Trade Idea for 10/07/08

Was that the turn? It's too early to say, but the sheer magnitude of today's drop certainly fit the criteria I mentioned yesterday. Looking over the charts, however, really the only bullish thing I can say is that the charts didn't finish at their lows. Nevertheless, the late-day rally left some really long rat tails (candles with lengthy lower shadows). We will find out just how today fits into the big picture as the week unfolds. With luck there will be some nice setups in the charts when the turn does happen. In the meantime, if you want to speculate on the turn itself, buy some calls on your favorite index-based ETF, risking no more than 1% of your total portfolio, preferably no more than 0.3%.

SCC's parabolic rise made the parabolic performance of SDS on 9/18/08 look pale by comparison. I wouldn't blame you if you took some profits. Hold on if you have the guts; take partial profits if the heights are making you dizzy. We bid adieu to SIGA today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
MI	23.76	21.23	-10.6%	19.99	None	Chart
AIG	3.57	3.87	+8.4%	2.99	Consider selling on a close < 3.63	Chart
SCC	104.53	124.27	+18.9%	104.99	OK to take partial profits discretionarily	Chart

For tomorrow, a chart that is holding up OK.

Trade Idea for 10/06/08

Ticker	Entry	Exit A	Exit C	Chart
BKS (Barnes & Noble)	27.51	25.26	24.28	Chart

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