Current Long Positions (stop-losses in parentheses): TICC (8.64)

Current Short Positions (stop-losses in parentheses): SPY (113.30), DELL (13.26), FL (13.81)

BIAS: 34% Short

Economic Reports Due Out (Times are EST): Treasury Budget (2pm)

My Observations and What to Expect:

  • Futures are up strong heading into the open. 
  • Chinese economic reports seem to be bolstering the market this morning. 
  • Downward trend-line off of the April highs has been broken. But no higher-highs have been put in place yet. 
  • Market is extremely overbought in every sense of the word. Seven out of the past eight days has seen the S&P increase in value. 
  • 200-Day moving average acts as the next road-block for the bulls to conquer at 1115. 
  • Volume last week was very weak, which puts in to question the validity of the gains seen. 
  • Bears need to get the ball rolling very soon – need to push the market below 1091 as its first order of business. 
  • Wouldn’t be overly surprised to see this rally faded today – I put the odds at 50%. 

Actions I Will Be Taking:

  • Will stay put in my portfolio today and won’t add any additional short positions to it. 
  • Taking on a new long position at this point in the rally has a very low reward/risk ratio. Fading the rally with a few short positions has a much better setup to it. 
  • Won’t hesitate to hedge this portfolio in the face of continued strength after the market open. 
  • Added Foot Locker (FL) to the portfolio at 12.96 on Friday.

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