Profit Taking Likely in Market Today

So-so volume gives bears chance to sell on yesterday’s gains

   

Profit Taking Likely in Market Today

Current Long Positions (stop-losses in parentheses): BZ (8.10), MWV (26.37), CLMT (21.53), MMM (85.55), ALKS (12.17), FCX (118.75), FSLR (135.30)

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

BIAS: 28% Long

Economic Reports Due Out (Times are EST): International Trade (8:30 a.m.), Producer Price Index (8:30 a.m.), Jobless Claims (8:30 a.m.), EIA Natural Gas Report (10:30 a.m.), Bernanke Speaks (1 p.m.)

My Observations and What to Expect:

  • Futures are flat ahead of the Jobless Claims and Market Open.
  • Asian markets showed moderate strength, while Europe had mixed results.
  • Resistance in S&P 500 was broken yesterday at 1278 and now represents short-term support.
  • 1261 represents the short-term ‘higher-low’
  • The very tight channel has price up against the upper channel, and could be an indication that the market may see some short-term weakness back in to the 1260s.
  • Volume continues to be average, with no developing trends or concerns when examining it.
  • Bollinger-Band overlay on price shows that we are hitting the upper band (coinciding nicely with the narrow channel we are trading in), also leading me to believe that upward momentum could be somewhat limited in the short-term, until we a pullback of sorts.
  • The more long-term trend-line dating back to Sept. 1 currently has support at 1242.
  • For the bears: Use the short-term overbought conditions of the market to push the market lower, and to take out some of yesterday’s  gains, ideally half, which could create a bearish piercing pattern.
  • For the bulls: In the short-term, it’s likely there will be some profit taking across the board, but until that happens, push this “higher-high” as high as possible.

Here Are The Actions I Will Be Taking:

  • Should the market show it can avoid the early morning sell-off, I will look to add 1 to 2 new positions to the portfolio.
  • Closed my position in Boise (NYSE: BZ) at $8.37 for a 5.6% gain, closed Calumet Specialty Products (NASDAQ: CLMT) at $22.85 for a 2.5% gain, closed Alkermes (NASDAQ: ALKS) at $12.57 for a 1.1% loss, and Marshal & Ilsley (NYSE: MI) (again) at $7.08 for a 1.3% loss.
  • Added Freeport McMoRan Copper and Gold (NYSE: FCX) at $122.49 and First Solar (NASDAQ: FSLR) at $139.19 – both breakout plays.
  • All the stop-losses remain as is.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.

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Article printed from InvestorPlace Media, http://investorplace.com/2011/01/profit-taking-likely-in-market-today/.

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