http://www.personsplanet.com/blog/bernanke-hes-a-stock-pickers-dream-come-true/

I have looked at many opportunities to go long today. The majority of stocks have a nice price pattern but the on balance volume is not trending in the same direction.  With this said I am also looking for shorting opportunities. This does not look great either. I did not find anything today I want to swing or position trade. Keep your stops tight and be very patient. It is getting close to some really good opportunities.

This market is on a mission! Made a higher high on Friday on the S&P 500/ES. We have not seen this area since 2007. I am long this market and will stay this way until the market  gives me a reason to short.

I spent most of the long weekend studying the market. I am reading a book by Mark Douglas called The Disciplined Trader. It is very insightful. This book came from a recommendation by Tom “Dutch” Holland with Masterswingtraders.com. I am now a member of his site. Well with all of that said we are testing everything before going live with any of it. So I imagine I will be in study mode for a while.

One of the main lessons I have been reminded of is that the markets are reality. So seeing the Santa Clause Rally this morning will be interesting to watch. Whether we are right or wrong does not matter. It is whether we control our losses and make some money that is important.

I am not comfortable with the low volume. All of the majors SPY, DIA, QQQ & IWM are at resistance. The SPY and the DIA moved above one line of resistance and are facing another line pretty close to where they are. The QQQ and IWM are right a their diagonal resistance. With the low volume I am going to stay on the sidelines. I am looking into starting with masterswingtraders.com. I feel they will match the style I am trying to adopt. We shall see.

The big question this week, will the Santa Clause Rally happen? If we get a rally it is like a predictor of the years outcome. In 2008 the Santa Clause Rally did not happen. The markets went down 7+ % during the week after Christmas. After this the markets tanked. I am on the sidelines watching this week. I had a few set ups but the risk was too high for my taste.

Here is the set up for the Santa Clause rally on the market. We are bumping our head at the 126.00 level this morning. I do not think we will break it today. If we do then the Santa Clause rally is in play. I really think it will make the move either down off of this resistance or up from this support. So I just gave an analysis where I am right both ways. Here is the deal though….this is resistance. This dictates what we will do next. I see the job of the trader as finding these pivot points and trading with the momentum. Now I feel it is going to go down Tuesday which is the highest probability. History though brings to light the famous Santa Clause Rally. Let’s see if history holds.

I am pretty confidant the SPY is going to the 126 level by Friday. It is up in pre-market to 124.67 currently. The 126.00 level is where diagonal resistance is holding. If the Santa Clause rally s going to play out we will need the 126.00 level to fail. DIA and QQQ are in basically the same boat. The DIA resistance is horizontal instead of diagonal. The IWM will break the resistance this morning. It will have to deal with the next 2 levels of resistance which are 75.34 and then 77.20.

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