Trading Plan for Sept. 29, 2010

Current Long Positions (stop-losses in parentheses): TICC (9.48), BRKR (12.95), CVX (76.89), DAL (11.05), ELY (6.39), ITW (44.45), SSO (38.03), QQQQ (48.06)

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

BIAS: 73% Long

Economic Reports Due Out (Times are EST): ICSC-Goldman Store Sales (7am), EIA Petroleum Status Report (10:30am), Farm Prices 3pm).

My Observations and What to Expect:

• Futures are mixed. 
• The 1150 level on the S&P is becoming a huge hindrance for the bulls now. Currently 0 for 3. Another test today is likely in the cards.
• Important for the bulls to push through 1150, or their 3-day highs as it could spur on another round of short-covering. Russell 2000 was the only major index to do this.
• Volatility could increase as we approach the end-of-quarter.
• Last 5 quarter-end days have resulted in negative returns. Last positive day was March ’09.
• Only 1 of the past 4 quarter-end weeks have had bullish returns (3 out of 6 dating back to January ’09)
• If the bulls can break through 1150, next step would be 1173.
• Bears need to push this market below 1131 and ultimately 1122.
• Hanging Man candle pattern yesterday is a bit of a concern for the bulls – bearish signal?
• Asian markets finished in the green and European are slightly negative.
• Thursday could set up to be a wild day with GDP and Jobless Claims due.

Actions I Will Be Taking:

• I held off from buying any additional long positions yesterday, and will do so again today. I want to see how this market plays out in the short-term first.
• Raised the stop-loss in TICC to $9.49. Looking at 18% worth of gains right now along with a 2.2% dividend payout earlier this month.
• Becoming a bit weary of intraday hedge positions covering myself if the market goes lower due to the willingness of the bulls to continue buying dips.
• Any gap up/down this morning should represent a good fading opportunity, barring any significant news.