Trading Plan for Nov. 9, 2010

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

BIAS: 7% Long (-10% short considering the leverage in QID)

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Wholesale Trade (10am)

My Observations and What to Expect:

• Futures are showing some strength after rallying off of its overnight lows on European market strength. 
• Asian markets were mixed, while European markets are showing positive gains across the board. 
• Like yesterday, the market still needs to come back down some as it is currently overextended making a a trade at this point filled with more risk than reward.  
• With the upside break through the 200-WEEK moving average, history suggests that such an event leads to a significant long-term rally in the markets.
• 1275 on the S&P (give or take a few points) represents the next area of resistance on the charts. 
• Also causing 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. 
• 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. We tested this level yesterday, and bounced quickly thereafter. 
• I’d continue to urge people against shorting the market on the premise that the market is “too-high”  or “economy is awful”. There is no reason right now to be heavily shorting with the belief that this market will see an extended move downwards. 
• No major economic news reports scheduled and earnings season is starting to wind down. 
• Bear’s aim is to hold the Fibonacci retracement levels, and push the market down closer to the 10-day moving average and ultimately challenge those price levels (1198).

Actions I Will Be Taking:

• Covered my short position in SBUX yesterday at the open at $30.40 for a gain of 1.7%
• Will look to sell QID on any market weakness today.
• Will add 1-2 new long positions to the portfolio on any decent amount of market weakness.
• I will wait for a better entry into this market, even if that means I sit out another day or two of market strength. 
• Follow me in the SharePlanner Chat-Room today for all my live trades, including my day-trades.