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Take Profits if it Rallies Today

The market is strong but may be near its top


Current Long Positions (stop-losses in parentheses): BZ (7.86), GS (169.80), ATML (12.21), GNK (14.37), MI (6.77), DF (8.58), LSI (5.91)

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

BIAS: 49% Long

Economic Reports Due Out (Times are EST): Monster Employment Index (6 a.m.), Jobless Claims (8:30 a.m.), Treasury STRIPS (3 p.m.)

My Observations and What to Expect:

  • Futures are showing moderate strength heading into the open.
  • Asian and European markets are both showing strength in their respective markets.
  • Despite the heavy selling at the open yesterday, the market managed to close at new rally-highs.
  • Current trend-line was maintained as well as the 10-day moving average.
  • Volume in line with previous two day’s volume reading.
  • 10-day moving average and existing trend-line are marching upwards in near unison – which is currently at 1262 on the S&P 500.
  • Nice bullish engulfing candle pattern formed over the past two trading sessions.
  • 1276 is starting to provide some short-term resistance – but nothing that I would call ‘significant’ at his point.
  • The more long-term trend-line dating back to Sept. 1 currently has support at 1233.
  • I am still concerned about the similarities to S&P 500 on Nov. 4, the chart proceeding it, and the type of chart we have now, dating back to late December’s consolidation. A good, strong rally today, would be a reason to take a lot of profits off the table.
  • Gold, dollar and equities relationship seems to have problems with its traditional correlation. Still a lot of mixed signals among these three classes.
  • Any break below recent consolidation (1250 or less on the S&P) would represent a lower-low in this market.
  • For the bears – Keep the market from advancing or at least from closing above 1276 – doing so strengthens the resistance of the S&P at this price level.
  • For the bulls – Capitalize on yesterday’s rally off the lows, and push the market higher, and away from the trend-line that it has been hugging of late.

Here Are The Actions I Will Be Taking:

  • One or two stocks may be added to the portfolio today.
  • Watching VIVUS, Inc. (NASDAQ: VVUS) and Alkermes Inc. (NASDAQ: ALKS).
  • Closed out of SPDR Gold Trust (NYSE: GLD) for a .8% loss at $134.32.
  • Added Dean Foods (NYSE: DF) at $8.91 and LSI Corp. (NYSE: LSI) at $6.14.
  • Follow me in the SharePlanner Chat-Room today for all my live trades, including my day-trades.

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