Trade Ideas for 01/28/09

After inching up the past couple sessions, the market heard some rumors after-hours that it really, really liked, namely that the US government (in other words, its people) would be buying distressed debt from banks. Although you and I might not like owning our neighbors' defaulted mortgages, the market certainly likes that we do, and so the financial sector roared higher after hours. Financials are set to gap up on the open. Since they were the main problem weighing the market down, it would seem that a rally is in the offing, especially given the recent upward drift.

Not so fast, though. Tomorrow, at around 2:15pm ET, the Fed makes their statement (FOMC announcement). This bi-monthly (give or take) event tends to act as a catalyst for extreme market volatility. It can cause V reversals and wild whipsaws. I plan to reduce positions in the hours leading up to the announcement, and I might wait on new ideas until after the dust settles.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
SH	79.23	76.23	-3.8%	75.49	N/A	Chart
BEAV	9.07	9.35	+3.1%	8.31	N/A	Chart
AAPL	90.01	90.73	+0.8%	86.49	N/A	Chart
ICO	2.53	2.70	+6.7%	2.23	N/A	Chart
IVN	3.01	2.88	-4.3%	2.59	N/A	Chart

If you decide to elect new positions in the morning, consider reducing prior to the announcement. You can always re-elect after the announcement is made.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
TWC (Time Warner Cable)	18.93	18.22	17.99	Chart
EWC (iShares Canada)	17.16	16.49	N/A	Chart

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