Trade Ideas for 12/19/08

As much as I thought today's action would provide some answers, it really didn't. The market can still go either way. If sentiment is strong the next few sessions, we might break above that pesky level of resistance (Dow 9,000) that has held through numerous attempts. Or, that level of resistance might prove too strong, and an a-b-c correction will ensue, taking us down slowly in a zig-zag for the rest of the year, although not to new lows. I think the latter course of action is more likely, especially if we get a lower close tomorrow. We've had pretty bullish sentiment (well, by 2008 standards) and that still hasn't proven strong enough to break that 9,000 point barrier.

As for our holdings, I hope some of you took my advice to book profits in the first 15 minutes of trading, and possibly go short as well. Despite the fact that most of our holdings fell several percent, only one fell below its stop-loss price (CNX, for a loss of 1R), although a few are holding on by pennies. If you have a lot of positions and some of them fall below their sell-stops, something to consider doing is selling all your losing positions right then and there. Most of them will end up falling below their sell-stops anyway, so this is a way to further cut your losses. Unless we get a strong reversal tomorrow, it looks like more of these will go the way of CNX.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
VMW	25.21	24.28	-3.7%	23.32	N/A	Chart
JWN	13.06	13.42	+2.8%	12.69	Consider selling on a close < 13.16	Chart
LIHR	16.21	17.34	+7.0%	17.10	N/A	Chart
TRN	15.21	15.35	+0.9%	14.24	Consider selling on a close < 14.94	Chart
X	40.71	37.34	-8.3%	36.06	N/A	Chart
GLBL	3.82	3.34	-12.6%	3.24	N/A	Chart
CHS	3.72	4.06	+9.1%	3.76	Consider selling on a close < 3.85	Chart
FAF	28.07	27.73	-1.2%	25.56	Consider selling on a close < 26.53	Chart
NFLX	29.11	28.24	-3.0%	27.52	Consider selling on a close < 27.74	Chart
V	54.61	54.70	+0.2%	52.73	Consider selling on a close < 54.06	Chart

A couple of well set up charts for tomorrow, but the necessary catalyst is strong bullish sentiment. We've actually gotten that the past two Fridays, so who knows?

Trade Ideas for 12/19/08

Ticker	Entry	Exit A	Exit C	Chart
XIDE (Exide)	5.26	4.79	4.65	Chart
O (Realty Income Trust)	24.66	22.80	21.75	Chart

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