After Market Close October 23, 2007 |
Persistent Rally
We had a nice rally yesterday, despite an attempt to shake some bulls loose. They'll likely try again today. There's certainly room to take the market down a bit, but there are some serious pockets of strength. This is probably a time to keep positions manageable, and put a couple shorts on, just in case, even as we try to lean a bit long.
|
DJIA: The Dow held quite well. |
 |
SPX: The S&P put in a Bearish volume signature last night and may have to test the lows. |
 |
NDX: Wow! The Naz is just strong. It's going to need to pullback soon, if only to rest. |
 |
RUT: Short-covering in the Russell. What a surprise! This index is a short for a hedge, somewhere in here. |
 |
HUI: The miners had a good day. |
 |
RTH: The retailers bounced smartly and held. |
 |
DJT: The Trannies sure rebounded. That's bullish for the economy. |
 |
BRKL: Brookline rallied, and I guessed it might, but let's see if it doesn't want to test. |
 |
PALM: Look at that PALM go! |
 |
SCON: Supercon is running too. Go figure. |
 |
OCR: Omnicare broke up and we're in. |
 |
ARAY: Accuray put in a fake out break-down and that's bullish. |
 |
CVG: Convergys looks poised to move. |
 |
QLGC: Qlogic is strong and if it breaks up, we want it. |
 |
DRI: Darden Restaurants is at resistance. No 30' rule on the stop. |
 |
BWTR: The Chartist likes Basin Water, and I'm "gonna dance with the girl what brung me" despite my trepidation over those wicks. |
 |
MNTA: Momenta Pharm looks like a classic Buy. |
 |
HAYZ: Hayes Lemmerz is just looking strong here. |
 |
AMGN: Amgen is strong, but I suspect it will pullback a bit in here before moving out of the wedge. |
 |
Summary:
We need to be very flexible in this market. There are problems but there is liquidity. The Fed is almost assuredly going to cut, but there may have to be "reasons" to give Uncle Ben political cover, so that could take the market down a bit. Play it nimble here.
Be Well, and Trade Smarter Than the Average Bear!
-The ChartSmarts Team
Current Positions:
Short 50% BRKL at 11.69, stop at 10.69
Long 50% PALM at 15.81, stop at 17.76
Long 25% SCON at 8.69, stop at 8.69
Long 50% OCR at 34.14, stop at 32.77
Watch List:
[color= red;]ARAY: Buy 50% on a print of 18.42, stop at 17.68
CVG: Buy 50% on a print of 17.78, stop at 17.02
QLGC: Buy 50% on a print of 13.63, stop at 12.79
DRI: Short 50% on a print of 42.64, stop at 44.46
BWTR: Buy 50% on a print of 12.12, stop at 11.63
MNTA: Buy 50% on a print of 12.64, stop at 12.13
HAYZ: Buy 50% on a print of 5.06, stop at 4.52[/color]
Changes in Current Positions:
Move the stop up to 17.76 on PALM
Move the stop up to 8.69 breakeven on SCON
We are now 50% long OCR at 34.14
| |   
*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 stop 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 10:00, the trade would also be void.
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.
| |
