Trade Ideas for 02/25/09

One of the craziest days I've experienced, with frequent, wild swings in every direction. The bias has been to the upside the past couple days, but weakly so. For the chart to look "right," there ought to be some more upside left, but who knows how much more. Every single rally has been beaten back down to the trendline (see chart of SSO [Ultra S&P 500] below).


This minor leg up looks and acts like a reluctant rally that can barely stand on its own legs. Although price has the power to blast off in a short amount of time, that only serves to encourage sellers to enter in great numbers, pushing price back down. Oil, on the other hand, has really taken off as of late, and may have a shot at its 50-day moving average. Let's see how high it can climb.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DXO	2.01	2.19	+9.0%	1.92	Consider moving sell-stop up to breakeven	Chart

The long ideas for tomorrow, CYBS and VMI, may be able to get somewhere in the final few days of this upleg, but recognize that this is a difficult environment to trade for any length of time. Don't risk much if you want to give those two ideas a shot, and start looking for the exits if SPY should get above 80-81. Just in case the rally ends prematurely, I'm bringing back RWM.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
RWM (Short Russell 2000)	80.01	76.68	N/A	Chart
CYBS (CyberSource)	12.48	11.45	N/A	Chart
VMI (Valmont)	45.21	42.89	41.17	Chart

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