Trade Idea for 01/28/10

The Fed announcement provided a catalyst for a change in direction. After hitting a lower low, the market rebounded and now appears to be following the green scenario from a couple days back. We bought ALSK, PSQ and VXX today.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Addl Exit Guideline	Chart
SRS	7.61	8.03	+5.5%	7.29	Consider sell-stop on partial position at 7.92	Chart
MZZ	21.11	22.17	+5.0%	20.49	Consider sell-stop on partial position at 21.78	Chart
ALSK	8.14	8.11	-0.4%	7.91	N/A	Chart
PSQ	45.26	44.61	-1.4%	44.39	N/A	Chart
VXX	32.26	31.00	-3.9%	30.49	N/A	Chart

If the trend changed on January 19th, then this bounce is countertrend, should take the market up to the 50-day moving average but not extend much farther. While not a part of the system, the idea of initiating some short positions around this average is not without merit. The exit point would be at the market high on January 19th. This is a riskier trade because it's buying on weakness, and if it doesn't work out evokes a very different emotion at the point of exit that makes it harder to exit. But again, the idea is not without merit as the market often does a 1-3 day countertrend kiss of the 50-day moving average. I would look to Friday or Monday as likely candidates as far as timing of such a move.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
DGP (Gold Double Long ETN)	26.72	25.79	N/A	Chart

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