Trade Ideas for 10/28/09

Tuesday the market dipped down just a tad and consolidated. No Black Tuesday. Instead, we have a pattern of a large downdraft (several days' worth) followed by a narrow-range day, a pattern that has led to bounces in the past. At this point, I don't know whether a bounce will occur, and if so, whether it will be tradable. A major difference this time is that a sizeable minority of charts on my screen look terrible, so my guess is not a tradable bounce.

Regardless, if you hold many short positions, it would be prudent to book a little profit tomorrow and/or set sell-stops for some/partial positions at Tuesday's low. In any case, do keep a core holding. The possibility of a waterfall decline from here cannot be discounted. Once everyone expects a thing to happen, chances are it won't, because markets are perverse.

We bought QID today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
TWM	27.58	29.67	+7.6%	26.99	N/A	Chart
DUG	12.33	12.53	+1.6%	11.79	N/A	Chart
EEV	12.42	12.85	+3.5%	11.67	N/A	Chart
DXD	33.51	33.63	+0.4%	32.09	N/A	Chart
SDS	38.78	39.50	+1.9%	37.17	N/A	Chart
QID	22.51	22.72	+0.9%	21.29	N/A	Chart

The market's at critical support. Failure could mean a sheer drop down. So far during this rally the market hasn't failed critical support yet, so in that sense tomorrow's ideas are long shots. Don't partake heavily of them. DUG is a re-up; if elected, set sell-stop for entire position to 12.28. DXD is also a re-up; sell-stop for that one is 33.14 .

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SRS (Ultrashort Real Estate)	10.21	9.62	9.19	Chart
DUG (Ultrashort Oil & Gas)	12.84	12.28	N/A	Chart
DXD (Ultrashort Dow 30)	33.93	33.14	N/A	Chart

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