Will the Shorts Cash In?

After being burned by not taking profits after sell-offs, the bears may do so today

   

Will the Shorts Cash In?

Current Short Positions (stop losses in parentheses): TICC ($10.28), MCD ($77.74), CTXS ($64.13), MENT ($11.08), GS $(160.40), HRS ($44.99), HTZ ($11.78), KR ($22.36)

Current Short Positions (stop-losses in parentheses): None

Bias: 73% Long

Economic Reports Due Out (times are EST): Retail Sales (8:30 a.m.), Empire State Manufacturing Survey (8:30 a.m.), Business Inventories (10 a.m.)

My Observations and What to Expect

* Futures are slightly up.

* Asian markets were mixed. European markets are rallying off their lows, but still remain mixed in their returns.

* The S&P 500 broke and closed below the 10-day average. Throughout the duration of the current trend, when this has happened, there has been a strong rally the following market session.

* The current trendline flattened out a little more — something that has consistently taken place throughout this rally. But no lower low has been established.

* S&P found support at the 20-day moving average, which it has not closed below since Sept. 1.

* On the weekly charts, the S&P held support at the 200-week moving average. A break below this moving average could signal a major move downward.

* We’ll have POMO every day this week. The full schedule can be found here.

* One big question on Wall Street is whether QE2 will represent a “sell-the-news” type of event.

* The volume from the previous two market sessions has been nothing spectacular.

* The main goal for the bulls is to hold the 20-day moving average; best-case scenario is close above the previous day’s highs at 1,210, or reclaiming the 10-day moving average.

* Throughout 2010, the bears have been burned numerous times by not taking profits after significant market sell-offs. This could lead to them being all too willing to do so today.

* The bears should aim to close below the 20-day moving average at 1,195, and the lows from Friday. Ideally, a close below 1,183 would cause a lot of problems for the bulls.

Actions I Will Be Taking

* May add one or two new positions to the portfolio should the market stabilize today.

* Stopped out of Monsanto Company (NYSE: MON), SPDR S&P 500 (NYSE: SPY), Netflix, Inc. (NASDAQ: NFLX) and Baidu.com, Inc. (NASDAQ: BIDU) on Friday.

* If the market closes below the 20-day moving average, I will close out my long positions as a result.

* Added Hertz Global Holdings, Inc. (NYSE: HTZ), Goldman Sachs Group Inc. (NYSE: GS), The Kroger Co. (NYSE: KR) and Harris Corporation (NYSE: HRS) to the portfolio on the 20-day moving average test.

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

The SharePlanner Swing-Trading System is a proven trading strategy that has outpaced all the major indices with an 8-year return of over 1,010%. This year alone it is up 29%, with 64% of the stock picks being winners. It’s an easy trading system that requires very little effort after you buy the stock and great for those who can’t watch the market all the time! Find out more by visiting SharePlanner.com.


Article printed from InvestorPlace Media, http://investorplace.com/2010/11/will-the-shorts-cash-in/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.