Trading Plan for Sept. 30, 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): 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.