Trade Ideas for 10/05/09

Early on Friday, the S&P hit the 1020/50-day moving average target, and then spent the rest of the day keeping within a 10-point range above it. A bounce should take place in this range. Even if the market has gone back into medium-term bear mode, it would be a stretch to think that the market will immediately fall back into the mode of a year ago, when the S&P routinely shed hundreds of points per week. This is not to say that the market won't fall some more Monday, but I don't think it can get much lower without bouncing.

For our holdings, what this suggests is that it might make sense to book partial profits in the short positions, particularly if the market gaps down on Monday (and our shorts gap up). On another note, I just realized that the sell-stop I had for DUG last time (14.76) was in error, but it didn't affect our positions.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	10.43	+16.4%	9.39	N/A	Chart
SRS	9.56	10.70	+11.9%	9.05	N/A	Chart
DUG	14.31	15.56	+8.7%	14.31	N/A	Chart
SKF	25.11	27.00	+7.5%	23.99	N/A	Chart
QID	23.17	24.48	+5.7%	22.56	N/A	Chart
TWM	28.06	30.85	+9.9%	27.27	N/A	Chart

Gold/silver are in an interesting spot; they could go either way so for Monday I have ideas in both directions. UUP is not a great trader; it has a history of gapping big and doesn't move very much relative to its price (thus requiring a large dollar investment per dollar risked). I recommend risking half of what you'd normally risk if you choose to play it. Finally, we're going to probe the long side with SSO. It didn't work out last time, but if nothing else it's a way to hedge our current holdings.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
DGP (Gold Double Long ETN)	23.06	22.41	N/A	Chart
ZSL (Ultrashort Silver)	5.91	5.49	5.35	Chart
UUP (US Dollar Index Bullish Fund)	22.97	22.77	N/A	Chart
SSO (Ultra S&P 500)	32.68	31.95	N/A	Chart

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