Trade Ideas for 06/12/09

The market's positive response to today's 30-year Treasury auction was enough to lift the S&P out of its range to a new uptrend high, but this was for fewer than 10 points and less than 3 hours as price plunged below the 950 level by the end of the day, closing on a strong down tick. The violation of the range means that rangebound trading is probably over. The market may have exhausted itself into the new high, meaning the uptrend is now over. If so, this fits with the observation that bear market rallies end on good news (in this case, a positive treasury auction), and with the negative divergences across numerous oscillators as yet unresolved. But, if the market didn't exhaust into the new high, then the late-day pullback was a bear trap, and the 960-980 level is next. A break below 930 supports the former scenario, and new uptrend highs the latter.

In light of the increased downside risk, I've tightened stops on our current holdings. This precautionary measure has often caused us to get stopped out of positions on the early side. If you'd rather be more generous, you can use yesterday's sell-stops instead (or mix and match).

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Add'l Exit Guideline	Chart
SSO	25.06	27.62	+10.2%	26.68	N/A	Chart
FITB	7.42	7.77	+4.7%	7.05	N/A	Chart
CPSL	2.26	2.81	+24.3%	2.66	N/A	Chart
SPAR	10.48	11.26	+7.4%	10.75	N/A	Chart
TIE	11.03	11.37	+3.1%	10.79	N/A	Chart

50/50 long & short, and a warning that SCC is low-volume.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
ANAD (ANADIGICS)	4.54	4.28	4.22	Chart
HW (Headwaters)	5.09	4.71	4.57	Chart
SRS (Ultrashort Real Estate)	19.43	18.32	N/A	Chart
SCC (Ultrashort Consumer Services)	61.84	59.69	58.27	Chart

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