Trade Ideas for 07/01/09

The S&P made it to a two-week high in the early going, only to be soundly rejected at the 930 level, falling below the lows of the prior two days before stabilizing. Because of this downside breach, the bulls now have something to prove. They can do so by printing another higher high tomorrow or later this week. The action feels tired though, and the bears have a great opportunity to strike.

We were stopped out of DGP today and bought NVAX, which rocketed. It can certainly go higher, but as a measure of caution I recommend taking at least 25% of the position off the table at tomorrow's open.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
NVAX	2.62	3.28	+25.2%	2.62	Book profit on at least 25% at the open tomorrow.	Chart

A bunch of ideas for tomorrow

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
TWM (Ultrashort Russell 2000)	43.59	41.60	N/A	Chart
VXX (VIX Volatility Index Short-Term Futures ETN)	70.31	65.86	N/A	Chart
ABAT (Advanced Battery)	4.11	3.84	N/A	Chart
ADCT (ADC Telecomm.)	8.16	7.79	N/A	Chart
LWSN (Lawson Software)	5.64	5.52	5.40	Chart

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

Trade Ideas for 06/30/09

The bears tried taking the market down early on, and when they failed, the bulls took over. Since Tuesday's low, each day has seen higher highs in the S&P versus the prior day. Over the past couple of sessions the pace of the rise has slowed, but I'm not sure how to read it. While the bulls have been winning the battles the past week, overall they haven't gotten very far; at the same time this could be the prelude to a more powerful up move. We sold the last of our shorts today, SCC for a profit.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DGP	20.26	20.11	-0.7%	19.64	N/A	Chart

Mostly longs for tomorrow.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
NVAX (Novavax)	2.62	2.42	N/A	Chart
CPSL (China Precision Steel)	2.73	2.49	N/A	Chart
LWSN (Lawson Software)	5.64	5.40	N/A	Chart
SDS (Ultrashort S&P 500)	56.16	54.31	N/A	Chart

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

Trade Ideas for 06/29/09

From a low early Tuesday to a high late Friday, this market managed a sustained bounce off the golden cross (where the 50-day moving average crosses above the 200-day). Nevertheless, with respect to the S&P, Friday was a down day, and this week was a down week—the first time we've had two consecutive down weeks since the March rally began. So a bit ambiguous as to what type of market we have right now.

If the medium-term trend has changed to a downtrend, then this bounce is in keeping with the way declines unfold, and next week should see resumption of the downward course. At the same time, the action from the high on June 11 until Tuesday's low is not out of character as a correction within a larger uptrend. It's up to the market to show us which way it'll go. For now, setups in the inverse ETFs don't have great risk-to-reward profiles, so if the market is set to go down next week, I hope it'll give us a better setup to get aboard. Friday SRS was stopped out for a loss, and we bought DGP.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SCC	61.84	63.51	+2.7%	62.62	N/A	Chart
DGP	20.26	20.24	-0.1%	19.64	N/A	Chart

For Monday, a few long-side charts that look good, and one of the less-bad setups in an inverse ETF.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
HMIN (Home Inns and Hotels)	16.68	15.99	15.64	Chart
YGE (Yingli Green Energy)	14.07	12.99	N/A	Chart
BVF (Biovail)	13.76	13.46	N/A	Chart
SKF (Ultrashort Financials)	45.17	41.69	N/A	Chart

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

Trade Ideas for 06/26/09

A very weird session the past day. Overnight S&P futures rocketed to 3-day highs, then fell back to such an extent that the S&P opened near the prior close. Whereupon the market shot back up to the overnight highs and surpassed them, closing near the high of the day.

A rally of today's magnitude so soon after the largest decline in three months (-70 S&P points from June 11-23) does not mean the downtrend is over. A head-and-shoulders top, for example, features those very characteristics. However, it does put the bears on notice. Should this rally continue for another 10 points or so, the pattern shifts in favor of the bulls.

We were stopped out of DUG and QID today, the former for a nice gain.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SCC	61.84	63.07	+2.0%	62.62	N/A	Chart
SRS	21.51	20.45	-4.9%	20.12	N/A	Chart

Some long picks for tomorrow to balance out the bearish bias.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
RBY (Rubicon Minerals)	3.29	3.11	2.89	Chart
DGP (Gold Double Long)	20.26	19.95	19.64	Chart
BRCD (Brocade)	8.02	7.49	N/A	Chart
SKF (Ultrashort Financials)	46.62	42.58	N/A	Chart

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

Trade Ideas for 06/25/09

A huge morning rally lost steam by mid-day, and then the market fell even more steeply once the Fed announcement was made. Still, most averages, with the glaring exception of the Dow, closed in the green for the day. The Dow's exception is glaring because that average is supposed to house the market leaders, and leaders lead. We were stopped out of SMN today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DUG	16.54	19.47	+17.7%	18.62	N/A	Chart
SCC	61.84	66.69	+7.8%	62.62	N/A	Chart
QID	32.81	33.50	+2.1%	32.19	N/A	Chart
SRS	21.51	21.00	-2.4%	20.12	N/A	Chart

Staying biased to the short side. SCC is a re-up; if elected, set the sell-stop for all shares to 65.39 (or the low of the day, whichever is lower).

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SKF (Ultrashort Financials)	46.62	43.12	N/A	Chart
SDS (Ultrashort S&P 500)	59.39	56.49	N/A	Chart
TWM (Ultrashort Russell 2000)	46.36	43.97	N/A	Chart
SCC (Ultrashort Consumer Services)	68.01	65.39	N/A	Chart

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

Trade Ideas for 06/24/09

Narrow range consolidation today to follow yesterday's drop. The chart of the S&P now features a golden cross, the 50-day moving average crossing above the 200-day, but with the cross and both averages above today's high, it might have occurred under more auspicious circumstances.

Having now closed twice consecutively below the 50-day moving average (without having closed once below since late March), I'm going to continue looking for more bearishness in this market.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DUG	16.54	19.67	+18.9%	18.62	N/A	Chart
SCC	61.84	67.70	+9.5%	62.62	N/A	Chart
QID	32.81	34.59	+5.4%	32.19	N/A	Chart
SMN	19.86	20.65	+4.0%	19.49	N/A	Chart
SRS	21.51	21.84	+1.5%	20.12	N/A	Chart

Some more short-biased ideas for tomorrow. At 2:15 PM ET, the Fed is expected to make its decision on short-term interest rates and general remarks on the economy. We might have a very slow day until that announcement is made.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
VXX (VIX Short-Term Futures ETN)	80.28	77.16	75.49	Chart
SKF (Ultrashort Financials)	46.62	44.57	41.59	Chart
SCO (Ultrashort Crude Oil)	18.76	17.21	N/A	Chart

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

Update 6/23/09

Big break to the downside today; it remains to be seen whether this entire move is a correction or the start of a new downtrend. We sold APOL and bought SMN and SRS today. Let's wait for some consolidation before entering new positions.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DUG	16.54	19.88	+20.2%	18.62	N/A	Chart
SCC	61.84	66.80	+8.0%	62.62	N/A	Chart
QID	32.81	34.58	+5.4%	32.19	N/A	Chart
SMN	19.86	21.35	+7.5%	19.49	N/A	Chart
SRS	21.51	22.25	+3.4%	20.12	N/A	Chart

Trade Ideas for 06/22/09

A little bit more upside today, but the price action was unconvincing, as the S&P proved unable to make it above Tuesday's highs. The Dow closed in the red, to boot. A bearish bias is still warranted.

We bought APOL today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DUG	16.54	18.13	+9.6%	14.99	N/A	Chart
SCC	61.84	63.91	+3.3%	58.27	N/A	Chart
QID	32.81	32.63	-0.5%	30.85	N/A	Chart
APOL	67.11	66.19	-1.4%	65.49	N/A	Chart

For Monday, a few more short ideas, and revisiting the prospects for gold on a bounce at the 50-day moving average.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SMN (Ultrashort Basic Materials)	19.86	18.21	N/A	Chart
SRS (Ultrashort Real Estate)	21.51	20.12	N/A	Chart
ZSL (Ultrashort Silver)	8.89	8.44	N/A	Chart
ABX (Barrick Gold)	33.61	33.19	32.49	Chart

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

Trade Ideas for 06/19/09

Nice consolidation today, and now the short ETFs are set up well for new entries.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DUG	16.54	17.86	+8.0%	14.99	N/A	Chart
SCC	61.84	64.38	+4.1%	58.27	N/A	Chart
QID	32.81	33.28	+1.4%	30.85	N/A	Chart

Most of the short ETFs have good entries; tomorrow's first three ideas are just a sampling. TZA is a Direxion 3x ETF, so sell it by tomorrow's close. However, if TZA is elected and closes near its high, hold at least 1/2 position overnight. VXX is an instrument designed to track the VIX Volatility Index, which has tended to move inversely with the market. And finally, APOL is a long idea that has a history (along with its sector peers) of not tracking with the overall market.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SMN (Ultrashort Basic Materials)	19.86	18.40	N/A	Chart
SKF (Ultrashort Financials)	45.68	42.90	N/A	Chart
TZA (Small Cap Bear 3x)	24.51	22.66	N/A	Chart
VXX (VIX Short-Term Futures ETN)	80.28	76.93	N/A	Chart
APOL (Apollo Group)	67.11	65.41	N/A	Chart

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

Trade Ideas for 06/18/09

Small range day today, and with the open and close at the same price, we printed a doji on the daily candlestick chart. The "obvious" thing for the market to do now is bounce, as momentum has slowed right at the 200-day moving average, and the doji tends to mark a turning point of some degree. The market often does the "obvious" thing, although it's important not to depend on that.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DUG	16.54	17.67	+6.8%	14.99	N/A	Chart
SCC	61.84	64.59	+4.4%	58.27	N/A	Chart
QID	32.81	33.16	+1.1%	30.85	N/A	Chart

Gold is at an interesting place, having corrected down to its 50-day moving average. It could bounce here, so I've picked a couple miners that could work. Or it might just keep correcting, so an inverse gold pick as well. Meanwhile, ABK is a short-squeeze candidate.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
NG (Novagold)	5.22	4.69	4.40	Chart
AUY (Yamana Gold)	9.42	8.84	N/A	Chart
GLL (Ultrashort Gold)	15.42	14.94	N/A	Chart
ABK (Ambac)	1.31	1.16	N/A	Chart

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

Update 6/17/09

The mood has quickly turned from bullish to bearish. Perhaps too quickly. After closing just about at the lows of the day, the S&P (Chart) is now just a hair above its declining 200-day moving average, as good a place as any to consolidate. The last time we saw two consecutive red candles with little to no shadows (i.e., something close to two red Marubozu candles) was late March, and back then a period of consolidation followed. Of course, with all the pent-up bearishness that has built up the past 3 months, the market may just continue plunging tomorrow. It's worth noting, however, that downward momentum has slowed a little bit: today's candle is shorter than yesterday's.

We sold FITB for a small profit. For tomorrow, and probably until we get some consolidation, no new signals. For those with a bearish bias, yesterday's buy points for QID and DUG, while possible, look a bit far off. Prices are likelier to revisit the day's lows in those issues, as well as other inverse ETFs.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DUG	16.54	17.14	+3.6%	14.99	N/A	Chart
SCC	61.84	65.96	+6.7%	58.27	N/A	Chart
QID	32.81	33.82	+3.1%	30.85	N/A	Chart

Update 06/16/09

The two weeks of coiling ended in range expansion to the downside today, and we had the lowest close on the S&P this month. Perhaps the slowed momentum, lack of volume and breadth, and negative divergences on practically every oscillator has finally caught up with the market. I'm sure we'll find out soon.

We sold SSO and SPAR for profits, and TIE for a small loss at a price a bit less than the sell-stop (since it opened below that level). We also bought DUG and QID.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
DUG	16.54	16.48	-0.4%	14.99	N/A	Chart
FITB	7.42	7.57	+2.0%	7.47	N/A	Chart
SCC	61.84	63.88	+3.3%	58.27	N/A	Chart
QID	32.81	33.15	+1.0%	30.85	N/A	Chart

No new ideas for tomorrow. Whether we're going up or down, I'd like to see some consolidation before entering new positions. Not really part of this system, but if you're short-biased, QID and DUG on a pullback to their gaps might work as an entry, risking to the sell-stop. (QID around 32.20 and 31.60 and DUG around 16 and 15.50.) Don't risk as much as you would normally since this isn't buying on a breakout.

Addendum The prices in the prior paragraph for QID & DUG (namely, 32.20 & 31.60 for QID, and 16 & 15.50 for DUG) are two potential buy prices, as both charts have open gaps at their respective prices. Whichever price(s) that you choose, the idea is to risk to the sell-stop in the Current Holdings table (30.85 for QID and 14.99 for DUG). Thanks to George for pointing out that what I wrote above doesn't make that much sense!

Trade Ideas for 06/15/09

After briefly breaking out of the 925-950 range on Thursday, it appears the S&P has fallen back in, given Friday's minimal movement. My take is that the fireworks have been postponed till next week. Whether the move is to the upside or downside, there is explosive potential.

Friday we sold CPSL for a profit and bought SRS and SCC in the morning swoon. By the close, we were stopped out of SRS.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SSO	25.06	27.80	+10.9%	26.68	Consider selling on a close < 27.13	Chart
FITB	7.42	8.03	+8.2%	7.47	N/A	Chart
SCC	61.84	61.20	-1.0%	58.27	N/A	Chart
SPAR	10.48	11.21	+7.0%	10.75	Consider selling on a close < 10.95	Chart
TIE	11.03	11.03	+0%	10.79	N/A	Chart

Sticking with this month's theme

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
CENX (Century Aluminum)	8.06	7.34	N/A	Chart
OMTR (Omniture)	13.56	12.99	12.74	Chart
DUG (Ultrashort Oil & Gas)	16.54	15.70	14.99	Chart
QID (Ultrashort Nasdaq-100)	32.81	31.74	30.85	Chart

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

Trade Ideas for 06/12/09

The market's positive response to today's 30-year Treasury auction was enough to lift the S&P out of its range to a new uptrend high, but this was for fewer than 10 points and less than 3 hours as price plunged below the 950 level by the end of the day, closing on a strong down tick. The violation of the range means that rangebound trading is probably over. The market may have exhausted itself into the new high, meaning the uptrend is now over. If so, this fits with the observation that bear market rallies end on good news (in this case, a positive treasury auction), and with the negative divergences across numerous oscillators as yet unresolved. But, if the market didn't exhaust into the new high, then the late-day pullback was a bear trap, and the 960-980 level is next. A break below 930 supports the former scenario, and new uptrend highs the latter.

In light of the increased downside risk, I've tightened stops on our current holdings. This precautionary measure has often caused us to get stopped out of positions on the early side. If you'd rather be more generous, you can use yesterday's sell-stops instead (or mix and match).

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SSO	25.06	27.62	+10.2%	26.68	N/A	Chart
FITB	7.42	7.77	+4.7%	7.05	N/A	Chart
CPSL	2.26	2.81	+24.3%	2.66	N/A	Chart
SPAR	10.48	11.26	+7.4%	10.75	N/A	Chart
TIE	11.03	11.37	+3.1%	10.79	N/A	Chart

50/50 long & short, and a warning that SCC is low-volume.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
ANAD (ANADIGICS)	4.54	4.28	4.22	Chart
HW (Headwaters)	5.09	4.71	4.57	Chart
SRS (Ultrashort Real Estate)	19.43	18.32	N/A	Chart
SCC (Ultrashort Consumer Services)	61.84	59.69	58.27	Chart

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

Trade Ideas for 06/11/09

Today the S&P traversed its entire June range 1.5 times. It gapped up at the open around 950, dropped down to 928, then retraced half that decline by closing at 939. After a week of this holding pattern, the market may be ready to take off one way or the other tomorrow, with the catalyst being the auction of the 30-year note.

Today we sold UWM for a loss and UYG for breakeven and bought FITB. Today's gap up open was a prime spot to book some profit, especially on the laggards.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SSO	25.06	27.38	+9.3%	26.43	N/A	Chart
FITB	7.42	7.34	-1.1%	6.90	N/A	Chart
CPSL	2.26	2.82	+24.8%	2.49	N/A	Chart
SPAR	10.48	11.30	+7.8%	9.90	N/A	Chart
TIE	11.03	11.04	+0.1%	10.31	N/A	Chart

50/50 again...

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
DXD (Ultrashort Dow 30)	46.46	44.29	N/A	Chart
SKF (Ultrashort Financials)	41.83	38.93	N/A	Chart
NGD (New Gold)	2.89	2.64	N/A	Chart
ACF (AmeriCredit)	14.41	13.46	N/A	Chart

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

Trade Ideas for 06/10/09

Not much follow-through in either direction with today's market, although at the high we were marginally higher than yesterday's closing-hour high. For now, May's 50-point range (875-925) has been swapped for June's 25-point range (925-950). The market can break out in either direction.

We bought TIE today. Once again, given the maturity of this rally and the amount of exposure to the long side, I recommend booking partial profit on a gap up or advantageous close tomorrow.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SSO	25.06	27.47	+9.6%	26.43	N/A	Chart
UYG	4.11	4.29	+4.4%	4.11	N/A	Chart
CPSL	2.26	2.72	+20.4%	2.39	N/A	Chart
UWM	20.86	20.65	-1.0%	19.85	N/A	Chart
SPAR	10.48	11.01	+5.1%	9.90	N/A	Chart
TIE	11.03	10.99	-0.4%	10.31	N/A	Chart

50/50 longs and shorts, again.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
DXD (Ultrashort Dow 30)	46.46	44.64	44.31	Chart
FITB (Fifth Third Bancorp)	7.42	7.14	6.90	Chart

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

Trade Ideas for 06/09/09

The market gapped down at the open and continued falling for the first half of the day. After stabilizing, the bulls mounted a huge surge in the final 45 minutes, closing the opening gap and getting the major averages into the green in a shockingly short amount of time, before dropping with almost as much gusto to close in negative territory. Altogether a crazy day in the market.

The entire whipsaw move today was contained between last Wednesday's low (Wave 4 bottom) and Friday's high (putative Wave 5 peak). Whichever level is breached first will probably lead the way for the next 1-4 weeks. While both paths are valid, I'm suspicious that today's late surge might be a B wave. B waves exist to fool: to fool bulls into buying the dip, and bears out of their shorts. The price action itself was a swift and sudden campaign that was unable to breach prior highs, and that further began to deteriorate rapidly. In other words, a campaign high on shock and awe, low on substance. The other observation worth noting is that the turn occurred near the prior Wave 4 low, which is a rough target for the corresponding corrective wave. The next rough target would therefore be the S&P 880 level, which was the site of the Wave 4 low from May 22. Let's see which way the market follows through tomorrow before arriving at a conclusion.

Today we sold JACK for a loss, ASIA for breakeven and HW for a quick profit. No new purchases.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SSO	25.06	27.26	+8.8%	26.43	N/A	Chart
UYG	4.11	4.26	+3.6%	4.11	N/A	Chart
CPSL	2.26	2.61	+15.5%	2.39	N/A	Chart
UWM	20.86	20.50	-1.7%	19.85	N/A	Chart
SPAR	10.48	10.64	+1.5%	9.90	N/A	Chart

Again, 50/50 longs and shorts for tomorrow.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
FITB (First Third Bancorp)	7.42	6.90	N/A	Chart
TIE (Titanium Metals)	11.03	10.31	N/A	Chart
DXD (Ultrashort Dow 30)	46.93	44.45	44.31	Chart
SRS (Ultrashort Real Estate)	18.51	17.42	16.77	Chart

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

Trade Ideas for 06/08/09

On the back of the unemployment numbers, the market gapped up to new highs, then fell pretty hard before bouncing around. The close was mixed, with a positive Dow but negative S&P. Today's high at 952 may have marked the peak of the 3-month rally, but I wouldn't count on it. The pullback from the high, while dramatic, really didn't fall far enough. It could go either way on Monday, but even if the high didn't happen today, it appears to be coming soon.

We bought SPAR, and may have booked some profit on that trade at the close. For Monday, I'd again recommend booking some profit on a gap up, or on an advantageous close.

Addendum: ORI gapped above the buy price in the first minute of trading, but by the second minute it had fallen below the price, and it stayed below for the rest of the day. In other words, take out the first minute's worth of trades, and ORI would not trigger a purchase. Just a reminder that the system ignores the first minute of trading, so ORI is not included in the list of holdings.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SSO	25.06	27.48	+9.7%	26.43	N/A	Chart
ASIA	20.68	21.38	+3.4%	20.70	N/A	Chart
UYG	4.11	4.22	+2.7%	3.94	N/A	Chart
JACK	27.01	27.46	+1.7%	26.79	N/A	Chart
CPSL	2.26	2.67	+18.1%	2.39	N/A	Chart
HW	4.27	4.96	+16.2%	4.39	N/A	Chart
UWM	20.86	20.91	+0.2%	19.85	N/A	Chart
SPAR	10.48	10.64	+1.5%	9.83	N/A	Chart

For Monday, 50/50 on the longs and shorts.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
GRMN (Garmin)	23.68	22.66	N/A	Chart
PMI (PMI Group)	3.01	2.59	N/A	Chart
DXD (Ultrashort Dow 30)	46.93	44.31	N/A	Chart
SKF (Ultrashort Financials)	41.83	38.35	N/A	Chart

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

Trade Ideas for 06/05/09

The market recovered from the recent pullback and rose today, falling just short of filling the gap left by yesterday's negative open. Weak action, however, casts some doubt on the notion that the market can reach new highs without some help from, say, tomorrow's unemployment report. However, the Russell 2000, Apple, Baidu, Google and Goldman Sachs all made new highs. So even if breadth wasn't great, leadership was.

Will the market continue moving up? My Elliott count says it will; there's a little 5-wave pattern beginning from May 26th that implies new highs. But the current move up is the final wave in that pattern, so to optimize the trade we want to get out of our longs soon. Just to be safe, let's take partial profits on our positions at tomorrow's close, or on a sizable gap up open, and by partial I mean at least 20%. There's also the possibility that we get a 5th wave extension, so there's a danger of getting out too early. But at this stage of the game, I'd rather err on the side of fear than greed.

We bought HW and UWM today, and if you took my suggestion from yesterday, booked some profit in one or both.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SSO	25.06	27.45	+9.5%	26.43	N/A	Chart
ASIA	20.68	21.38	+3.4%	20.70	N/A	Chart
UYG	4.11	4.26	+3.6%	3.94	N/A	Chart
JACK	27.01	27.32	+1.1%	26.79	N/A	Chart
CPSL	2.26	2.58	+14.2%	2.39	N/A	Chart
HW	4.27	4.60	+7.7%	3.98	N/A	Chart
UWM	20.86	21.00	+0.7%	19.85	N/A	Chart

Even at this late stage, or perhaps especially so, we might see some stocks really accelerate to the upside. The first three of tomorrow's ideas fit the bill of potential runners. And, just in case we get a reversal tomorrow, I've thrown in a short. All of these should be played small, and strongly consider booking partial profit on an advantageous close.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SPAR (Spartan Motors)	10.48	9.83	N/A	Chart
ORI (Old Republic)	10.71	10.29	N/A	Chart
BARE (Bare Escentuals)	10.41	9.68	N/A	Chart
SDS (Ultrashort S&P 500)	55.38	53.16	N/A	Chart

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

Trade Ideas for 06/04/09

We did get a gap down today after all, but it was followed by further selling. The pullback has deepened, exposing some weakness in this rally. The possibility that yesterday's high was the peak of the rally is remote given the resilience of the bulls; it's more likely, given recent history, that the market will mount a charge to new highs over the next few sessions. The day ended on a sharp uptick, perhaps marking the beginning of such a charge.

The June 4-8 timeframe marks 90 days from the rally's beginning, depending on whether you count the rally as having started on the 6th, 7th, 8th or 9th of March. This is a significant number in Gann cycle theory, as are 45 and 60. Upon review, the 45-day cycle completed on April 20-21, marking a peak and a low. The 60-day cycle, too, marked a peak of some degree with the May 8th high, but eventually this market overcame that. These time cycles end up being turning points a lot of the time, but a better way of thinking of them is as levels of resistance. We tend to think of resistance as price levels, but the time dimension is just as "real." With the 90-day cycle almost upon us, we may see a turning point by Monday. My preferred Elliott count has the next move up as the final subwave up in this 3-month rally. Other confirming indicators include the negative divergences in oscillators such as MACD, RSI, on-balance volume, money flow, and also volume, all on the daily chart with respect to the May 8th high. A preponderance of evidence suggests that it's time to play our final longs. But, and this is a big but, if the market should overcome all these obstacles, it will have a very solid base from which to rally.

We sold DGP today; this was one of our lengthier holds from the beginning of May. It was a solid performer, but not a huge winner at around +14%.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
SSO	25.06	26.95	+7.5%	26.43	N/A	Chart
ASIA	20.68	21.95	+6.1%	20.70	N/A	Chart
UYG	4.11	4.03	-1.9%	3.89	N/A	Chart
JACK	27.01	27.84	+3.1%	26.79	N/A	Chart
CPSL	2.26	2.45	+8.4%	2.39	N/A	Chart

The following ideas look poised to benefit from a final spike to new highs. If any turn out to be big winners on the day, I'd look to book partial profits.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
HW (Headwaters)	4.27	3.98	3.92	Chart
UWM (Ultra Russell 2000)	20.86	19.85	N/A	Chart
PAG (Penske Auto Group	15.38	14.30	N/A	Chart
TIF (Tiffany)	31.32	30.09	N/A	Chart

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

Trade Ideas for 06/03/09

A one-day consolidation like we had today is sometimes enough of a pause before a strong rally continues. However, the day ended on a down tick and a break of the 2-day channel (see chart of SPY below), so the short-term message I'm getting is that more consolidation is required. But this might not be anything more than a gap down open followed by a rally right out of the gate. The broader message that the market sent with Friday's and Monday's 40+ point advance (on the S&P) is that it wants to go up.

RATE had a nasty open after a Citigroup downgrade, stopping us out, before rallying to new highs. I guess Citi & friends just wanted to scoop up some shares on the cheap? If so, it worked on us.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	22.18	+18.7%	21.29	N/A	Chart
SSO	25.06	27.72	+10.6%	25.29	N/A	Chart
ASIA	20.68	21.28	+2.9%	20.19	N/A	Chart
UYG	4.11	4.12	+0.2%	3.89	N/A	Chart
JACK	27.01	27.93	+3.4%	26.79	N/A	Chart
CPSL	2.26	2.67	+18.1%	2.39	N/A	Chart

While this is a mature rally, being almost 3 months old (bear market rallies last on the order of 2-3 months, and YES this is a bear market rally), it can still go pretty far in its late stages. We give the trend the benefit of the doubt, but hedge a bit by playing smaller size.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
ABK (Ambac)	1.38	1.30	1.24	Chart
FLEX (Flextronics)	4.31	4.06	3.89	Chart
VMW (VMWare)	32.38	31.58	30.90	Chart
FST (Forest Oil)	20.36	19.66	18.90	Chart

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

Trade Idea for 06/02/09

The new month began by resolving Friday's cliffhanger blow-off top as the beginning of an uptrend of some degree. Across the board all sectors were up, with the exception of gold and the mining sector. Most sectors made new highs, as did the major averages, and the S&P closed above its 200-day moving average. The Dow didn't make it quite that far, but it also underwent an overhaul, losing GM and C while gaining TRV and CSCO.

Despite these positive developments, a couple of troubling divergences stood out for me. First, the VIX volatility index, which had been moving inversely with the market, rose several percent today. Secondly, despite broad strength, the financial sector remains several percent away from making new uptrend highs, and it missed by a hair getting above its 200-day moving average. This sector had been a leading one this entire rally, so either it's to be a laggard this go-round or it's a sign of trend change. Looking at subsectors, the Philadelphia Bank Index had a negative close and the KBW Regional Banking Index bounced off resistance at its 50-day moving average after falling below it a couple weeks ago.

This latest phase of the rally is still in the early stages, and there's time for these discrepancies to be resolved. As for our holdings, TWM was killed by the rally, and we bought all the longs from yesterday's list—at reduced risk, since the buy points were breached within the first 45 minutes of trading.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	21.85	+17.0%	21.29	N/A	Chart
SSO	25.06	27.60	+10.1%	25.29	N/A	Chart
ASIA	20.68	21.08	+1.9%	20.19	N/A	Chart
RATE	30.77	31.06	+0.9%	29.63	N/A	Chart
UYG	4.11	4.27	+3.9%	3.89	N/A	Chart
JACK	27.01	27.62	+2.3%	25.69	N/A	Chart
CPSL	2.26	2.42	+7.1%	2.22	N/A	Chart

After today's huge surge, finding new ideas will require a pullback or consolidation. The following idea is the only one I was able to find that looked halfway decent.

New Trade Idea

Ticker	Entry	Exit A	Exit C	Chart
CENX (Century Aluminum)	6.54	6.09	5.79	Chart

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