Current Long Positions (stop-losses in parentheses): AAPL (338.23), CHK (30.76), CIM (45.25), GOOG (562.50), FFIV (108.80), EWJ (9.75)

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

BIAS: 61% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications, Housing Starts (8:30am), Producer Price Index (8:30am), Current Account (8:30am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

  • Futures are mixed and have been all night long. 
  • Japan bounced back strong up 5.7%, Shaghai up 1.2%, and Hang Sent was flat. European markets were mixed. 
  • Yesterday was one of our more interesting market sessions of late with the market bouncing 20 points off of its lows – which coincided nicely with the 100-day moving average The S&P still finished though down more than 1%. 
  • Volume was strong to the downside, but for most of the day, we saw the market rallying off of its lows. 
  • There is a significant bullish hammer on the charts, that would indicate we are likely to see some further upside in the short-term. 
  • FOMC Statement provided little fodder for the markets – went largely unnoticed. 
  • We closed below the 1294 level on the S&P which officially ends the upward trend that we had been on since 9/1. Now we are in a confirmed downtrend with a recent ‘lower-high’ and ‘lower-low’. 
  • The market is currently oversold and looks ready for a bounce in the short term. 
  • If you are looking at shorting this market, a dead-cat bounce that takes us up to 1292 and 1294 would be considered a good area to short the market at. 
  • For the bears – Provide follow through, avoid allowing the market to build off of the rally it had off yesterday’s lows. 
  • For the bulls – Push for the 1294 and close above it. 
  • My conclusion: This is going to be a difficult market to trade – proper timing will allow you to benefit from both sides of the trade. Going forward, it looks like the rallies should be shorted. 

Here Are The Actions I Will Be Taking:

  • Added EWJ at $9.50, GOOG at $558.79, and $FFIV at $106.65
  • Stopped out of CMI at the opening at $94.18. for a 3% loss. 
  • Will be looking to book gains on any strength we might see today. 
  • Careful to add any additional longs to the portfolio today.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.

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