There's definitely reluctance for the market to fall below a certain point, but that doesn't mean it can't happen. Still, this is the nature of a B wave rally in a bear market—it will continue to test the limits of price even as it eventually works its way up to the 50% retracement level (SPY 110-ish). It hasn't been a pretty journey, but the fact is that the Nasdaq touched but closed above its rising 50-day moving average, having gained over 20% since its November lows. The Nasdaq picture very much looks like a textbook B wave. Then turn to the Dow chart, which is a horror show, with lower lows each pullback and looking on the brink of collapse. The difference between these two major averages is extreme and unusual. I don't know which one is right, but I don't believe we can have the Nasdaq retrace 50% of its decline, fulfilling its B wave, while the Dow hits a new 52-week low. Something's got to give.
| Current Holdings | ||||||
|---|---|---|---|---|---|---|
| Ticker | Basis | Closing Price |
Perf. | Sell-Stop | Additional Exit Guideline | Chart |
| DOG | 75.51 | 74.64 | -1.2% | 71.39 | N/A | Chart |
| BEAV | 10.73 | 10.78 | +0.5% | 9.81 | N/A | Chart |
| CSR | 5.91 | 6.03 | +2.0% | 5.16 | Consider selling on a close < 5.58 | Chart |
Is now the time to be a hero? I'm not sure it is, but if indeed we have the beginning of a rally (whether a mere two-day affair or one that goes and breaks out of the channel), then the following high-risk signals will also have high potential reward. My suggestion is to risk less per idea.
| Ticker | Entry | Exit A | Exit C | Chart |
|---|---|---|---|---|
| HOS (Hornbeck Offshore) | 17.82 | 16.49 | N/A | Chart |
| PAAS (Pan American Silver) | 17.68 | 16.95 | 16.04 | Chart |
| KOL (Market Vectors Coal ETF) | 15.31 | 13.99 | N/A | Chart |
| KRE (Regional Banks ETF) | 21.38 | 19.64 | N/A | Chart |
| DBA (DB Agriculture ETF) | 25.03 | 24.34 | N/A | Chart |
Please refer to "How To Trade The Ideas" (right-hand side) to read this table.
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