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Battle Line Remains Drawn at S&P 1,227


Current Long Positions (stop losses in parentheses): VMW ($84.50), BIDU ($105.80), ESV ($48.75), CX ($9.56)

Current Short Positions (stop losses in parentheses): DTV ($40.50)

Bias: 21% Long

Economic Reports Due Out (times are EST): International Trade (8:30 a.m.), Import and Export Prices (8:30 a.m.), Consumer Sentiment (9:55 a.m.), Treasury Budget (2 p.m.)

My Observations and What to Expect

* Futures are moderately up heading into the open.

* Asian markets were down while Europeans markets are trading in the positive.

* Yesterday’s price action was choppy, but nonetheless managed to hold the 1,227 support level on the S&P 500.

* We continue to climb every-so-slightly higher with baby steps, though based on declining volume and candle patterns, it has more of a “consolidation” look to it for now.

* Yesterday put to rest that the market was forming a double-top with the November highs. It is currently 6 points above the November highs.

* S&P 1,216 also marks the lows for the consolidation. A break below that could indicate further selling in the near term.

* Despite being overbought in the short term, bullish rallies have the ability to last far longer than we expect. It is my opinion that we are probably going to see another leg up very soon.

* The current rally on the daily charts still has the makings of what we saw back on Sept. 1, when the market rallied for over two months.

* Dip buying will continue to be the name of the game for traders.

* The U.S. dollar is hitting resistance at the 10- and 100-day moving averages.

* For the bears: Push back below 1,227 and close beneath it is an absolute must.

* For the bulls: Build upon the 1,227 level by shooting up above 1,235 and signaling a new move upward.

Actions I Will Be Taking

* Will look to add one to two new trades to the portfolio today.

* Further strength in the market will probably stop me out of DIRECTV (NASDAQ: DTV).

* Closed out my position in Apogee Enterprises, Inc. (NASDAQ: APOG) at $12.67 for a 4.8% gain.

* Closed out my position in Netflix, Inc. (NASDAQ: NFLX) at $201.22 for an 8.5% gain in the after hours when it was announced the stock was added to the S&P 500.

* Stop-Losses remain as is.

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

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