Trading Plan for March 3, 2011

Current Long Positions (stop-losses in parentheses): CPWR (10.90), TICC (11.90), NFLX (199.75), PFE (18.89), PGH (12.65), SCO (43.99)

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

BIAS: 45% Long

Economic Reports Due Out (Times are EST): Monster Employment Index (6am), Jobless Claims (8:30am), Productivity and Costs (8:30am), ISM Non-Manufacturing Index (10am), EIA Natural Gas Report (10:30am)

My Observations and What to Expect:

• Futures are up strong – nearly 1% on the S&P and Nasdaq
• Asian markets were mixed ranging from -0.4 up to 0.9%, while European markets saw major gains across the board with 1.3% in gains on average. 
• Yesterday the S&P held and closed above the flattened trend-line connecting the lows from 9/1 and 2/24.
• Watch for resistance today at the 1320 level on the S&P. A close above that price level would greatly improve the market sentiment. 
• A rally today needs to see strong participation from market leaders Apple (AAPL), Google (GOOG), Netflix (NFLX), and Bidu (BIDU) to name a few. 
• 10 & 20 DMA crossover on the S&P to the downside will occur today. The last three times this has occurred, has resulted in a mild amount of additional selling – on average, about 30 points, before seeing the opposite upside crossover. However, when the downside crossover occurred back in April, there was a significant sell-off that ensued. 
• A break of S&P 1294 (last week’s lows) would put in a lower-low in the markets, and confirm a downtrend being in place. The S&P also sits at that same price level, making it a significant price support level. 
• Volume was “so-so” yesterday – above average but nothing eye-catching. 
• Market continues to trade specifically to the strength/weakness in oil. Rising oil prices will continue to hamper the markets going forward.
• For the bears – Fade the morning gap up, and make a move beyond yesterday’s lows. 
• For the bulls – Add to yesterday’s slight gains, and close above  1320 on the S&P.
• My conclusion: As non-sensical this market rally is, it is hard to trade against it with all the uninvited players doing what they can to prop the market up on a daily basis (i.e. Fed/POMO). Downturns are hard to get excited about because ultimately they find a bid underneath the market, keeping it from dropping too far. Which is why we are constantly seeing “V” shaped bounces. 

Here Are The Actions I Will Be Taking:

• Maintained all of my positions from yesterday, while adding SCO to the portfolio at $44.70 and PGH at $12.89. 
• It will be hard to hold SCO beyond today, as it is strictly a play on oil pulling back in the very near-term off of its recent highs. 
• No changes to the stop-losses in the portfolio this morning.
• Will look to be aggressive with adding a few new positions to the portfolio, assuming market internals remain healthy. 
• Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.