Market Update 12/28/09

The SP-500 gapped up yesterday morning and then proceeded to meander lifelessly for the remainder of the day. As commented on in previous posts there are a serious lack of interest from both buyers and sellers. I was filled on my second scale in for the short position I am building. (See the 12/27/09 post for the reasons and trade plan).

% Of Full Position
MY %     Alternate%           SPX Level to Scale In           SPX Level Stop

20%               15 %                        In at 1119

30%               30%                         In at 1128.45

50%               55%                         1136.45                      1145.83



As long as the KW_Mouthwash Breadth indicator stays at extreme levels without at least a 1.5% SP-500 pullback (from peak to trough) I will continue with the plan for a third scale-in at SPX 1136.45.

If SPX pulls back before reaching the third level I will bring the stop down to 3.34 points above the SPX pivot high that will have formed on a close below 1118.19. (My second entry level minus the 10D_ATR on the day filled). On an Intraday move below 1114.10 I will sell half the position and go to break even on the remainder. If a real more normal pullback develops I will trail the remainder until a long signal develops.

That’s the plan and I’m sticking to it.

Good Trading.
KW