Trade Ideas for 11/10/08

Friday the market spent all day forming a base before breaking to the upside in the final 30 minutes of trading. The bull argument is that the market is forming the right shoulder of a reverse head-and-shoulders pattern, with a target at the 50-day moving average. And perhaps that will happen. On the other hand, the charts of the inverse indices look very well set up. So will it be up or down? The bear argument is stronger because the basic trend analysis supports it. We pretty much have downtrends in the long, medium and short terms.

SIRF fell through the exit price early on Friday but surged in the final 15 minutes of trading. It's up 11% from the buy price, but it fell too far early on to be included in the list of current holdings. If you bought, the sell-stop is 1.09. However, I would also recommend that you sell at least half at Monday's open because it surged right to its 50-day moving average. Most stocks in this environment have been pulling back at least a little bit upon hitting their 50s, and sometimes a lot. Thus, to be safe, book some profit. Otherwise, the system is in cash for the moment.

For Monday I'm playing both sides of the fence. If the market surges, the beneficiaries will be the most speculative sectors. If it collapses, I'd pick on tech.

Trade Ideas for 11/10/08

Ticker	Entry	Exit A	Exit C	Chart
PBW (PowerShares Wilderhill Clean Energy ETF)	9.93	9.33 A		Chart
QID (Ultrashort QQQQ ETF)	73.47	68.41		Chart

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