Trade Ideas for 03/16/09

Friday the 13th didn't prove that scary. After some initial selling, the market resumed its bullish ways, sort of. The sharp morning descent was followed by an equally sharp rise, but then the momentum started to trail off. The slowing momentum is worrisome, but it's still early. Higher highs are still possible (my guess is at least one higher high), but caution is warranted.

No changes in our current holdings, but I'm tightening sell-stops in case of reversal.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
SWKS	6.61	7.72	+16.8%	7.49	N/A	Chart
AXP	12.21	13.09	+7.2%	11.92	N/A	Chart
ITU	9.66	10.35	+7.1%	9.84	Consider selling on a close < 10.12. Consider selling half on an intraday breach of that level.	Chart
DXO	2.51	2.42	-3.6%	2.15	N/A	Chart
UYG	1.65	2.36	+43.0%	1.89	Consider selling on a close < 2.18. Consider selling half on an intraday breach of that level.	Chart
JBHT	19.71	21.74	+10.3%	20.82	N/A	Chart
BHI	29.67	29.33	-1.1%	28.07	Consider selling on a close < 28.71	Chart

We're well-positioned in case the market continues upward. In case there's a reversal, we need to look at securities not correlated to the market, or with negative correlation. Monday's ideas deserve a special explanation. Gold looks like it's in trouble. This is more apparent on the chart of the gold miners, so shorting GDX is another way to go, but as you may have noticed, my official ideas are long-only in form (to keep things simple), thus DZZ. Also, TYP is a day-only idea. If the stock is elected, then it should be sold by the end of the day. The reason is because the Direxion 3x ETFs only track changes in the underlying for the duration of the day session; holding them overnight dramatically increases risk as these securities undergo a repricing process. Finally, AVA was selected because it features an intriguing volume surge, even though the setup itself is on the risky side.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
DZZ (Ultrashort Gold)	22.61	21.78	N/A	Chart
TYP (Direxion 3x Technology Bear)	57.03	53.93	N/A	Chart
AVA (Avista)	13.47	13.17	12.89	Chart

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