Trade Ideas for 06/01/09

The day, week, and month ended on a cliffhanger Friday, at the peak of a blow-off top. The S&P had been trading in a 9-point range up until the last 10 minutes, when the range expanded to 16 points. The range expansion was even more dramatic in the S&P futures: a range of 10 ballooned into 25. If the market had been open for one more minute, the S&P surely would have hit its 200-day simple moving average, as the futures market did. Below is the 1-minute futures chart for Friday.

Here I thought Thursday's action was wacky! Blow-off tops are dislocation events that mark turning points of some degree. In this case, this blow-off top still kept the S&P within the very fixed range that it had traded for the entire month of May, so any subsequent turn may be modest in terms of degree, i.e., reversing the trend of the past week versus the trend of the past 3 months.

The rangebound nature of May has been frustrating for my system, which hits its stride during trends and treads water during congestion periods. The general market has gone back and forth all month, and while we participated in the gold breakout, I missed the one in oil. I mentioned earlier this week that an upside break of the May range might not sustain a trend, but the reverse is also true; with the 200-day moving average as resistance above and the 50-day as support below, the market might just bounce off (or at least around) whichever one it hits first. Until this is resolved, look to play a bit smaller, and maybe take partial profits when those averages are hit.

As for our holdings, the dollar collapsed overnight, and when the market opened we had to exit UUP at a greater loss than budgeted. SMN was stopped out early on, and in the closing minutes we bought UYG. Buying near the peak of a blow-off top is not the ideal circumstance in which to make a purchase, but even if you did buy it, give it a chance since the short- and medium-term trend is up.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	22.05	+18.0%	21.29	N/A	Chart
SSO	25.06	26.40	+5.3%	25.29	N/A	Chart
ASIA	20.68	20.94	+1.3%	18.79	N/A	Chart
TWM	50.67	45.00	-11.2%	44.74	Do not set the stop until at least 1 minute of regular trading has passed	Chart
UYG	4.11	4.11	0%	3.89	N/A	Chart

While the charts look promising for the first three ideas, I'd be cautious at Monday's open just to make sure that Friday's climactic ending had worked its way through the system. So either reduce risk in the first 45 minutes, or wait until that time has passed. The fourth idea is a short to play the reversal off the climactic top. Play this one small since it's counter trend.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
RATE (Bankrate)	30.77	28.79	N/A	Chart
JACK (Jack in the Box)	27.01	25.59	N/A	Chart
CPSL (China Precision Steel)	2.26	2.11	1.99	Chart
SRS (Ultrashort Real Estate)	21.13	19.49	N/A	Chart

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

Trade Ideas for 05/29/09

It was a day of strong moves in both directions. Why do market participants save their craziest stuff for Thursdays? Anyway, there wasn't enough strength in either direction (or perhaps too much strength in both directions) for the market to break through the recent trading range.

We bought UUP; otherwise, no changes in positions.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	21.23	+13.7%	20.62	N/A	Chart
SSO	25.06	25.43	+1.5%	23.99	N/A	Chart
ASIA	20.68	20.80	+0.6%	18.79	N/A	Chart
TWM	50.67	46.81	-7.6%	44.74	N/A	Chart
SMN	20.43	18.71	-8.4%	17.99	N/A	Chart
UUP	24.12	24.07	-0.2%	23.92	N/A	Chart

If the trading range gets broken tomorrow, let's jump aboard via the financial sector and hope the move's for real. Also, a couple of China plays.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
UYG (Ultra Financials)	4.11	3.70	N/A	Chart
SKF (Ultrashort Financials)	46.21	42.12	N/A	Chart
CPSL (China Precision Steel)	2.26	1.99	N/A	Chart
GU (Gushan Environmental Energy)	2.84	2.64	2.49	Chart

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

Trade Ideas for 05/28/09

Buyers couldn't push the market that much higher today, and then prices started collapsing. The dollar has peeked its head above a basing pattern and may be ready to bounce after a precipitous drop. Lately the dollar has been inversely correlated with the general market and with gold, and sure enough, both of these fell today.

The most ominous development for the market has been the pace of the rise in long-term bond yields. Rising interest rates is bad enough for the market, but since last Thursday this rise has been parabolic. Against this backdrop the market has held up well, but I get the feeling that any upside above S&P 930 will be Pyrrhic and short-lived. This is not to say it won't happen; the market can still break either way from here.

As for yesterday's ideas, AMTD had an outside reversal day and was sold after it was elected.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	20.93	+12.0%	20.26	Consider selling a portion on a breach of 20.62	Chart
SSO	25.06	24.75	-1.2%	23.99	N/A	Chart
ASIA	20.68	20.78	+0.5%	18.79	N/A	Chart
TWM	50.67	46.93	-7.4%	44.74	N/A	Chart
SMN	20.43	19.50	-4.6%	17.99	N/A	Chart

A hodgepodge of ideas for tomorrow.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
UUP (US Dollar Bullish Fund)	24.12	23.92	N/A	Chart
JACK (Jack in the Box)	27.59	26.32	N/A	Chart
SKF (Ultrashort Financials)	47.21	42.12	N/A	Chart

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

Trade Ideas for 05/26

The market rallied furiously from the open, which was a gap down. The pace of buying trailed off as the day wore on; nevertheless, price closed near the highs of the day on the major averages. As it has proven time and again, this is one well-defended market. The entire month, price has been locked in the 875-930 range on the S&P. The bears were unable to push below that range today; now we'll see if the bulls can carry the tape above 930 over the coming sessions.

At the open we were faced with a dilemma, as most of today's ideas had gapped near their buy prices. The post I wrote last August, Beware of Breakouts at the Open, applies here. Ideally the stocks trade up to their buy prices after the opening 45 minutes. There's no answer that always fits when they don't; if you wait for them to trade back down to the buy price, you aren't buying on strength anymore. If you buy above the new highs, you're paying more. Today, if you took the former route, you might've bought ASIA, TWM and SMN, and bought and sold FAZ for a loss; but if you opted for the latter, you stayed away. We also sold HNI for breakeven.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	21.01	+12.5%	20.26	N/A	Chart
SSO	25.06	25.70	+2.6%	23.99	N/A	Chart
ASIA	20.68	20.56	-0.6%	18.79	N/A	Chart
TWM	50.67	45.39	-10.4%	44.47	N/A	Chart
SMN	20.43	18.80	-8.0%	17.85	N/A	Chart

A couple of nice setups for tomorrow.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
AMTD (Ameritrade)	17.54	16.94	N/A	Chart
GU (Gushan Environmental Energy)	2.84	2.49	N/A	Chart

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

Trade Ideas for 05/26/09

Price meandered all day Friday in mostly positive territory but ended on a strong down tick. As expected, volume was light. The daily charts are now set up to either collapse or to take off. The two scenarios I outlined a few days ago both remain valid. In the comparison below, please note that the price labels on the lows are incorrect; last Friday's low was 878.94 and Thursday's was 879.61.

As before, a break below 875 overwhelmingly tilts the scale in favor of downside. The overall picture resembles a topping pattern rather than a basing one. But the upside bias has been so strong that it can't be counted out. Whatever the case, be prepared for range expansion (meaning a huge jump in price one way or the other).

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	21.15	+13.2%	20.26	N/A	Chart
SSO	25.06	24.41	-2.6%	23.95	N/A	Chart
HNI	16.84	17.11	+1.6%	16.86	N/A	Chart

My ideas for Tuesday are tilted to the short side, with ASIA being the lone long idea. Of the short ideas, TWM is presented twice with different buy prices, the lower price being the more aggressive entry. As before, FAZ is a day-only idea, but should it close at the high of the day, consider holding a portion overnight.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
ASIA (AsiaInfo)	20.68	19.60	18.79	Chart
TWM (Ultrashort Russell 2000)	50.67	48.30	44.47	Chart
TWM (Ultrashort Russell 2000)	52.06	48.30	N/A	Chart
DXD (Ultrashort Dow 30)	51.89	49.94	47.39	Chart
FAZ (Financial Bear 3x)	5.71	5.25	N/A	Chart
SMN (Ultrashort Basic Materials)	20.43	18.99	17.85	Chart

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

Trade Ideas for 05/22/09

The selling continued into today, but just like last Friday, the pace of selling weakened into the close. We got quite a bounce in the final hour as a result. The S&P didn't violate any support levels, although it got close to doing so. The Dow, on the other hand, made a lower low today (however slight), a day after making a higher high. Buyers appear to be defending these levels, and it may take a few sessions to resolve, especially given the upcoming 3-day weekend. But the charts are displaying classic topping patterns: the inability to push higher, either a lower high (as yet unconfirmed on S&P/Naz/Russell 2000) or a lower low (Dow), and consecutive tests of support. Can this powerful rally continue in the face of these challenges? We'll find out soon.

We sold YGE in advance of earnings for a nice 3-day gain. No new purchases today as TWM gapped above the buy price and never touched back down. SKF never made it high enough, as financials (and real estate) actually enjoyed an up day.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	21.06	+12.7%	20.26	N/A	Chart
SSO	25.06	24.49	-2.3%	23.95	N/A	Chart
HNI	16.84	17.25	+2.4%	16.86	N/A	Chart

Tomorrow promises to be a low-volume day since it's the Friday before a 3-day weekend. If you want to trade, I'd look to the short side, but without much expectation since today ended on a strong uptick.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SKF (Ultrashort Financials)	46.87	44.48	41.12	Chart
SRS (Ultrashort Real Estate)	22.86	21.08	19.49	Chart

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

Trade Ideas for 05/21/09

The market ignored yesterday's closing tick and rose to new weekly highs this morning, with the Dow painting a new uptrend high. It ended the day at the lows, lower than yesterday's close, altogether completing an outside reversal day. Fueling the advance was a precipitous drop in the dollar, which resolved the consolidation in gold to the upside. With today's drop the S&P has retraced half of this week's advance. If the market's going up from here, it could do so starting as early as tomorrow. However, momentum is strongly to the downside for the time being.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	20.41	+9.3%	19.81	N/A	Chart
SSO	25.06	25.26	+0.8%	23.95	N/A	Chart
HNI	16.84	17.46	+3.7%	16.86	N/A	Chart
YGE	9.11	10.63	+16.7%	9.43	Sell by market close - they report Friday	Chart

The mixed signals continue, therefore a mix of ideas for tomorrow.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
NVAX (Novavax)	2.16	1.86	N/A	Chart
SNDA (Shanda Interactive)	56.36	52.59	N/A	Chart
TWM (Ultrashort Russell 2000)	48.06	44.47	N/A	Chart
SKF (Ultrashort Financials)	48.21	41.12	40.72	Chart

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

Trade Ideas for 05/20/09

Narrow range today, ending on a definitive down tick. It appears the corrective move has begun, and the two possibilities are as outlined yesterday. Either a shallow correction (wave 2 of a final thrust up) or a more meaningful one (wave C of an a-b-c down) has commenced.

We bought YGE today. YGE reports on Friday, so should be sold by the close Thursday.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.85	+6.3%	19.49	N/A	Chart
SSO	25.06	25.58	+2.1%	23.95	N/A	Chart
HNI	16.84	17.70	+5.1%	16.86	N/A	Chart
YGE	9.11	9.55	+4.8%	9.19	N/A	Chart

Short ideas for tomorrow, of which TWM is the more aggressive in terms of entry price. Also, gold may have reached a temporary peak, so DZZ is in the mix also.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
TWM (Ultrashort Russell 2000)	48.06	45.90	N/A	Chart
SKF (Ultrashort Financials)	45.96	40.71	N/A	Chart
DZZ (Double Short Gold ETN)	22.56	21.93	21.65	Chart

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

Trade Ideas for 05/19/09

The S&P reversed sharply today, closing near its high of 910 (on the dot). Today's action gives the short-term bullish case more credibility, but doesn't resolve the short-term directional ambiguity. A pause or pullback is due—the sharpness of today's move is unsustainable—and how that resolves should say more about what's next. A shallow pullback, perhaps one that unfolds over several days, would support a move to highs above the 930 prior high. However, any violation of the support level in the S&P from yesterday's graphic (875 level) would immediately put the overwhelming advantage to a short-term bearish case. Since the corresponding level in the Russell 2000 has already been breached, this scenario still seems more likely to me.

Under the short-term bearish case, we'd have an uptrend lasting 2 months from 667 to 930. A correction lasting 2-3 weeks (i.e., one-third the length of time) is a rough fit for the corresponding corrective phase. And then another upward phase to complete Primary B. Under the short-term bullish case, Primary B would be over upon completion of the next leg up. So, paradoxically, the short-term bearish scenario is more bullish in the medium term, and vice versa; although both scenarios are bearish in the long term. These two potential scenarios are sketched below.

Big changes in the list of holdings: all short positions were sold for losses, albeit small ones, and GG was sold for a small loss as well. We bought SSO.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.63	+5.1%	19.49	N/A	Chart
SSO	25.06	25.68	+2.5%	23.95	N/A	Chart
HNI	16.84	17.65	+4.8%	16.86	N/A	Chart

YGE has a good setup on the long side. As for shorts, nothing looks great because the move today was so wide, but in case we get a gap down tomorrow, TWM is the one I'd choose.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
YGE (Yingli Green Energy)	9.11	8.30	N/A	Chart
TWM (Ultrashort Russell 2000)	51.51	46.65	N/A	Chart

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

Trade Ideas for 05/18/09

The S&P made a lower low Friday, but the pace of this latest decline has slowed to such an extent that it brings up the possibility that it'll be over soon. Providing the base for a potential bounce is a medium-term support level just below the current price:

However, under the theory that the markets are more correlated than not, the Russell 2000 index shows a different picture: support broken. The Russell 2000 has led the S&P in this uptrend, and chances are it's continuing to lead.

With the long-term trend of the past year being down, medium-term trend of the past few weeks being up, and short-term trend of the past few days being down, we have very mixed messages. The market isn't likely to continue trading in its current narrow range, so we'll know soon what it's going to be.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	20.13	+7.8%	19.49	N/A	Chart
SDS	59.89	61.37	+2.5%	59.39	N/A	Chart
QID	37.92	39.28	+3.6%	37.35	N/A	Chart
SRS	23.01	24.46	+6.3%	22.30	N/A	Chart
HNI	16.84	16.60	-1.4%	15.99	N/A	Chart
GG	32.64	33.44	+2.5%	32.44	N/A	Chart

For Monday, mostly short ideas, but also SSO in case the market does bounce at the support level mentioned above. QID is a re-recommendation; if you already own it and elect it on Monday, move the sell-stop for all positions to 37.91. And as strong as gold has been, silver has been stronger, so I've thrown in SLV in case of further strength from this group.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
QID (Ultrashort QQQQ)	39.92	37.91	N/A	Chart
SMN (Ultrashort Basic Materials)	22.91	20.65	N/A	Chart
TWM (Ultrashort Russell 2000)	52.06	49.09	N/A	Chart
SSO (Ultra S&P 500)	25.06	23.95	N/A	Chart
SLV (Silver ETF)	14.07	13.64	N/A	Chart

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

Trade Ideas for 05/15/09

The bulls fought back today, but didn't get very far (yet). If they're going to mount a comeback, they'll have to avoid further downside. Either a push upward tomorrow or another day of basing would keep bullish hopes alive. It's options expiration day, so anything goes.

We bought HNI and sold DXO for a loss.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.93	+6.7%	19.49	N/A	Chart
SDS	59.89	60.40	+0.9%	57.49	N/A	Chart
QID	37.92	38.93	+2.7%	37.35	N/A	Chart
SRS	23.01	22.93	-0.4%	20.67	N/A	Chart
HNI	16.84	16.57	-1.6%	15.99	N/A	Chart
GG	32.64	33.58	+2.9%	32.44	N/A	Chart

The charts read like the bears have control, but from a similar setup on April 20th, the bulls ran the charts to new highs. So I continue to hedge short ideas with long ones.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
BIDU (Baidu)	240.73	229.49	N/A	Chart
MON (Monsanto)	91.91	89.41	88.58	Chart
TWM (Ultrashort Russell 2000)	52.06	48.37	N/A	Chart
SKF (Ultrashort Financials)	49.73	45.10	N/A	Chart

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

Trade Ideas for 05/14/09

Further drop today, the third down day in a row (for the S&P at least). Not too long ago this was the norm, but the market hasn't had three losing days in a row since early March. For me, the real story was in the junk stocks that had been on huge runs, names like CENX, SRZ, CBL, all of which suffered double-digit losses today. The junk stocks rally beautifully near the end, but they're also harbingers of the collapse, and when they fall, they fall hard. It remains to be seen whether today's action will lead to accelerated downside or to a fight back tomorrow. The market spent the last couple hours in a tight trading range, and dip buyers might pour in and move the tape higher tomorrow.

We bought SDS today. We sold GOLD for a great trade and APL for a loss.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.94	+6.7%	19.49	N/A	Chart
SDS	59.89	61.13	+2.1%	57.49	N/A	Chart
QID	37.92	39.82	+5.0%	37.35	N/A	Chart
SRS	23.01	24.56	+6.7%	20.67	Consider selling on a close < 22.80	Chart
DXO	3.56	3.44	-3.4%	3.37	N/A	Chart
GG	32.64	33.14	+1.5%	32.34	N/A	Chart

Tomorrow's ideas will benefit if the dip buyers do pour in and drive the tape higher. The medium-term trend is up, after all. There are no short ideas because the tape is extended to the downside, and we already hold three short positions.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
HNI (Hon Industries)	16.84	15.99	N/A	Chart
ATHN (athenahealth)	33.89	32.41	N/A	Chart

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

Trade Ideas for 05/13/09

Mixed finish today, Dow green, S&P red. The day started with selling, breaking through Thursday's lows in the process. Then buyers dug in their heels and drove the tape up. The parabola has disappeared, yet the selling never became that intense. While I believe upside is limited, new uptrend highs remain a possibility. A break of today's lows would rule that out.

We bought SRS, DXO and GG today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.88	+6.4%	19.49	N/A	Chart
GOLD	45.56	59.82	+31.3%	57.99	N/A	Chart
QID	37.92	37.73	-0.5%	35.99	N/A	Chart
SRS	23.01	21.58	-6.2%	19.49	N/A	Chart
DXO	3.56	3.52	-1.1%	3.37	N/A	Chart
GG	32.64	33.93	+3.9%	32.34	N/A	Chart
APL	5.32	5.17	-2.8%	4.78	N/A	Chart

Long and short ideas, depending on which direction the market chooses.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SSO (Ultra S&P)	26.17	24.91	N/A	Chart
SDS (Ultrashort S&P)	59.89	57.34	N/A	Chart
GTIV (Gentiva Health Services)	19.62	18.80	N/A	Chart

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

Trade Ideas for 05/12/09

The S&P gapped down at the open and tried all day to fill the gap but failed to do so. The close was at the lows. With Thursday's and today's sizable down days, the path upward is getting a bit rocky. However, both of these down days were tempered pullbacks, which means a new uptrend high remains a possibility. Nevertheless, for upward momentum (and the parabola) to sustain itself, tomorrow needs to close in the green. If it does, we could see another push, perhaps to the 200-day moving average, to close out options expiration week. If it doesn't, the parabola starts to disappear, and that usually means a swift drop. Tomorrow's action is key.

We bought APL and QID today and were stopped out of TMX.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.43	+4.0%	19.09	N/A	Chart
GOLD	45.56	57.93	+27.2%	56.32	N/A	Chart
QID	37.92	36.93	-2.7%	34.91	N/A	Chart
APL	5.32	5.40	+1.5%	4.49	N/A	Chart

Depending on which way the market chooses to go, a variety of ideas for tomorrow. Consider waiting until the first hour of trading has passed to elect positions, or risking less on any ideas that get elected in the first hour.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SRS (Ultrashort Real Estate)	23.01	20.30	19.49	Chart
GG (Goldcorp)	32.64	31.41	N/A	Chart
DXO (Crude Oil Double Long)	3.56	3.37	N/A	Chart
ASIA (AsiaInfo)	18.21	16.99	N/A	Chart

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

Trade Ideas for 05/11/09

Friday's action was similar to Thursday's, but in reverse. We got relentless buying almost all day long, but tempered, lacking intensity. Looking over the charts, I see a divided market. Commodities, basic materials and the financials soared, but other sectors, most notably semiconductors, performed poorly. This type of divergence can't continue for long. So far the parabola is holding up, but the way these formations go we ought to soon see acceleration and/or collapse. The siren song of quickly soaring prices has always proven irresistible to retail investors, but the challenge is to jump ship before getting smashed on the rocks.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.54	+4.6%	19.09	N/A	Chart
GOLD	45.56	58.03	+27.4%	54.58	N/A	Chart
TMX	17.01	17.20	+1.2%	16.85	N/A	Chart

Long commodity, short technology ideas for Monday.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
QID (Ultrashort QQQQ)	37.92	36.07	34.91	Chart
NGD (New Gold)	2.01	1.86	N/A	Chart
APL (Atlas Pipeline)	5.32	4.74	4.49	Chart

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

Additional Trade Idea, 05/08/09

The dollar looks interesting: either on the verge of a breakdown or a powerful impulse wave.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
UUP (US Dollar Bullish Fund)	25.22	24.92	N/A	Chart

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

Trade Ideas for 05/08/09

After opening at new highs, the market sold off for the rest of the day. The selling was relentless but at the same time tempered in that it wasn't a straight-down, waterfall type of decline. So, the bulls are down, but are they out? I think it's too early to say. The parabola hasn't been broken. If we gap down tomorrow and sell all day, then the uptrend is clearly over. But at this point new highs can't be ruled out, and this uptrend has proven that even in what appear to be dire circumstances, bullishness can take root.

We sold NUE for a loss today, and DIG for better than breakeven. SDS gapped down a great deal, and its low was slightly over 2% greater than the sell stop in yesterday's table. So a close call as to whether or not to elect once it exceeded the buy price. (A low greater than 2% below the sell stop invalidates the signal.) I'm going to include it in our current holdings anyway, in case anyone did elect it.

PS: I wasn't paying attention and didn't note that GOLD reported earnings today. I don't like to take on earnings risk so this was a mistake, but it worked out in our favor.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.28	+3.2%	18.79	Consider selling on a negative close	Chart
GOLD	45.56	53.55	+17.5%	51.77	N/A	Chart
SDS	59.22	58.75	-0.8%	55.92	N/A	Chart
TMX	17.01	17.09	+0.5%	16.85	N/A	Chart

A couple of short ideas if this turns out to be the start of a downtrend, but also a long idea in case it doesn't.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SKF (Ultrashort Financials)	46.51	39.52	N/A	Chart
QID (Ultrashort QQQQ)	38.18	35.06	N/A	Chart
ATHN (athenahealth)	34.01	32.22	N/A	Chart

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

Trade Ideas for 05/07/09

With today's action, the S&P has gone so parabolic that the parabola has become recognizable on the daily chart:

Parabolas end in a blow-off top, and subsequently retrace a great swath of price in a short amount of time. They can last longer than you'd think, but they can't last long. They can go higher than you'd think, but the higher they go, the harder they fall.

The old wave count was already looking dodgy as mentioned yesterday, and today's action meant a substantial revision was necessary. The revised count shows that the uptrend has been made up of three distinct advances: a strong, impulsive start; a weak, ascending wedge middle; and finally a parabola finish. Unlike motive advances, the middle wave has been the weakest and shortest of the three: a true sign of a bear market corrective rally, not a new cyclical bull market!! When the parabola concludes, so too will (at least) three sets of C waves; and Intermediate A. (Previously, I had marked Intermediate A finished on April 17th, way too early.)

As for time cycles, today, May 6th, marked 120 days from the January 6th high, and midway between then and now was the March 6th low. There's a symmetry to the notion that today's high was a top of some degree, although without a pullback and with a close at the highs there's no price evidence of that. Hindsight has shown that 45 days from the March low was not a high as I had figured, but a low (April 21st).

We are net long, moreso after buying all of yesterday's long ideas, and this means being in protection mode with regard to the parabola. Tight stops is key. For DGP and DIG, the "ideal" stop is below breakeven, but I've moved it above to err on the side of safety. The ideal stop is given in the comments.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	19.34	+3.5%	18.79	Ideal stop 17.96	Chart
GOLD	45.56	52.68	+15.6%	49.25	Consider selling on a close < 51.69	Chart
NUE	45.01	44.31	-1.5%	42.99	N/A	Chart
DIG	27.67	28.70	+3.7%	27.79	Ideal stop 27.49	Chart
TMX	17.01	17.16	+0.9%	16.85	N/A	Chart

While parabolas can last longer than you'd think, I'm uncomfortable taking on new long positions except on an intraday timeframe. Short positions, on the other hand, become low-risk propositions. Short on a breach of the prior day low, stop at the uptrend high. Additionally, if a short is elected and does not close near the high of the day, consider taking profit on at least half the position at the close. This is because parabolas can last longer than you'd think!

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SDS (Ultrashort S&P)	59.22	57.08	N/A	Chart
SKF (Ultrashort Financials)	47.51	42.29	N/A	Chart

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

Additional Trade Idea, 05/06/09

After further review, I'm inclined to give the bearish scenario a bit more credit. Monday's high was stopped at the upper trendline of a multi-week rising wedge, and S&P futures have been painting an interesting pattern since then. So, oddswise say 2:3 rather than 1/4.

Additional Trade Idea

Ticker	Entry	Exit A	Exit C	Chart
SRS (Ultrashort Real Estate)	24.51	20.83	N/A	Chart

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

Trade Ideas for 05/06/09

No breakdown today, just a solid consolidation of yesterday's big advance. The S&P is now closer to its 200-day moving average overhead than its 50-day below. At this point it could move toward either average, but with today's consolidation above prior resistance, further upside looks like a better bet. Yesterday's Elliott Wave count remains viable, but it's looking increasingly unlikely. Time will tell what kind of agenda this market has.

Addendum: Tomorrow is 120 days from the January 6th high, so I'm going to wait before counting out support for a turn based on the 60-day cycle. Looking back at early January, I recall that sentiment was leaning bullish after a strong bear campaign had seemingly come to an end. It certainly didn't look like that date would mark a significant top, yet it did. History could repeat itself now, but don't count on it.

Monday, January 5th, consolidating a huge push above prior resistance:

Tuesday, January 6th, more consolidation:

Subsequent action:

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	18.82	+0.7%	17.96	N/A	Chart
GOLD	45.56	50.00	+9.7%	47.90	N/A	Chart

Some long ideas for tomorrow, but also a short one in case the market does break down.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
NUE (Nucor)	45.01	42.99	N/A	Chart
DIG (Ultra Oil & Gas)	27.67	26.14	N/A	Chart
TMX (Telefonos de Mexico)	17.01	16.57	N/A	Chart
QID (Ultrashort QQQQ)	37.53	35.38	N/A	Chart

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

Trade Ideas for 05/05/09

The S&P gapped at the open, climbed all morning, took a mid-day break, and climbed again in the afternoon to huge new highs. While I did mention the possibility of new highs in my last post, a climb of this magnitude tests the credibility of my count:

While the expanded flat correction is a common formation featuring a B wave that extends beyond the start of the A wave, the level of today's high is about as far as it can go before becoming invalid. Couple that with the fact that tomorrow (May 5th) is the putative turn date, and we have a situation where the bearish case is pretty much pushed to its limit. That is to say, either today was the exhaustion day, and tomorrow we start descending rapidly, or else some other count is in play.

No new purchases today, but the aggressive short positions got toasted.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	18.90	+1.2%	17.96	N/A	Chart
GOLD	45.56	51.25	+12.5%	47.90	N/A	Chart

The shorts have one last chance, and that's tomorrow. (Also, long setups will need a day or two of consolidation to look tempting). These ideas have fairly high trigger prices and will require the market to tank in order to be elected.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SRS (Ultrashort Real Estate)	25.63	20.83	N/A	Chart
QID (Ultrashort QQQQ)	37.77	35.38	N/A	Chart

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

Trade Ideas for 05/04/09

The S&P chopped all day Friday, cycling rather frequently between red and green, before closing at its highest level since the uptrend began. However, action was so choppy that the prospect of having even a positive close was questionable going into the last twenty minutes. Tuesday marks 60 days from the March low, so there's an appeal to the idea that the market might have gone sideways in order to make a turn on, or at least closer to, that date.

While the index made a lower low in the morning, it was not much lower, and both counts I alluded to last time remain valid. These counts follow.

Friday's choppiness supports the character of a wave 2 (as depicted above) during which the new trend (in this case down) has not been well-established, and echoes of the prior trend exert an influence, leading to prolonged indecision among market participants.

On the other hand, the red trendline was well-defended in the last half hour of trading, leaving open the possibility of a run to another higher high.

The interesting sectors Friday were real estate and financials. These were the leaders on the way down, and they were at the forefront on the way up. On Thursday while the major indices made new uptrend highs, these sectors fell short; in fact the financial sector has not participated in the mini-rally that started April 21st, being unable to get higher than its April 17th high. Both sectors closed in the red Friday. This is a reason to keep a bearish outlook, as leaders lead.

If you opted for the aggressive entries on Thursday's ideas, you would've bought all of them when the market made an early lower low. The more conservative entry points were not hit.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DGP	18.68	18.25	-2.3%	17.96	N/A	Chart
GOLD	45.56	49.56	+8.8%	47.90	N/A	Chart
TWM	49.84	49.25	-1.2%	46.58	N/A	Chart
SDS	64.71	63.14	-2.4%	61.49	N/A	Chart
DXD	53.94	52.80	-2.1%	51.59	N/A	Chart

Continuing the thought above, and for those who chose to hang back on Friday's ideas, Monday's theme is to pick on the weak sectors.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SRS (Ultrashort Real Estate)	26.37	23.69	N/A	Chart
SKF (Ultrashort Financials)	61.47	55.99	N/A	Chart

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