Update 10/01/09

An incredibly volatile session Wednesday, featuring not one but two sheer drops in price. The averages still managed to close mixed, with the Nasdaq positive on the day.

We bought AMCC and a second helping of FXP today. CNQ opened above our buy price, hitting the high of the day in the first minute, then crashed below its sell-stop. We're not supposed to trade the first minute of price action for reasons like this. As for current holdings, in my opinion we're good. While the market can go either way, I see the downside reward as much greater than the upside, and that is amply reflected in the current mix.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	9.80	+9.4%	9.39	N/A	Chart
SRS	9.56	9.69	+1.4%	8.71	N/A	Chart
DUG	14.31	14.51	+1.4%	13.71	N/A	Chart
SKF	25.11	25.05	-0.2%	23.58	N/A	Chart
QID	23.17	23.03	-0.6%	22.06	N/A	Chart
TWM	28.06	28.69	+2.2%	26.65	N/A	Chart
SSO	34.16	34.32	+0.5%	33.33	N/A	Chart
AMCC	9.91	9.99	+0.8%	9.49	N/A	Chart

Trade Ideas for 09/30/09

The market couldn't decide on a direction today. As long as the major averages stay above their Friday lows, the possibility of new recovery highs remains.

No changes to our holdings. UNG opened over 2% below the sell-stop, so it was a scratch.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	9.58	+6.9%	8.96 (or whichever price is breakeven)	N/A	Chart
SRS	9.56	9.53	-0.3%	8.71	N/A	Chart
DUG	14.31	14.36	+0.3%	13.71	N/A	Chart
SKF	25.11	24.72	-1.6%	23.58	N/A	Chart
QID	23.17	23.03	-0.6%	22.06	N/A	Chart
TWM	28.06	27.95	-0.4%	26.65	N/A	Chart
SSO	34.16	34.53	+1.1%	33.33	N/A	Chart

Three longs, three shorts for tomorrow. Consolidation days lend further potential strength to whichever direction the market settles upon. If FXP is elected, set sell-stop for all positions to 9.39.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
AMCC (Applied Micro)	9.91	9.62	9.49	Chart
GTIV (Gentiva)	25.86	25.06	24.79	Chart
CNQ (Canadian Natural Resources)	68.08	65.94	N/A	Chart
SCO (Ultrashort Crude Oil)	19.46	18.39	N/A	Chart
GLL (Ultrashort Gold)	13.21	12.92	N/A	Chart
FXP (Ultrashort Xinhua 25)	9.86	9.39	N/A	Chart

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

Trade Ideas for 09/29/09

The bounce that looked likely Friday materialized after all, and in a big way. The market appears well on its way to making new highs. This is by no means a certainty; with the lowest volume in weeks, today's action is suspect. Nevertheless, it's hard to ignore how fast and far this latest upsurge has come.

We bought SSO today. If you sold partials in the short positions, so far so good; consider re-entering those positions on a break of Friday's high, risking to today's low (e.g., buy SRS 10.41, risk to 9.19). For existing short positions, let the market stop you out of them.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	9.56	+6.7%	8.96 (or whichever price is breakeven)	N/A	Chart
SRS	9.56	9.24	-3.3%	8.71	N/A	Chart
DUG	14.31	14.31	0	13.71	N/A	Chart
SKF	25.11	24.48	-2.5%	23.58	N/A	Chart
QID	23.17	22.85	-1.4%	22.06	N/A	Chart
TWM	28.06	27.75	-1.1%	26.65	N/A	Chart
SSO	34.16	34.73	+1.7%	33.33	N/A	Chart

If the market breaks below Friday's low, look for more downside. Otherwise, chances are we're headed for another recovery high. As before, FXP is a re-up; if elected, set sell-stop on all positions to 9.44.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
UNG (US Natural Gas Fund)	12.04	11.67	N/A	Chart
JASO (JA Solar)	4.22	3.92	N/A	Chart
FXP (Ultrashort Xinhua 25)	9.86	9.44	N/A	Chart
GLL (Ultrashort Gold)	13.21	12.92	N/A	Chart

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

Trade Ideas for 09/28/09

On the third consecutive day of losses in the major averages, the pace of selling slowed. A more significant bounce took place in the afternoon so that prices closed off the very lows of the day. The day's candle was a spinning top, which implies indecision. The market could go either way from here. But with such a large drop since the Fed announcement and downside momentum slowed Friday, it “feels” like the market should bounce some more. Especially since the line in the sand—1040— held. If the S&P stabilizes next week above Friday's lows, it might even challenge the prior highs in the coming sessions.

However, if the S&P breaks Friday's lows, the market would be sending an incredibly bearish signal. It would increase the odds that Wednesday's top would be it: the end of the bear market rally, and the beginning of the second—and more ferocious—half of the stock market crash.

For Monday, if prices do stabilize above Friday's lows, consider taking partial profits in existing positions, but only if you have several shorts. Again, not too much, as there's a good chance that a major trend change took place with Wednesday's post-FOMC announcement crash.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	9.64	+7.6%	8.96	N/A	Chart
SRS	9.56	10.02	+4.8%	8.71	N/A	Chart
DUG	14.31	14.76	+3.1%	13.71	N/A	Chart
SKF	25.11	25.74	+4.3%	23.58	N/A	Chart
QID	23.17	23.21	+2.0%	22.06	N/A	Chart
TWM	28.06	28.82	+3.9%	26.65	N/A	Chart

A bit of a mix for Monday. Once again picking on China with FXP, this time it is a re-up. If you elect FXP Monday, set the sell-stop for all shares to 9.44. VXX is the other short-oriented pick. Also a couple of longs in case the market isn't done on the upside.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
FXP (Ultrashort Xinhua 25)	9.86	9.44	N/A	Chart
VXX (VIX Volatility Index ETN)	52.01	50.41	N/A	Chart
UNG (US Natural Gas Fund)	12.04	11.69	N/A	Chart
SSO (Ultra S&P 500)	34.16	33.33	N/A	Chart

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

Update 9/25/09

Major follow-through today as the indices continued sliding, with the S&P hitting an intraday low of 1046 before reclaiming the 1050 level by the close. After so much selling, the bulls need to see a bounce tomorrow to keep alive the possibility of higher highs.

All of our remaining longs were sold, with only WFR profitable, and we bought 4 new short positions. If you elected a lot of short positions, consider taking a bit of profit near tomorrow's open. But not too much. Although a bounce is "expected," if the market really did make a top on Wednesday, it could skip the bounce and just keep heading down. Recall that the reverse situation occurred at the March lows. Back then, after three weeks of relentless selling, the market abruptly bounced and headed upward, not looking back once during a huge run from 680 to 800:

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	9.65	+7.7%	8.77	N/A	Chart
SRS	9.56	10.05	+5.1%	8.71	N/A	Chart
DUG	14.31	14.74	+3.0%	13.71	N/A	Chart
SKF	25.11	25.74	+2.5%	23.58	N/A	Chart
QID	23.17	23.21	+0.2%	22.06	N/A	Chart
TWM	28.06	28.82	+2.7%	26.65	N/A	Chart

Nothing for tomorrow; waiting for setups to develop.

Trade Ideas for 09/24/09

The markets hit a new intraday high today after the Fed announcement, followed by an extremely swift drop to close at the lows of the day. The daily chart doesn't look quite so dramatic:

but on the intraday chart, it's a swan dive:

This bear market rally has to end sometime, and it may have been today. But there are a couple of competing Elliott Wave counts, and the textbook one would have us drop no lower than 1040, followed by a rally to new highs. Let's first see if there's follow-through on today's decline. We sold DXD for a loss and bought JAZZ and FXP (but only if we didn't own it already.)

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	9.17	+2.3%	8.43	N/A	Chart
JAZZ	10.01	9.72	-2.9%	9.09	N/A	Chart
DUG	14.31	14.32	+0.1%	13.73	N/A	Chart
WFR	17.58	18.34	+4.3%	18.14	N/A	Chart
EL	37.18	36.98	-0.5%	36.23	N/A	Chart

A full slate of short ideas tomorrow, plus one long. Thursdays can be very tricky; one pattern that happens often is a continuation of Wednesday's trend for the first 30 minutes, and then a reversal. Therefore, I would be cautious about taking on more than 2 shorts in the first 30 minutes of trade.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SOLF (Solar Fun)	7.01	6.49	N/A	Chart
SRS (Ultrashort Real Estate)	9.56	8.71	N/A	Chart
SKF (Ultrashort Financials)	25.11	23.58	N/A	Chart
QID (Ultrashort QQQQ)	23.17	22.06	N/A	Chart
TWM (Ultrashort Russell 2000)	28.06	26.65	N/A	Chart

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

Trade Ideas for 09/23/09

The high from last Thursday continues to hold at least in the Dow and S&P. However, we seem to be going through another consolidation period after a big run up. This has happened several times in the recent past, and the majority of the time the consolidation concluded with an intraday spike higher that couldn't sustain itself.

A couple of exceptions: late July, the brief consolidation period led to a solid advance, and early August the spike higher led to a few more days of consolidation before the drop. Based on recent price performance, the expectation is higher prices based on the recent examples of this pattern. However, there's a chance it'll be a one-day intraday high followed by a selloff.

We bought EL today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	8.84	-1.3%	8.43	N/A	Chart
DXD	34.92	34.38	-1.5%	34.14	N/A	Chart
DUG	14.31	13.80	-3.6%	13.73	N/A	Chart
WFR	17.58	19.03	+8.2%	18.14	N/A	Chart
EL	37.18	37.32	+0.4%	36.23	N/A	Chart

Some speculative longs and a couple of shorts for tomorrow. FXP is not intended as a re-up; only elect it if you don't own any. Tomorrow the Fed makes its announcement at 2:15 PM ET. (Not Tuesday—my bad on that one.)

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
VG (Vonage)	1.58	1.43	1.35	Chart
JAZZ (Jazz Pharmaceuticals)	10.01	9.29	9.09	Chart
FXP (Ultrashort Xinhua 25)	9.18	8.77	8.43	Chart
SRS (Ultrashort Real Estate)	9.57	8.75	8.45	Chart

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

Trade Ideas for 09/22/09

Markets were mixed Monday with Nasdaq up and the others down. Price fell hard at the open but recovered. The overlapping price action since last Thursday suggests that prices have been consolidating the move up, rather than gearing up for a crash. This is further reinforced by the fact that the Nasdaq hit a new recovery high intraday today. But let's see what the market gives us. Tomorrow's another Fed day, so I'm expecting a volatile session come 2:15 PM. [Edit: Fed's meeting is 2-day, so announcement comes Wednesday 2:15]

We entered short positions in FXP, DXD and DUG, and sold V and SLB for profits.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
FXP	8.96	8.98	+0.2%	8.43	N/A	Chart
DXD	34.92	34.69	-0.7%	34.14	N/A	Chart
DUG	14.31	14.20	-0.8%	13.73	N/A	Chart
WFR	17.58	18.63	+6.0%	18.14	N/A	Chart

I think we have enough short positions to cover the downside case. Just longs for tomorrow.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
EL (Estee Lauder)	37.18	36.23	N/A	Chart
GA (Giant Interactive)	7.86	7.68	N/A	Chart

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

Trade Ideas for 09/21/09

Friday was the first day in over two weeks that price failed to make a higher intraday high in the major averages. The price pattern is now the opposite of what we saw in March. Compare the price pattern of the S&P during the days leading up to the March rally with the past few days in the inverse S&P fund:

Notice the similarity? In the most bearish case, this suggests that prices will drop dramatically in the coming sessions as a counterpoint to the rally off the March lows. At the same time, the averages may just be consolidating the gains of the past two weeks. Friday was an options expiration day and prices tend to stay in range on such days. We'll find out soon enough.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
V	70.44	73.79	+4.8%	73.29	N/A	Chart
SLB	58.43	61.85	+5.9%	60.99	N/A	Chart
WFR	17.58	18.94	+7.7%	18.14	N/A	Chart

For Monday, we're going to go with all the unelected short ideas from Friday. In addition, if price has simply been consolidating, the market could head up sharply Monday. In that case, TNA would trigger. Since it's a 3x leveraged ETF, sell it by the close (or latest Tuesday at the open)

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
FXP (Ultrashort Xinhua 25)	8.96	8.59	8.43	Chart
DXD (Ultrashort Dow 30)	34.92	34.14		Chart
SRS (Ultrashort Real Estate)	9.72	8.89	N/A	Chart
DUG (Ultrashort Oil & Gas)	14.31	13.73	N/A	Chart
TNA (Small Cap Bull 3x)	49.51	46.97	N/A	Chart

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

Trade Ideas for 09/18/09

We had a long white candle yesterday followed by today's doji, which featured an upper shadow that extended above the prior candle. I interpret this as a sign of reversal, as the market rejects higher prices and closes in the red. One strategy to take advantage of this setup is to enter a short position upon breaking the prior day's low. However, that didn't work so well last week, as we got whipsawed with QID and SRS.



It has been a successful entry strategy in the past, however, leading to downside participation in December and February, and not triggering in January.



So I'll be more conservative this time and look to enter upon breaking Wednesday's low. Of course, you can require less margin of safety and enter upon breaking today's low, or do a 50-50 combination with tomorrow's entries.

We sold HTZ for a good-sized profit and CAEI for a loss today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
V	70.44	73.82	+4.8%	73.29	N/A	Chart
SLB	58.43	61.79	+5.8%	60.99	N/A	Chart
WFR	17.58	18.32	+4.2%	17.58	N/A	Chart

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
FXP (Ultrashort Xinhua 25)	8.96	8.43	N/A	Chart
DXD (Ultrashort Dow 30)	35.46	34.14	N/A	Chart
SRS (Ultrashort Real Estate)	9.72	8.96	8.45	Chart
DUG (Ultrashort Oil & Gas)	14.31	13.59	N/A	Chart

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

Trade Ideas for 09/17/09

The market essentially went parabolic today. Several indices broke above their ascending wedges, and we got a close at the highs. The danger level is at an extreme. When the parabola is over, we could get a very sharp reversal or a less sharp one. This reversal could happen any day, and I give it less than a week. Should the uptrend continue through that period, we will have witnessed an upward wedge resolving into a parabola, and it would be time to take on new long positions. For now, we will play the positions we have, selling on the first down day. Also, on a gap up open, consider booking partial profits in current holdings (20-25%). Today we sold ARIA for a profit and missed AMZN as it gapped up well above our buy price.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
HTZ	9.71	11.30	+16.4%	10.99	N/A	Chart
V	70.44	74.09	+5.2%	72.65	N/A	Chart
SLB	58.43	62.41	+6.8%	60.76	N/A	Chart
WFR	17.58	18.74	+6.6%	17.58	N/A	Chart
CAEI	1.96	1.89	-3.6%	1.79	N/A	Chart

In case the parabola ends tomorrow, and it's a sharp reversal, it might trigger the following idea.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
DXD (Ultrashort Dow 30)	35.46	34.49	N/A	Chart

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

Trade Ideas for 09/16/09

More highs today as the market keeps chugging along. The Russell 2000 has joined the transports in closing above its ascending wedge; NASDAQ, Dow, and S&P remain contained.

We bought WFR and CAEI today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
HTZ	9.71	11.06	+13.9%	10.38	N/A	Chart
ARIA	2.26	2.54	+12.4%	2.49	N/A	Chart
V	70.44	73.20	+3.9%	71.49	N/A	Chart
SLB	58.43	59.83	+2.4%	58.49	N/A	Chart
WFR	17.58	17.33	-1.4%	16.94	N/A	Chart
CAEI	1.96	1.98	+1.0%	1.79	N/A	Chart

Rolling over yesterday's unelected ideas, and adding an extra long and short idea. The market can keep going up, but once it stops, given the steepness of this rally it could be a swift and sudden drop.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
VG (Vonage)	1.66	1.41	N/A	Chart
AMZN (Amazon.com)	84.91	82.78	N/A	Chart
FXP (Ultrashort Xinhua 25)	9.51	9.17	8.99	Chart
DXD (Ultrashort Dow 30)	36.59	35.19	N/A	Chart

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

Trade Ideas for 09/15/09

Tough outside day today. The market opened on a gap down, opening below Friday's low. But that was the low of the day, as the S&P proceeded to rise to new recovery highs, closing at the highest close so far during this rally. It's not so much that the market makes it that much higher, it's that all pullbacks are bought.

The outside day wreaked havoc on the system. On the gap down open we were stopped out of SOLF and SCHN and into QID and SRS. Then, as the market rose, we were stopped out of SRS and QID. On the bright side, the remaining holdings performed well, now with better-than-breakeven sell-stops, but the whipsaws hurt.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
HTZ	9.71	10.85	+11.7%	10.38	N/A	Chart
ARIA	2.26	2.75	+21.7%	2.49	N/A	Chart
V	70.44	72.87	+3.4%	71.49	N/A	Chart
SLB	58.43	59.81	+2.4%	58.49	N/A	Chart

We're going to tempt fate and see if the market will take us higher. Because the market can turn at any time, one short idea as well.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
WFR (MEMC Electronics)	17.58	16.94	N/A	Chart
CAEI (China Architectural Engineering)	1.96	1.79	N/A	Chart
AMZN (Amazon.com)	84.91	83.45	N/A	Chart
FXP (Ultrashort Xinhua 25)	9.51	8.99	N/A	Chart

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

Trade Ideas for 09/14/09

The market pulled back from new highs Friday in the first sign of weakness since this latest upswing began last week. For the S&P, the day closed on a doji candlestick. So far, the ascending wedges I presented yesterday continue to contain prices, with one notable exception: the transports broke through the wedge and closed at the highs of the day.

It remains to be seen whether the other indices will follow suit and break the ascending wedge to the upside. We're pretty much right at the upper trendline, so next week we'll know. Meanwhile we bought SOLF and SCHN Friday.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
HTZ	9.71	10.72	+10.4%	9.71	Consider setting sell-stop on partial positions at 10.47	Chart
ARIA	2.26	2.62	+15.9%	2.49	N/A	Chart
V	70.44	72.29	+2.6%	70.44	N/A	Chart
SLB	58.43	60.39	+3.4%	56.84	Consider setting sell-stop on partial positions at 59.64	Chart
SOLF	6.26	5.94	-5.1%	5.78	N/A	Chart
SCHN	58.13	57.18	-1.6%	55.99	N/A	Chart

For Monday, I'm going to focus on the short side. The S&P/Dow/Nasdaq/Russell all closed weakly, and they're up against formidable resistance. SRS and QID are especially aggressive entries for Monday. And in case the market follows the transports up, I've thrown in a long idea in CRI.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
FXP (Ultrashort Xinhua 25)	9.51	8.99	N/A	Chart
SKF (Ultrashort Financials)	27.81	26.27	N/A	Chart
SRS (Ultrashort Real Estate)	11.07	10.49	N/A	Chart
QID (Ultrashort QQQQ)	24.31	23.83	N/A	Chart
CRI (Carter Holdings)	26.42	25.71	N/A	Chart

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

Trade Ideas for 09/11/09

Major indices made new recovery highs today, and closed at those highs. All indices are overbought, although many times during this uptrend overbought conditions have been resolved by sideways consolidation rather than pullback. So the market can certainly continue powering higher.

At the same time, prices across these indices have been constrained by an ascending wedge shape since the March low. These indices are now very close to bumping the tops of their wedge trendlines. Below are 2-year daily charts of the DJIA, DJTA, S&P 500, Russell 2000, and NASDAQ Composite indices with the wedges drawn in. In addition, I present the chart of the XLF, which may have broken below the bottom of its wedge. While it's true that wedges often have to be redrawn as new price data comes in, with 4 touches, at least the upper trendlines of these wedges look solid. Since this trendline defines an upper price boundary, the market may not have much more upside left. So while we'll still continue playing the long side, I'm going to be a tad more conservative with sell-stops and offer fewer long ideas.



We bought SLB today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
HTZ	9.71	10.99	+13.2%	9.71	Consider setting sell-stop on partial positions at 10.47	Chart
ARIA	2.26	2.63	+16.4%	2.49	N/A	Chart
V	70.44	72.31	+2.7%	70.44	N/A	Chart
SLB	58.43	58.50	+0.1%	56.84	N/A	Chart

A couple of longs, plus let's probe the short side with the financials.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SKF (Ultrashort Financials)	28.11	26.39	N/A	Chart
SOLF (Solar Fun)	6.26	5.78	N/A	Chart
SCHN (Schnitzer)	58.13	55.99	N/A	Chart

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

Trade Ideas for 09/10/09

The market continues to chug along, nearing new recovery highs. The S&P rarely strings together 5 winning days in a row so I'm a bit wary for tomorrow, but the market is signaling higher prices. We sold SDS and TWM for losses and bought HTZ today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
HTZ	9.71	10.44	+7.5%	9.49	N/A	Chart
ARIA	2.26	2.56	+13.3%	2.37	N/A	Chart
V	70.44	70.48	+0.0%	69.42	N/A	Chart

Stockcharts has been down all day, but I still found a couple of charts that look good.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
MXIM (Maxim)	19.27	18.69	N/A	Chart
SLB (Schlumberger)	58.43	56.84	N/A	Chart

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

Trade Ideas for 09/09/09

At the open, the market hit its best levels of the day on a gap up. It fiercely protected gap support and spent the remainder of the day in a tight range. This action is very hard to read; today's consolidation action could have constituted the "pullback" I was waiting for. So let's let the market show us where it's going next.

Both POT and FRG gapped well above their buy prices at the open and were scratched.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
SDS	44.12	43.13	-2.2%	42.99	N/A	Chart
TWM	32.36	31.74	-1.9%	31.32	N/A	Chart
ARIA	2.26	2.56	+13.3%	2.19	Consider setting sell-stop on partial shares at 2.37	Chart
V	70.44	70.95	+0.7%	69.42	N/A	Chart

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SKF (Ultrashort Financials)	28.91	27.25	26.43	Chart
GRO (Agria)	2.03	1.83		Chart
HTZ (Hertz)	9.71	9.33	N/A	Chart

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

Trade Ideas for 09/08/09

Monday's a holiday, so next week begins on Tuesday. Friday the market continued bouncing, reaching very overbought levels on declining volume. The close at the highs of S&P 1016 represents a 50% retracement of the 4-day drop from 1039 to 992. A pullback should follow from here. Whether the 4-day drop was the opening salvo of a much larger move down, or merely a correction within a series of higher highs and higher lows, hinges on whether the next pullback breaks below the Wednesday low of 992.

If the S&P were to break those lows, I wouldn't look too closely at the price targets I mentioned in my last post. The count as labeled yesterday no longer looks valid because of the size of the move up. Friday we sold VXX for a profit.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
SDS	44.12	43.91	-0.5%	42.99	N/A	Chart
TWM	32.36	32.46	+0.3%	31.32	N/A	Chart
ARIA	2.26	2.35	+4.0%	2.13	N/A	Chart
V	70.44	70.36	-0.1%	69.42	N/A	Chart

A couple of short ideas in case the market drops on Tuesday. A couple long ideas as well, including a gold play with FRG.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SRS (Ultrashort Real Estate)	13.28	12.28	N/A	Chart
SKF (Ultrashort Financials)	29.92	28.04	N/A	Chart
FRG (Fronteer Development Group)	4.51	4.29	N/A	Chart
POT (Potash)	90.86	88.43	N/A	Chart

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

Trade Ideas for 09/04/09

Some late-day strength in the market, but so far the bounce has been more sideways than up. Assuming last Friday's high was the peak of the bear market rally, so far the move down appears to have unfolded in 4 waves:

When this bounce ends, there are a few downside targets just below Tuesday's low: the August lows around 980, the 50-day moving average around 970, and the June highs at 956. Wave 5 could be shortened and barely make a lower low, or it could extend, but generally the 50-day moving average requires at least a couple of attempts before it gives.

Note that there are always alternate counts: the move down could be much more powerful than illustrated, with the labels being 1-2-1-2 (i.e., extended 3rd wave) instead of 1-2-3-4. However, since 4th waves tend to be flat, my guess is that the move down has been as labeled. With that in mind, I would consider selling partial short positions as the above-mentioned targets are met, leaving the majority of positions intact in case the move down picks up momentum.

Today we sold FXP for a profit.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
SDS	44.12	45.22	+2.5%	42.99	N/A	Chart
TWM	32.36	33.39	+3.2%	31.32	N/A	Chart
ARIA	2.26	2.26	0	2.13	N/A	Chart
VXX	57.34	59.71	+4.1%	58.42	N/A	Chart
V	70.44	70.91	+0.7%	69.27	N/A	Chart

Today's bounce provides some entries into more short positions. Again, I would consider lightly selling partial positions as the S&P hits the aforementioned downside targets.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
DUG (Ultrashort Oil & Gas)	17.12	16.69	15.99	Chart
SKF (Ultrashort Financials)	29.92	28.36	26.43	Chart

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

Trade Ideas for 09/03/09

The market made a slightly lower low this morning, and spent the rest of the day rangebound. With four days down in a row, the market may have a rebound in it. Given the strength of the downtrend so far, it may not be much of a bounce. Meanwhile, gold soared today, indicating a great deal of fear. We tried to play gold yesterday and got burned, and today it took off; proving once again that it's not an easy trade to enter or exit profitably. The relationship between the dollar, gold, oil and the stock market appears to be in flux right now; this supports the idea that a major trend change has occurred.

We sold REG today for a loss.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
SDS	44.12	45.96	+4.2%	42.99	N/A	Chart
TWM	32.36	34.16	+5.6%	31.32	N/A	Chart
FXP	10.04	11.17	+11.3%	10.71	N/A	Chart
ARIA	2.26	2.27	+0.4%	2.13	N/A	Chart
VXX	57.34	62.69	+9.3%	58.42	N/A	Chart
V	70.44	70.10	-0.5%	69.27	N/A	Chart

A re-up for tomorrow in FXP, and the other promising chart is correlated to FXP. It is OK to add to your existing FXP position.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
FXP (Ultrashort Xinhua 25)	11.46	10.94	10.71	Chart
EEV (Ultrashort Emerging Markets)	17.36	16.79	16.14	Chart

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

Update 09/02/09

The day began with a furious rally to close yesterday's gap down open. Once the gap was closed, the markets reversed in a hairpin turn and proceeded to crash for the rest of the session. The bear market rally appears to be done, and if that's the case, market dynamics will reverse. Instead of furious rallies with shallow pullbacks, be prepared for relentless selling with sideways bounces.

We lost several long positions: AUY (bought today), UYG and SRZ, but our short positions really blossomed. We also bought ARIA.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
SDS	44.12	45.60	+3.4%	42.99	N/A	Chart
TWM	32.36	33.82	+4.5%	31.32	N/A	Chart
FXP	10.04	11.43	+13.8%	10.71	N/A	Chart
ARIA	2.26	2.35	+4.0%	2.13	N/A	Chart
VXX	57.34	62.36	+8.8%	58.42	N/A	Chart
REG	33.27	32.27	-3.0%	32.09	N/A	Chart
V	70.44	70.14	-0.4%	69.27	N/A	Chart

Waiting for setups to develop in the coming days after today's wide range move.