Trading Plan for Sept. 22, 2010

Current Long Positions (stop-losses in parentheses): TICC (9.04)

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

BIAS: 3% Long

Economic Reports Due Out (Times are EST): MBA Purchase Applications (7am), FHFA House Price Index (10am), EIA Petroleum Status Report (10:30am)

My Observations and What to Expect:

• Futures are moderately lower.
• Today will be used for the market to further digest the Fed’s comments in yesterday’s FOMC statement.
• Yesterday snapped a 9-day winning streak for the Nasdaq.
• I’d like to see a pullback to at least 1100-1115 on the S&P. 
• Finally starting to work off some of those overbought conditions.
• Yesterday’s volume was much higher than usual, but mainly in part due to the Fed announcement.
• Monday’s 1130 breakthrough, pretty much ruined the bear’s chances of a breakdown before the end of the year. 
• The bears need to target a break of 1113, it’s not much but it would be a start. A break of 1100 would have the bulls nervous.

Actions I Will Be Taking:

• Could add a new long position to the portfolio if we get a nice sell-off today (10-20 points).
• Will not be adding any new short positions to the portfolio for the foreseeable future, unless there’s some kind of game-changer that takes place.
• Will continue looking to add some new long positions on a market pullback.
• Unless the market breaks down between now and the open (+10 points on the S&P Futures), this gap is fade worthy.
• Will be providing in the days ahead some long setups to be keeping an eye on.
• I could see myself having 3-4 new long positions by week’s end, if we end up giving back all of Monday’s gains in the days ahead.