Trading Plan for October 1, 2010

Current Long Positions (stop-losses in parentheses): TICC (9.62), BRKR (12.95), CVX (76.89), DAL (11.05), ELY (6.39), ITW (44.45), SSO (38.03), QQQQ (48.06), FRG (6.78)

Current Short Positions (stop-losses in parentheses): LMT (76.35)

BIAS: 76% Long

Economic Reports Due Out (Times are EST): Personal Income and Outlays (8:30am), Consumer Sentiment (9:55am), ISM Manufacturing Index (10am), Construction Spending (10am)

My Observations and What to Expect:

• Futures are up moderately. 
• Chinese Manufacturing data is bolstering markets. 
• Both Asian and European markets are up. 
• 6 out of the last 10 Octobers have ended with positive gains. 
• 4 out of the last 10 opening October sessions have ended with positive gains. 
• Today represents a great opportunity for the bulls to close above 1150 on the S&P
• On the weekly charts, a close above 1156 would make it a near certainty that we test the April highs. 
• Still wedged up against the upper line of the rising channel. For October to be a success, will need to breakout and above the upper-line.
• Bears need to push this market below 1131 for starters and ultimately 1122 in order to put in a lower-low. 
• Price action very similar to what we saw from 9/13 through 9/17.

Actions I Will Be Taking:

• Will hold off from adding any new positions to the portfolio until we see confirmation that this market is willing to move higher. 
• No changes to any of my stop-losses. 
• Becoming a bit weary of intraday hedge positions for covering myself if the market goes lower due to the willingness of the bulls to continue buying dips. Yesterday was a perfect example of how fast the dip buying can infiltrate the market when it is declining. 
• I would hold off of fading a morning gap up this morning.