Trade Ideas for 10/21/09

The S&P broke down through the lower channel line and is attempting to recover. The action today was anti-climactic in that there wasn't much of an attempt to stay above the line, and after breaking down there wasn't much of a push up. This suggests weakness. We nibbled on the short side with an entry into TWM. If there's follow-through on the downside, we'll enter more short positions tomorrow.

Note that we did not elect CBAK because of the "disregard first minute of trading" rule.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
SSO	32.68	36.63	+12.1%	35.99	N/A	Chart
AONE	24.31	24.52	+0.9%	23.22	N/A	Chart
TWM	27.58	27.41	-0.6%	26.35	N/A	Chart

The charts of the inverse ETFs are starting to shape up. In particular, note how the 50-day moving average of SRS has flattened out in recent sessions. While SRS can still drop from here (meaning market continues rising), a change in the direction of the 50 alerts us to the possibility of a medium-term trend change. On a different note, precious metals appear to be at a crossroads, so for tomorrow there are bullish (HL) and bearish (ZSL) plays on silver.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
HL (Hecla Mining)	5.11	4.67	N/A	Chart
CHS (Chico's)	13.86	13.47	N/A	Chart
ZSL (Ultrashort Silver)	4.92	4.63	N/A	Chart
SRS (Ultrashort Real Estate)	10.07	9.33	N/A	Chart
SKF (Ultrashort Financials)	24.37	23.42	N/A	Chart

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