Update 03/18/09

The market pulled off an outside reversal to the upside today, hitting new highs in the major indices, albeit on low volume. The rally dramatically announced that it wasn't done yet, and when we went short near the open, we were early. Who knows how much higher the markets can go before the inevitable correction occurs? Tomorrow at 2:15 PM the FOMC (Fed) makes an announcement, and this Friday we have options expiration (one of four expirations that day, thus making it the first of 2009's four quadruple-witching Fridays). Between now and the end of this week, expect great volatility as there are going to be a large number of participants with competing agendas vying for dominance.

We bought SKF and MZZ near the open, and got stopped out of MZZ during the rally. We were also stopped out of AXP and UYG early for profits. Financials, curiously (since they have been leading the market), did not make a higher high today and thus we are still in SKF.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DZZ	22.61	22.63	+0.8%	21.78	N/A	Chart
SKF	149.73	127.92	-14.6%	125.26	N/A	Chart
ITU	9.66	10.90	+12.8%	10.38	N/A.	Chart
DXO	2.51	2.71	+8.0%	2.25	Consider selling on a close < 2.53	Chart
JBHT	19.71	23.30	+18.2%	22.10	N/A	Chart
BHI	29.67	30.79	+3.8%	28.07	N/A	Chart
AVA	13.47	13.84	+2.7%	13.18	N/A	Chart

Nothing for tomorrow. The volatility of Fed announcement days is enough trouble to begin with; on top of that we have a rally that looks very extended on diminishing volume. On further upside or consolidation let's ride our existing long positions. On weakness, we'll get setups in the coming days with better probabilities on the short side.