Trade Ideas for 05/26/09

Price meandered all day Friday in mostly positive territory but ended on a strong down tick. As expected, volume was light. The daily charts are now set up to either collapse or to take off. The two scenarios I outlined a few days ago both remain valid. In the comparison below, please note that the price labels on the lows are incorrect; last Friday's low was 878.94 and Thursday's was 879.61.

As before, a break below 875 overwhelmingly tilts the scale in favor of downside. The overall picture resembles a topping pattern rather than a basing one. But the upside bias has been so strong that it can't be counted out. Whatever the case, be prepared for range expansion (meaning a huge jump in price one way or the other).

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	21.15	+13.2%	20.26	N/A	Chart
SSO	25.06	24.41	-2.6%	23.95	N/A	Chart
HNI	16.84	17.11	+1.6%	16.86	N/A	Chart

My ideas for Tuesday are tilted to the short side, with ASIA being the lone long idea. Of the short ideas, TWM is presented twice with different buy prices, the lower price being the more aggressive entry. As before, FAZ is a day-only idea, but should it close at the high of the day, consider holding a portion overnight.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
ASIA (AsiaInfo)	20.68	19.60	18.79	Chart
TWM (Ultrashort Russell 2000)	50.67	48.30	44.47	Chart
TWM (Ultrashort Russell 2000)	52.06	48.30	N/A	Chart
DXD (Ultrashort Dow 30)	51.89	49.94	47.39	Chart
FAZ (Financial Bear 3x)	5.71	5.25	N/A	Chart
SMN (Ultrashort Basic Materials)	20.43	18.99	17.85	Chart

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