Trade Ideas for 02/03/09

The Dow hit the breakdown point but is still hanging on; nevertheless its chart looks pretty awful. On the other hand, the Nasdaq, Russell and even the financials finished positively today. These mixed messages have been playing out in the market since mid-January, and our portfolio has been the worse for it. The market has been bouncing off breakout and breakdown points, range-bound, and our portfolio has been whipsawed back and forth. From prior experience, when this period ends, the next move will be fast, and the challenge is to be positioned properly when that happens.

All our positions were sold early on when the market took a morning fall, and we entered into our Dow short. This position is intended to be longer-term, as the sell-stop coincides with the "all clear" point for the market. In that sense, it'll act as a hedge for any new long positions we take on. You might have noticed that many false moves (e.g., yesterday's buy, today's sales) have taken place in the first 45 minutes of trading each day, and I continue to recommend waiting until 10:15 ET before entering orders.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DOG	75.51	75.10	-0.5%	70.99	N/A	Chart

Time for a bounce, maybe? Let's see if there's anything to be read in the upticks found in the non-Dow averages.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
TBT (Ultrashort 30-Year Bonds)	48.11	45.68	N/A	Chart
DDR (Developers Diversified Re)	5.31	4.55		Chart

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