Tuesdays Gameplan

Longs: WFC, JPM, CDE (28.00), UAL (20.00).

Breakouts: COF>49.75, DIS>42.00, NVLS>45.75, X<27.50. Volatility: GILD (R=45.30 S=44.70). Shorts: COH (76.50), COP (77.00), EBAY (36.75). Notes: XLF > 14.85 could be the beginning of a strong day in the sector. I will be watching XLF closely today. SLV is also on the verge of ripping past resistance at 34.50. Gold seemed to have saturated yesterday with natural gas looking like its heading to test the lows to possibly form a shakeout.

VIX@18.20, TLT gapped higher and held yesterday, USD/JPY continues to be strong, EUR/USD range bound, gold slightly higher and oil slightly lower.

As for the SPY it will be key to watch whether it can hold above 137.00, a move lower could see the SPY test 136.00, QQQ has a clear trendline that started on the gap after the second of Feb, the trendline is visible on the hourly chart and any breakout that line could see cascade selling in the NASDAQ index. Quantitative studies are bearish.

My approach for the day will again be conservative, I traded well yesterday but didn't trade optimally, my trade in YUM could have been handled better. My analysis says that we are resigned to a dip, however, it is important to remember that we are in a bull market, most shorts will be met by buying unless a catalyst hits the market that shakes the belief that the Fed will rescue the market. That being said, we are in an overbought bull market, at these levels caution must be exercised.