Current Long Positions (stop losses in parentheses): RAH ($60.75), EQY ($16.75), PH ($78.95), GIL ($30.11), HK ($17.63)
Current Short Positions (stop losses in parentheses): DTV ($42.55), EQR ($51.15), VPRT ($42.37), ITT ($48.01), FCN ($36.74), V ($77.61)
Bias: 7% short
Economic Reports Due Out (times are EST): Monster Employment Index (6 a.m.), Jobless Claims (8:30 a.m.), Pending Home Sales Index (10 a.m.), EIA Natural Gas Report (10:30 a.m.)
My Observations and What to Expect
* Futures are up moderately ahead of the bell.
* Asian markets were up, and European markets are showing continued strength.
* The 1,200 level on the S&P 500 was broken decisively yesterday on average volume.
* As stated yesterday, the break of 1,200 was a game-changer for the bulls, and eerily similar to what we saw on Sept. 1. I wouldn’t be at all surprised if we see an extended rally going forward, much like what we saw back in the September/October time frame.
* Continuation is key for the bulls today. Add another few points to yesterday’s gains, and you will likely see a lot more bears cover their short positions. As it stands right now, there are probably a lot bears still hoping that the bulls cannot hold the gains from yesterday. I see this as being very unlikely.
* Dips will be bought — the momentum has completely shifted in the bulls’ favor as the S&P broke out of the descending triangle.
* Support for this market will be at 1,200 — the breakout point for the S&P.
* Resistance will be at the November highs. A break there could see S&P rally as high as the 1260s and potentially into low 1300s eventually (best-case scenario).
* Be very careful of getting overly bearish in this market, as this rally could last for a while.
* The bears’ main goal is to push the market back below 1,200 today, and force the bulls to do battle with that critical price level again.
Actions I Will Be Taking
* Will add two new positions to the portfolio (one long, one short).
* Despite being 7% short, it will take very little for the market to flip my portfolio into a bullish one, since most of my short positions are near their stop losses.
* 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.