Trade Ideas for 9/12/08

The bulls took the ball today and ran with it. It appeared the bears would be in trouble this morning when the major indices gapped down. Seemingly a bearish sign, but as we are well aware, gaps in the major indices have been faded without fail the past few weeks. And sure enough, the gap down was the sign the bulls were waiting for, and they quickly took control and ruled the day. We actually had an outside reversal day today. So what's next?

The picture is less clear because now there are solid technical arguments to be made for both a bullish and bearish stance. On the one hand there's the successful defense of a support level today, in what could turn out to be a double bottom. On the other hand, the big picture still points downward. It's as though the battle that took place a couple weeks ago is now taking place on different ground. Also, the number and frequency of reversals is compounded by the magnitude of each move. These are huge reversals of fortune from day to day. The last time we saw such action was in the mid-March timeframe, when a temporary bottom was formed. I'm still giving the edge to the bears, but that picture will change if SPY attains and stays above 128.24. My advice as a risk-averse trader is to deleverage (unless you are a day trader). Reduce positions and risk little on new ones. These trendlessly volatile times are the toughest times in the market, and most participants (again, excepting day traders) would do well to sit out.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
SDS	67.81	68.03	+0.3%	65.31	Consider selling to reduce risk	Chart

Carrying over the ideas from yesterday.

Trade Ideas for 9/12/08

Ticker	Entry	Exit A	Exit C	Chart
ATHN (AthenaHealth)	35.04	33.15	31.90	Chart
TV (Grupo Televisa)	24.01	23.19	22.63	Chart

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