Trade Ideas for 02/09/09

Good action Friday in the markets. This could be the start of the market's last hurrah. Of course, since October 10th we've been at a similar point around 7 times, and each time what followed was a precipitous drop rather than a rally. This time, though, looks like it could be for real. While there needs to be a small correction near-term, a pullback to the SPY 85 area looks more like a buying opportunity than a signal to cut losses. The chart of the Dow has been very deceptive, with new lows seemingly every other day since January 20th, while for the other indices, notably the S&P, January 20th has marked a recent low that hasn't been breached.



The likelier possibility now is the final leg of the Primary B wave, rather than new lows. When all is said and done, a price move to around SPY 110 (about +25% from Friday's close) is possible. The key is what happens around that SPY 85 level in the coming days. If it ends up being well-defended, then this rally starts to look very good.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DOG	75.51	71.79	-4.9%	70.99	Consider selling on strength	Chart
TBT	48.11	48.81	+1.5%	47.09	N/A	Chart
BEAV	10.73	11.02	+2.5%	9.81	N/A	Chart
CLR	22.51	22.50	-0.0%	19.87	N/A	Chart

Not many charts have entries because they all overextended themselves Friday. Recent history suggests that they'll come back down soon enough, but this time I hope they show some restraint.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
COV (Covidien)	40.16	39.26	38.57	Chart
CSR (China Security & Surveillance)	5.91	5.57	5.16	Chart

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