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S&P 500 May Bump 10-Day Highs and Lows

Market looks to test technical indicators


Current Long Positions (stop-losses in parentheses): BZ (7.95), MI (6.77), MWV (26.08),

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

BIAS: 21% Long

Economic Reports Due Out (Times are EST): None

My Observations and What to Expect:

  • Futures are showing moderate strength heading into the open.
  • Asian and European markets are both showing weakness in trading today.
  • S&P 500 setting up to open at or below the 10-day moving average, which is something that hasn’t occurred during the duration of this rally going back to Dec. 1.
  • Should we trade below 10-day moving average, the next area of support to watch is 20-day moving average.
  • A break below 1251 would represent a “lower-low” in the market, and would greatly enhance the bearish cause going forward.
  • Volume was fairly steady and slightly above average last week for the best stock picks.
  • Dip buying always is a strong possibility, even on days where the market is setting up for a strong push downwards. Be very careful when initiating new short positions in the afternoon, as that tends to be the best time for dip-buying to start ramping up.
  • Hanging-Man candle pattern on the S&P 500 Friday could be an early indication that bullish enthusiasm may be waning in the short-term, and could bring forth some additional selling.
  • 1276-8 is representative of the higher-high in this rally, and is providing short-term resistance.
  • The more long-term trend-line dating back to Sept. 1 currently has support at 1234.
  • For the bears — At the very least close the day below the 10-day moving average — ideally below Friday’s lows.
  • For the bulls — Need to see some dip buying come in and support this market — close above the 10-day moving average, but by no means lose the 20-day moving average.

Here Are The Actions I Will Be Taking:

  • Unlikely to add any new long positions to the portfolio today, unless the market rebounds off of the lows. May initiate at least one short position if the market weakness persists throughout the day.
  • Raised the stop-loss in Boise (NYSE: BZ).
  • Closed out Dean Foods (NYSE: DF) on Friday at an average price of $9.66 (8.2% gain), Genco Shipping & Trading (NYSE: GNK) at $14.90 (.9% gain), and LSI Corp. (NYSE: LSI) at $6.05 (1.5% loss).
  • Day-traded ProShares Ultra S&P 500 (NYSE: SSO) off of the 10-day moving average on Friday for a 1% gain.
  • Follow me in the SharePlanner Chat-Room today for all my live trades and ideas.

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