Trade Ideas for 01/16/09

Some high drama in the equity markets today. The day began with steep selling right at the open, taking the market down to levels not seen since the huge crash of late November. This was followed by an even steeper ascent to new highs for the day. In the last hour, the markets turned again, and yes, it was steep. This kind of action you won't see every Thursday, but if it were to happen on any day of the week, I'd place my bets on Thursday.

SMN nearly hit its 50-day moving average, then sold off hard. Short-term momentum is with the bulls right now, so I would look to sell the position if the market allows it a bounce to the $42 level. New highs in SMN (and therefore lows in the major indices) are looking less likely given the very sharp drop from today's high (10% in 2 hours). But you never know.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
SMN	40.31	40.65	+0.8%	37.97	Consider selling on strength	Chart

It feels like the market has turned at least a temporary corner. Even if it turns out the market was able to dig in its heels this afternoon, it's still a long way from these levels back up to the highs of January 6th, which we'd have to break to confirm a pivot. The following ideas might work out for a couple days, but in the event I'd look to book at least some profit pre-emptively. After a nice little uptrend to close out 2008 and ring in 2009, the market is back to acting like it's October/November.

Trade Ideas for 01/16/09

Ticker	Entry	Exit A	Exit C	Chart
MR (Mindray Medical)	21.81	19.99	N/A	Chart
BEAV (BE Aerospace)	9.07	7.99	N/A	Chart

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