Trade Ideas for 01/30/09

While I thought it was unlikely that we'd get much higher before a pullback, it would've been nice if the sellers eased up a little and gave us a mild consolidation day. Instead, we got a furious sell-off, and tomorrow looks like it's do-or-die for this budding rally, simply because there's not much room on the downside!

What's encouraging is that the Nasdaq's pullback did fit the "mild consolidation" bill—it closed above support—and we did have three up days in a row before this pullback. So let's see if the bulls will only let it be a one-day thing. If not, time to get defensive and seriously consider the possibility of imminent new lows (depending on how much lower the market closes).

No new holdings, and by Friday's close we will have to sell BEAV because it reports earnings on Monday. A real shame because this chart looks like it has great potential. In fact I had it at the top of my preliminary list for tomorrow, but earnings risk is simply too high.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
BEAV	9.07	9.87	+8.8%	9.56	Close position by end of day	Chart
AAPL	90.01	93.00	+3.3%	89.73	Consider selling on a close < 92.60	Chart
ICO	2.53	2.62	+3.6%	2.45	Consider selling on a close < 2.57	Chart
IVN	3.01	2.82	-6.3%	2.59	Consider selling on a close < 2.81	Chart
TWC	18.93	19.32	+2.1%	18.79	Consider selling on a close < 19.05	Chart

For tomorrow, let's stick with strength, Nasdaq stocks.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
QQQQ (Nasdaq-100 ETF)	30.66	29.47	N/A	Chart
EXPE (Expedia)	9.44	8.91	8.60	Chart

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

Trade Ideas for 01/29/09

Today the market gapped and ran, only letting up for about an hour as it digested the Fed's announcement. Most charts closed near their highs of the day.

We sold SH early for a larger-than-budgeted loss as it gapped down. We bought TWC, but EWC gapped too high and didn't pull back enough, so it's left off our roster of holdings.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
BEAV	9.07	10.36	+14.2%	9.56	N/A	Chart
AAPL	90.01	94.20	+4.7%	89.73	N/A	Chart
ICO	2.53	2.70	+6.7%	2.45	N/A	Chart
IVN	3.01	2.94	-2.3%	2.59	N/A	Chart
TWC	18.93	19.53	+3.2%	18.79	Consider booking some profit at the 50-day moving average around 19.76	Chart

Not many charts have the setup I'm looking for since they ran so high today. Here are a couple I found.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
TV (Grupo Televisa)	15.51	14.68	14.32	Chart
CSIQ (Canadian Solar)	5.86	5.45	5.02	Chart

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

Trade Ideas for 01/28/09

After inching up the past couple sessions, the market heard some rumors after-hours that it really, really liked, namely that the US government (in other words, its people) would be buying distressed debt from banks. Although you and I might not like owning our neighbors' defaulted mortgages, the market certainly likes that we do, and so the financial sector roared higher after hours. Financials are set to gap up on the open. Since they were the main problem weighing the market down, it would seem that a rally is in the offing, especially given the recent upward drift.

Not so fast, though. Tomorrow, at around 2:15pm ET, the Fed makes their statement (FOMC announcement). This bi-monthly (give or take) event tends to act as a catalyst for extreme market volatility. It can cause V reversals and wild whipsaws. I plan to reduce positions in the hours leading up to the announcement, and I might wait on new ideas until after the dust settles.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
SH	79.23	76.23	-3.8%	75.49	N/A	Chart
BEAV	9.07	9.35	+3.1%	8.31	N/A	Chart
AAPL	90.01	90.73	+0.8%	86.49	N/A	Chart
ICO	2.53	2.70	+6.7%	2.23	N/A	Chart
IVN	3.01	2.88	-4.3%	2.59	N/A	Chart

If you decide to elect new positions in the morning, consider reducing prior to the announcement. You can always re-elect after the announcement is made.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
TWC (Time Warner Cable)	18.93	18.22	17.99	Chart
EWC (iShares Canada)	17.16	16.49	N/A	Chart

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

Trade Ideas for 01/27/09

After a strong start, bullish enthusiasm got ahead of itself and markets pulled back. The good news is, the pullback wasn't severe, and major indices closed positively. Perhaps this is enough for the bulls to mount a campaign Tuesday; we'll see.

The day's range was wide enough that we lost a long and a short. All of yesterday's ideas were elected early on. Into the second week of a narrow range, it's still a grind.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
SH	79.23	77.06	-2.7%	75.32	N/A	Chart
BEAV	9.07	8.97	-1.1%	8.31	N/A	Chart
AAPL	90.01	89.64	-0.4%	86.49	N/A	Chart
ICO	2.53	2.46	-2.8%	2.13	Consider selling on a close < 2.27	Chart
IVN	3.01	3.05	+1.3%	2.59	N/A	Chart

A couple longs in case the market gets going to the upside. If you already own some longs, no need to take on more, as nothing much has changed.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
CSIQ (Canadian Solar)	5.96	5.05	N/A	Chart
PBR (Petrobras)	25.46	24.04	22.91	Chart

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

Trade Ideas for 01/26/09

The market's in one of those situations where an equal number of people ardently believe that it's finished a final correction and will soon slingshot higher as believe that it's about to break down to new lows. Recent history (i.e., last summer) suggests the latter course, but the market is famous for defying patterns and taking off in a new direction. For example, did anyone notice that the gold-dollar link has been turned upside down? Both have been rising, whereas the pattern had been for the two to have an inverse relationship.

Who knows which direction the market will pick next? Is the bad news now accounted for in the collapsed stock prices, or is there far worse to come? Is that a bull flag on the chart of the S&P, or is it a descent in progress? It just comes down to how you look at it. Kinda like the picture above. (What do you see, a young woman or an old crone?)

What I do is wait for the market to make a move and then jump aboard. Unfortunately, in the chop of the past week we've gotten fake-outs from both the long and short side, so now we are positioned in anticipation of what's to come, rather than being on the sidelines until something happens. Nevertheless, the right attitude to take amidst the uncertainty is to wait and see. Make sure to sell at the sell-stop and keep both the bullish and bearish possibilities in mind.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
DOG	75.33	74.10	-1.6%	72.77	N/A	Chart
SH	79.23	77.58	-2.1%	75.32	N/A	Chart
AER	6.21	5.83	-6.1%	5.29	N/A	Chart
BEAV	9.07	9.04	-0.3%	8.31	N/A	Chart

The current holdings list is starting to look redundant (SH & DOG, AER & BEAV), so here are some totally different ideas for Monday.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
IVN (Ivanhoe Mines)	3.01	2.59	N/A	Chart
AAPL (Apple)	90.01	86.49	N/A	Chart
ICO (International Coal)	2.53	2.27	2.13	Chart

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

Trade Ideas for 01/23/09

Despite the wide range, today's prices were within the bounds of yesterday's highs and lows, making it an inside consolidation day. While the market could still break to the upside, time is running out.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
BEAV	9.07	8.87	-2.2%	8.14	N/A	Chart
SH	79.23	77.78	-1.8%	75.32	N/A	Chart
AER	6.21	5.90	-4.9%	5.29	N/A	Chart

Although we're down in our current holdings, their charts look good; it just depends on which way the market breaks. Tomorrow's ideas are essentially duplicates of our current holdings (note that AER and BEAV are both airline-related), with DOG instead of SH for the short-side bet. I don't recommend doubling down on your positions; these ideas are only good if you don't have a position in them yet. This is because I don't think it's time to take on more risk. The market has yet to indicate which direction it will take.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
AER (AerCap)	6.32	5.69	5.29	Chart
DOG (Short Dow)	75.33	72.77	72.42	Chart

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

Trade Ideas for 01/22/09

After a bad open, the market started climbing out of the hole it had dug for itself. While it's still a LONG way to the top of the pit, it's possible that the financials put in a double bottom yesterday and will proceed to do a fast rally to the 50-day moving average, bringing the rest of the market with it. The other possibility is the one spelled out by the main trend so far this year: further downside, with today's action being nothing more than a oversold bounce. While I give this scenario the edge, both are valid. We'll see if this rally has legs in the coming sessions.

We had a dramatic reversal of fortune in our current holdings, as loser became winner and vice versa. We also acquired a new holding.

Current Holdings
Ticker	Basis	Closing Price	Perf.	Sell-Stop	Additional Exit Guideline	Chart
BEAV	9.07	9.14	+0.7%	8.14	N/A	Chart
SH	79.23	76.69	-3.2%	75.32	N/A	Chart
AER	6.21	6.27	+1.0%	5.29	N/A	Chart

Sticking with the idea that the market could go either way, I'm giving SMN another shot but also highlighting GTI, which, while technically not a component of the index that SMN is short, would not be out of place in that index.

New Trade Ideas

Ticker	Entry	Exit A	Exit C	Chart
SMN (UltraShort Basic Materials)	44.33	39.28	37.33	Chart
GTI (Graftech)	8.74	7.81	6.80	Chart

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