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Your Signal to Cash Out

Exit long positions if the S&P 500 closes below its 20-day moving average


Current Short Positions (stop losses in parentheses): TICC ($10.28), MCD ($77.74), BIDU ($104.74), GS ($160.40), HRS ($44.99), HTZ ($11.78), KR ($22.36)

Current Short Positions (stop-losses in parentheses): TFSL ($8.69)

Bias: 57% Long

Economic Reports Due Out (times are EST): ICSC-Goldman Store Sales (7:45 a.m.), Producer Price Index (8:30 a.m.), Redbook (8:55 a.m.), Treasury International Capital (9 a.m.), Industrial Production (9:15 a.m.), Housing Market Index (10 a.m.)

My Observations and What to Expect

* Futures are seeing moderate weakness.

* Asian markets closed in the red, while European markets are experiencing heavy selling.

* S&P closed just a shade above the 20-day moving average; however, the market is poised to open well below that level.

* The 200-week moving average sits at 1,191. If that breaks, it would represent a shift in the market outlook.

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

* So far, QE2 has been a “sell-the-news” event.

* Yesterday’s volume was well below average.

* The main goal for the bulls today will be to bounce off of the 20-day moving average and thus avoid a close below it.

* Bears should aim to close below 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

* Will look to add a new short position to the portfolio as a hedge.

* Stopped out of Mentor Graphics Corporation (NASDAQ: MENT) and Citrix Systems, Inc. (NASDAQ: CTXS) yesterday.

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

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

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