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.