Spending (10am), Bernanke Speaks (10am)

My Observations and What to Expect:

• Futures are up slightly ahead of the open and has given up much of its gains in overnight trading. 
• Asian markets saw positive gains between 0.3% and 1.2% while European markets were flat to slightly positive. 
• S&P continues to repair the damage from the week prior with it opening above the 9/1  trend-line and reclaiming the 10-day moving average too. 
• Next task for the bulls will be to push the market to new highs now. Failure to do so in the near term, will drive speculation that the market is putting in a lower-high. 
• Volume was very strong on Monday, equal to what we saw last week during the sell-off. 
• First day of the trading month has seen major gains over the last six months. 
• A new “lower-low” would come from a break of the 1/28 lows at 1275. If we break that level, we are in a confirmed downtrend.
• For the bears – Needs to do whatever it takes to keep this market from marching on to new highs. 
• For the bulls – Continue the buying strength that we’ve seen on the first days of the trading month, and use it to get near or above recent highs. 
• My conclusion: While I believe this market is due for a significant correction, the likelihood of us seeing one is low when the Fed is constantly providing a bid beneath this market. 

Here Are The Actions I Will Be Taking:

• Added four new positions to the portfolio – CPWR at $11.24, IO at $12.78, PLD at $16.18, and YSI at $10.25. 
• No changes to the stop-losses in the portfolio this morning. 
• Should we continue to see the early morning strength gain momentum, I’ll add 2-3 new positions to the portfolio today. 
• After the action we saw last week, I will continue to play it cautious. 
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.