Trade Idea for 8/22/08

The new trends have really announced themselves today. Following on the previous days' action, gold and oil have solidified countertrend moves. I don't believe the absolute bottom has been registered in these two sectors — the downtrends, while vicious, are just too new. So my guess is that we'll rally to the 200-day moving average and then reverse again. Don't get too comfortable! Meanwhile, the chart of SDS (inverse S&P 500) is now looking better to me than that of the S&P. As we head into what may be a turning point, odds are not looking good for a rally in the general market.

Capitalizing on strong oil, some of us may have been quick enough to snag some of yesterday's idea, TTI. It gapped up on the open above the entry price, opening 8 cents higher at 22.15. It hit a high of 22.76 and has been pulling back since. My guess is it will pull back a bit more, then pivot. I didn't buy any as I don't like to get involved at the open — been fooled too many times I guess; I almost bought a reduced portion on a pullback to 22.20 about 20 minutes later but chickened out, pulling the order at the last minute, watching as it hit 22.16 and then took off for good. Stocks do gap above the entry prices; I discuss a few strategies for dealing with this scenario in the article How To Trade My System. Anyway, for purposes of tracking the performance, I'm going to assume a makeable entry price of 22.20. If you bought in, move stops to 20.88 regardless of whether you traded in an Aggressive or Conservative style.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Exit A	Exit C	Chart
TTI	22.20	22.50	+1.4%	20.88	20.88	Chart

As for STEC and LVLT, the one never got going, and I can't say I like the chart of the other anymore, so how about something completely different.

Ticker	Entry	Exit A	Exit C	Chart
VISN (VisionChina)	20.01	18.99	18.11	Chart

Please refer to "How To Trade This System" (right-hand side) to read this table.