Trade Idea for 02/26/09

Sadly, that could've been it for this countertrend rally. The trendline I drew yesterday on SSO has been broken. But let's see; the market could surprise with another surge upward. The chart would look a lot better if such a surge occurred, or at least a few more days of sideways action; this countertrend move doesn't stick out enough yet, and it's invisible on the weekly chart.

The bears have been salivating lately, and they have proven very effective in shutting down any rally. However, they might be getting worked up over something that's less than the opportunity of a lifetime. How far might the market fall past the November lows? I'm ruling out 400, and I don't think the 660 level is doable either (both figures in terms of S&P 500). When this down leg concludes, we'll finally have completed Primary A, which I had previously thought done in October and then November of last year, but no, it just wouldn't die.

DXO had a good day today, but so near the 50-day moving average; I'm going to tighten stops. We bought everything on last night's list, which paradoxically included two longs and a short, but that's a testament to how volatile a market this is.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DXO	2.01	2.42	+20.4%	2.30	Consider booking profit at the 50-day moving average	Chart
RWM	80.01	79.92	-0.1%	77.27	N/A	Chart
CYBS	12.48	12.33	-1.2%	11.45	N/A	Chart
VMI	45.21	43.05	-4.8%	41.17	Consider selling on a close < 42.88	Chart

Like I said, DXO is so close to the 50-day moving average, and oil needs to correct before it can rise again. So tomorrow's idea is taking a chance on that correction.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
DUG (Ultrashort Oil & Gas)	30.01	26.79	N/A	Chart

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