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The 2 Most Important Numbers for Traders

Bears need a close below S&P 1,173; the bulls above 1,200


Current Long Positions (stop losses in parentheses): TICC ($10.28), RAH ($60.75), EQY ($16.75), PH ($78.95), BAC ($11.02)

Current Short Positions (stop losses in parentheses): DTV ($42.55), EQR ($51.15), VPRT ($42.37), TIE ($17.84), ITT ($48.01) GLAD ($11.54), FCN ($36.74)

Bias: 18% Short

Economic Reports Due Out (times are EST): ICSC-Goldman Store Sales (7:45 a.m.), Redbook (8:55 a.m.), S&P Case-Shiller HPI (9 a.m.), Consumer Confidence (10 a.m.), State Street Investor Confidence Index (10 a.m.), Farm Prices (3 p.m.)

My Observations and What to Expect

* Futures are down slightly.

* Asian markets finished the day down, with the Nikkei off 1.9%. European markets are mixed.

* Despite the U.S. market finishing down yesterday, the market showed a lot of intraday strength rallying off of the 1,173 price level on the S&P 500.

* Even with recent market weakness, dip buying is not dead as of yet, though the last three hammer candles have been met with a significant sell-off the following market session.

* A bearish descending triangle is forming on the S&P, signaling that a break to the downside could be imminent.

* The S&P continues to find support from the October consolidation range.

* We dipped below the 50-day moving average, but quickly rebounded to finish well above it.

* The only price level the bears need to concern themselves with is 1,173. If we close below it, the upward trendline from the August lows is dead.

* The bulls should aim for 1,200 and close above it, which would also represent the 20-day moving average.

Actions I Will Be Taking

* Will add two new positions to the portfolio (one long, one short).

* Stop losses remain as is.

* Added Bank of America Corporation (NYSE: BAC) (long) and FTI Consulting, Inc. (NYSE: FCN) (short) to the portfolio yesterday, near the close.

* Stopped out of Harris Corporation (NYSE: HRS) with a small loss and Mentor Graphics Corporation (NASDAQ: MENT) slightly above breakeven.  

* Follow me in the SharePlanner Chat-Room today for all my live trades, including my day trades.

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