Trade Ideas for 11/05/08

The breakout came a day earlier than I expected, so the pullback will be postponed. Buying on pullbacks would work in the current market environment, so if that's the way you prefer to trade, have at it. I would look at former hot sectors like coal, solars, energy, ag chemicals, Brazil, China, and anything else you can think of that was a darling of the stock market the past couple years. Be sure to have a pre-selected sell-stop though. As positive as today's action was, remember that we are in a bear market rally, aka bull trap, aka sucker's rally. The rally won't take us as far as we'd like, and it'll be over much too soon.

What a day for gold and the miners. We bought FCX, which ran up 14%, but a slug of miners did even better than that (SIL, AEM, OZN). We also bought AAPL, which popped and went back to close at the breakout point. Unfortunately EWZ gapped up and ran, so it's not going to appear in the table. We officially sold PQ at the open at 9.88 for a nice percentage gain but only a 1.68R return, since the spread between entry and initial exit was fairly wide. If you still hold it, stop's at 9.09. It's a fairly good setup to add to tomorrow on a breakout to 10.24, although I have a different oil & gas stock among tomorrow's ideas.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
AMAT	12.47	13.31	+6.7%	12.89	None	Chart
SSO	32.31	34.25	+6.0%	31.49	Consider selling on a close < 33.33	Chart
XLK	16.92	17.35	+2.5%	16.49	Consider selling on a close < 17	Chart
AAPL	110.81	110.99	+0.1%	104.85	None	Chart
FCX	30.61	32.94	+7.6%	29.99	Consider selling on a close < 31.68	Chart

The ideas for tomorrow are ones that pulled back or rallied weakly today, which is not such a good sign. In other words, they're weren't front-runners in the rally. Aside from that distinction, their charts are decent.

Trade Ideas for 11/05/08

Ticker	Entry	Exit A	Exit C	Chart
DRYS (DryShips)	23.94	20.25		Chart
WLT (Walter Industries)	39.88	37.21	34.62	Chart
THO (Thor)	18.63	17.34	16.98	Chart
PTEN (Patterson-UTI)	13.76	12.99	12.41	Chart

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