Trading Plan for Nov. 8, 2010

Current Short Positions (stop-losses in parentheses): SBUX (31.37)

BIAS: 4% Short (-20% short considering the leverage in QID)

Economic Reports Due Out (Times are EST): None

My Observations and What to Expect:

• Futures are showing some weakness
• Asian markets were up about 1%, while European markets are trading with a slight negative bias. 
• Today sets up as an excellent pullback opportunity. Wait for the market to give back some gains here before jumping into anything on the long-side. 
• With the upside break through of the 200-WEEK moving average, history suggests that this leads to a major rally in the markets. 
• Next level of resistance for the bulls is 1275 on the S&P. 
• Initial support for the S&P on a pull-back lies at the April highs which is 1219 or six points below where it is currently trading. 
• Absolutely no reason to be short except for the very near-term that indicates the market needs a small pullback before advancing any further. Any significant position building to the short side is a reckless use of portfolio capital. 
• No scheduled news releases due out today that could impact the market. 
• Wait for some weakness in this market before adding new long-positions, don’t try to chase after this market at all. 
• For the bears look for a a gap open that is below Friday’s lows with further selling thereafter, which would be ideal, and at the least, some selling today that begins to erase Thursday’s gains. 

Actions I Will Be Taking:

• Added one new short position to the portfolio on Friday – SBUX, which looks to have made an exhaustion gap-up on Friday. 
• Will look to sell QID and cover SBUX today on market weakness. 
• Will add 1-2 new long positions to the portfolio on any decent amount of market weakness. 
• Follow me in the SharePlanner Chat-Room today for all my live trades, including my day-trades.