|
After Market Close Jan 25, 2010
|
Bounce
It's time for more bounce. Today really didn't fix the oversold condition. Barring really bad news, there ought to be more rally to ameliorate the oversold condition.
| DJIA: The Dow bounced but what a disappointment for the Bulls!
| 
| | SPX: The S&P bounced better, but it didn't hold well. I think there's more, though--both rally and then decline. | 
| | NDX: The Naz was up but what an ugly stick. | 
| RUT: The Russell was barely up at all.
| 
| | HUI: The miners are telling us something. The Buck is still in rally mode. | 
| | DJT: The Trannies still look broken. | 
| | RTH: The Retailers barely bounced. | 
| | XLF: The financials held support. | 
| | DJUSHB: Home Builders gave us a doji. | 
| | SOXX: The Semi's were up, but they're not out of the woods by a long shot. | 
| | GWW: WW Grainger came on like a champ (I'm resisting the urge to quote Harry Potter again)! | 
| | DISH: Dish rallied but so what? Nothing too Bullish. | 
| SMRT: SteinMart continues lower.
| 
| | VISN: VISN continues south. Snug the stop. | 
| | TUP: Tupperware was up a tad and actually, I'm a little worried. Just a little. | 
| APKT: Acme Packet held fine, though I've have preferred a rally.
| 
| | IYR: Real Estate bounced but it's just the market. I doubt we've got anything sustainable going on. | 
| SAI: SAIC was up and it makes me worry, but not too much as yet. No harm done.
| 
| TQNT: We got in Triquint late in the day. Let's see if we can get a payoff.
| 
| | SBUX: Starbucks looks weak here. There's a gap way down there, too. I'm noting more and more folks are finding alternatives to their SBUX habits. I'm not one of those giving up on Starbucks, but many small boutiques are popping up with roasts that rival the best. | 
|
Summary:
I'm still thinking we're in a Bull Market and I still think that we will rally tomorrow or Wednesday at the very latest. After that, however, I'm confident that we have more work to do on the down side. It may take a week or two to fix things, too. Now is the time to be very circumspect. Play both ends against the middle and honor your stops.
Be Well, and Trade Smarter Than the Average Bear!
-The ChartSmarts Team
Current Positions:
Long 50% GWW at 99.41, stop at 98.27
Short 25% DISH at 20.38, stop at 19.64
Short 25% SMRT at 10.06, stop at 9.34
Short 25% VISN at 10.89, stop at 10.07
Short 25% TUP at 43.41, stop at 45.56
Long 25% APKT at 11.74, stop at 10.79
Short 50% SAI at 18.71, stop at 19.16
Short 25% IYR at 45.07, stop at 46.66
Long 25% TQNT at 6.43, stop at 5.89
Watch List:
SBUX: Short 25% on a print of 22.12, stop at 23.93
Changes in Current Positions:
Move the stop down on DISH to 19.64
Move the stop down on SMRT to 9.34
Move the stop down on VISN to 10.07
Move the stop down on IYR to 46.66
We are now 25% long TQNT at 6.43
| |   
*30 Minute Trading Rule:
In order to prevent whipsaws, we use a 30 minute trading rule. This means that, as a general rule, we are going to "sit on our hands" during the first 30 minutes of trading, this includes the lifting of stops during this 30 minute period as well. Additionally, if after the first 30 minutes of trading the range of the stock pick is within the stop and buy/short boundaries presented, the trade recommendation is valid. If the stock's range is outside of the buy/short and stop boundary, the trade recommendation is VOID. E.g. if the recommendation is "Buy a print of 10.25, with a stop of 9.95," and the stock trades up to 10.50 during the first 30 minutes, we would pass on the trade. Similarly, if that stock were to trade down to 9.90 before 10:26, the trade would also be void.
In addition, due to Market Makers, programmers, and market miscreants targeting our stops, a long pick must trade at a stop or below for a full 5 minute bar before actually triggering the stop. For a short pick, the stop must trade at or above the stop for a full five minutes before triggering a stop. This should have the effect of reducing the risk of 'gunning for our stops', though it will subject us to more technical risk. At this point, we believe it is a worthwhile trade off.
There is no 30mn rule on limit orders, but if price gaps out of the buy/stop range the trade is void.
Rule on stops:
As a general rule for the model portfolio, we will lift all stops on existing positions for the first 30 minutes of trading. As a practical matter, subscribers may wish to leave their stops in place if they expect to be incommunicado or unavailable during that time to monitor positions.
| Past Performance is not a guarantee of future returns.
Trading is risky. Trading entails unique risks, so get with your broker and do your homework before you take any trades based upon this or any model, newsletter, or trading service. Never trade with money that is necessary to your near- or long-term financial well-being.
None of the ChartSmarts™ Newsletters should be construed as a solicitation to buy or sell any security or commodity. We aren't your advisor and we aren't your broker. Any decisions you make are yours alone.
Though we do keep a hypothetical valued account track record, none of the performance referred to should be construed to be that of an actual account. Performance is not based upon back testing, and it does not represent an actual trading account unless explicitly stated. From time to time, we'll be trading the same ideas that we're discussing here. We make every effort to insure that we and our associates not "front-run" subscribers, or to otherwise affect the price of securities that we hold or discuss. Be aware that sometimes we, or our clients, family, or associates, will hold the same securities that we discuss in ChartSmarts. Occasionally, our trading actions may not be the same as those discussed in ChartSmarts, for a variety of reasons. We will never attempt to manipulate the price of any stock for any reason.
ChartSmarts (the "Newsletter') is protected by federal and international copyright laws. Equity Guardian Group, LLC., publisher of the Newsletter and owner of all rights therein, retains all proprietary rights to the Newsletter. Equity Guardian Group, LLC. hereby grants you, as a subscriber, the limited right and license to this issue. All recipients must receive the Newsletter directly from ChartSmarts.com. The Newsletter may not be forwarded or copied without the prior written permission of Equity Guardian Group, LLC.
| |
