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): GDP (8:30am), Jobless Claims (8:30am), Corporate Profits (8:30am), Chicago PMI (9:45am), Bernanke (10am), EIA Natural Gas Report (10:30am), Bernanke (2:30pm)
My Observations and What to Expect:
- Futures are slightly down ahead of the open.
- 1150 on the S&P is quickly becoming the mortal enemy of the bulls.
- Both Asian and European markets are trading in the red today.
- The rising channel that the bulls are currently trading in is a bit concerning, considering the fact that the bulls are at the top of the range right now. Needs to break through this resistance level.
- On an intraday basis we are stuck in a range between 1140 and 1150.
- Will see “Window-Dressing” today as we end the third 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 positive returns (3 out of 6 dating back to January ’09)
- A solid GDP and Jobs report this morning could push this market upward to 1170.
- A weak GDP/Jobs report could push this market in to the 1120’s.
- Bears need to push this market below 1131 and ultimately 1122.
- Price action very similar to what we saw from 9/13 through 9/17.
Actions I Will Be Taking:
- Added a very small speculative position (FRG) yesterday at $7.22.
- Raised the stop-loss in TICC to $9.62.
- 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.
- However, if the GDP/Jobs Report is weak, I will put on a large short position as a hedge position at least until price settles.
- I would be very careful about fading any gap this morning.