Trade Ideas for 08/07/09

Today's high at 1008 on the S&P may have marked the 5th wave peak of the rally from early July. It's hard to say because price barely broke above Tuesday's high of 1007. The subsequent decline, while sizable (over 15 points), also happened gently. As such, it leaves the door open for a fast move up to the 1010-1020 range before the pullback truly commences. The market's narrow range this week is deceptive: it disguises the fact that we've had two major sectors (real estate and financials) go parabolic, while tech has begun falling apart. Both are signs of an imminent correction.

Today we sold CWTR and bought FCX.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
QID	26.61	26.88	+1.0%	25.92	N/A	Chart
FCX	65.46	63.99	-2.2%	62.49	N/A	Chart

Even though more upside is possible, I think day trades are more effective in capturing that upside should the market go for a final run-up. Instead I'm focusing on the short setups.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
FXP (Ultrashort Xinhua 25)	10.04	9.45	8.99	Chart
VXX (VIX Volatility Index Futures ETN)	61.61	59.07	N/A	Chart
SDS (Ultrashort S&P 500)	46.81	45.20	N/A	Chart

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