Trade Idea for 8/25/08

I'm a little scared about the upcoming week. I think we've reached a critical juncture, and soon the market is going to make a strong move one way or the other. Right now it's 50/50 as to up or down. Remember when I said that the SDS was looking better than the SPY? Now they are both looking equally good (or bad). There are four market technicians that I follow, each with his own unique way of looking at the market, each with his own trading timeframe, and here is what they have to say (you can get to their sites by going to Sites I Frequent on the right-hand side of the blog):

Technician	Outlook
The Real Time Trader	"after completing an a-b-c correction...the SKF has bounced to the 50 day and sold off - an a-b-c bounce. That is EW [Elliott Wave] hell - the abc of an abc - a 50/50 shot either way. Which way will it go."
Andy Askey of PTV-Investing	"...The range from October to March is about to complete. It is possible the market is waiting for this cycle before moving up. Or it could collapse [this] Monday. Play it the way it breaks."
TK of Trading with TK	"That's the dilemma of the market. That's why it's 50/50. I don't know — it could go either way....There's a reason to bet up, and there's a reason to bet down."
Brian Shannon of Alpha Trends	"[The SPY getting above the 131.50 level] would perhaps pave the way for higher prices"

Seems like most of us are in agreement that the market is about to make a move, but who knows which way it will be? Our job as low-risk traders is to let the market tell us first. If the SPY should go above 131.50, that would send a message that buyers are in control. Fall below 126 and sellers are in control. As always it's up to you whether you want to place any bets. For me, I'll stick with charts that look strong, but I'll be on high alert. I'll be ready to sell all my positions if things start looking bad on Monday.

Enough theory for now, let's get to the trades. A reader who is also on Zecco Trading (where trade data is viewable to the community) noticed that I bought KRY on Thursday, but it didn't appear in the trade ideas list. The reason is, I don't share all my ideas. I share at most one new idea each day. This idea isn't necessarily going to be the best one on my list, but it will be a liquid stock with what I see as a good balance of reward and risk. If you want more signals, email me and I'll tell you what I'm looking to trade, or you can start a trial subscription with The Real Time Trader. There's a lot of overlap between his signals and mine because the setups I look for are based on what he taught me.

As for our trades, VISN got as high as the buy price between 9:40 and 9:45 Friday and then dropped from there. My order didn't execute, but I know that some others' did. If you got in VISN with the Aggressive-style exit, you'd have been washed out within an hour. Never forget that the market is mean. The Conservative-style position is still alive, but I would get out if it closes below Friday's low. TTI pulled back along with all oil & gas stocks, and I thought that pullback was a bit far. I would get out if it closes below Friday's low as well.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Exit A	Exit C	Chart
TTI	22.20	21.87	-1.5%	20.88, and at market if it closes < 21.57		Chart
VISN	20.01	19.20	-4.0%	N/A - out at 18.99 for -1R/-5.1% loss	18.11, and at market if it closes < 18.50	Chart

As for Monday, given what I said earlier, it's go big or go home. If the market roars, the biggest beneficiaries will be the most speculative sectors. So that's what I'm looking to play.

Ticker	Entry	Exit A	Exit C	Chart
SOL (ReneSola)	19.71	17.86	16.99	Chart

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