Trade Idea for 02/24/09

I was early in reading that the reversal had occurred Friday, as we gapped up on the open and then slid to new lows. Today's drop increases the pressure for a rally to occur, but also decreases the potential target on the kickback rally. Maybe SPY 80-81 is as high as it could go. The most telling thing today was that the financials, which had led the market lower, didn't make a lower low, even as the other major sectors did. Bank of America, Citigroup and Wells Fargo all closed up on the day. The financials have been leading, so today's consolidation off the low in that sector may lead to a similar turn in the rest of the market. We shall see soon enough.

We sold our short positions for decent returns but left money on the table. We bought DXO. PM hit our buy stop at open, and then trailed for the rest of the day. Because we ignore action in the first minute of trading, PM doesn't appear in the current list of holdings.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DXO	2.01	1.90	-5.6%	1.72	1.79	Chart

Preparing for a volatile day tomorrow. New lows are a possibility, but a reversal can happen at any time. Trade with caution.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
UDN (DB US Dollar Bearish Fund)	24.96	24.62	24.37	Chart

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