Current Long Positions (stop-losses in parentheses): TICC (10.28), NFLX (172.58), MCD (77.74), FLIR (28.18), BIDU (111.99), SPY (119.90), CTXS (64.13), MENT (11.08), MON (61.20)

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

BIAS: 73% Long

Economic Reports Due Out (Times are EST): Consumer Sentiment (9:55am)

My Observations and What to Expect:

  • Futures are down significantly, but has managed to bounce off of its overnight lows. 
  • Asian markets closed well below 1% across the board, European markets are down, but have managing to rally substantially off of its lows.
  • S&P once again bounced after testing the 10-day moving average, and the trend-line that began in late August. Strong sign of strength by the market. 
  • S&P stands poised, yet again, to test the 10-day moving average and August trend-line. 20-day moving average is also in play, which the market has not traded below since 9/1.
  • Today marks the first day of QE2. The full schedule can be found here
  • One big question surrounding Wall Street is whether QE2 will represent a “sell-the-news” type of event. 
  • A lot of volatility in overnight futures trading should be an alarm to traders to be very careful heading into the open. 
  • A doji hammer candle formed yesterday, further signifies that buyers continue to “buy-the-dip”. 
  • One lesson that bears should have learned this year is that when you have profits – take ’em. Don’t let the inevitable bounce wipe those gains out. 
  • 1227 represents a near-term resistance level for the bulls while 1275 on the (give or take a few points) represents the next area of resistance on the charts.
  • Also causing some resistance in the very near term is the fact that we are at the 61.8% Fibonacci Retracement level from the Oct. ’07 highs to the March ’09 lows.
  • Yesterday was another failed opportunity by the bears to drive this market lower, in some sense, the bulls came away from yesterday’s market session a bit more emboldened. Today, with the early morning weakness in the markets, the bears, need to push this market lower, and close at the day’s lows, and below the 10-day moving average. 

Actions I Will Be Taking:

  • Added two new positions to the portfolio yesterday – MENT and MON
  • Stopped out of FLIR yesterday at the market open at $28.18.
  • Will be closely watching the activity in my positions, and won’t hesitate to start closing out positions, if this market wants to tank on the CSCO earnings.
  • Should the market hold major support levels as noted above, I will consider adding 1-2 new positions to the portfolio. 
  • Tightened the stop-losses in BIDU, CTXS, and MENT
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.