Trading Plan for January 10, 2012

Economic Reports Due out (Times are EST): NFIB Small Business Optimism Index (7:30am), ICSC-Goldman Store Sales (7:45am), Redbook (8:55am), Wholesale Trade (10am)

Premarket Update (Updated 9am eastern):

• Futures are up strong – about 1%.
• Asian markets are seeing gains of about 0.5%.
• Europe is running hard, ranging from 1.6% up to 2.9%.

Technical Outlook (S&P):

• Today’s move represents a breakout of recent consolidation. 
• From a price stand point we are looking at opening above the October highs. 
• Volume yesterday was on part with what we saw on Friday. 
• After 1293, the S&P could make a move up to the 1311-1315 area which would represent the descending trend-line off of the 5/2/11 highs (resistance).
• The markets will be well into overbought territory after today’s open. 
• If price sells off hard and goes down to 1252, it would put price back inside of the Downward trend-line off of the 7/7 highs. 
• On the 30 min chart, the early morning strength that we are seeing breaks price out of the bull flag. 
• We still have a gap higher from Tuesday that has seen the bears attempt to fill, but failed the last three days. 

My Opinions:

• I have a feeling that the market after this early morning gap up, will give us little in the way of price movement during actual market hours. 
• Market is undoubtedly climbing the wall of worry. 
• If it can break 1293 as described above, I think we’ll a lot of buyers will start coming off of the sidelines and move back into equities.

My Portfolio:

• 100% cash
• Traded TZA and TNA yet again for small gains. Nothing really moving on my radar. 
• I’ll look to day-trade this market today, and even possibly add some swing-trades to the portfolio as well. 

Charts: