TBT - Big Mistake - Let's Analyze

Let's talk about TBT - the Ultrashort Treasuries ETF. Fundamentally, the idea that Treasuries would be sold down and be a long term winner makes sense. However, that type of analysis is not what I do and based on the trade results (of being short during a phenomenal long run by Treasuries) we need to take a closer look at what went wrong.

Mistake #1 - Entering a trade because you believe in a good idea. Usually you can get around this fact without any damage but see Mistake #s 2 and 3.

Mistake #2 - Entering a trade without a true plan.

Mistake #3 - Entering a trade without an exit strategy and a stop loss.

Mistake #4 - Letting a short term trade turn into a long term holding. Tell me that has not been painful for people nowadays.

At this moment, the position is down approximately 33%. This type of loss is more than triple the acceptable downside that is a key criteria in the trades that I take. The simple placing of a stop order around the $55 level - a level I thought had no prayer of being breached would have contained the loss to roughly 13%, but I got lazy and thought I was smarter than that.

What to do now:

Quite simply - we will hold the position and look to exit out on an upside bounce toward the $50 level. However, a new stop goes in at $42 to protect against any additional downside.

Live and learn.

It has been a while since any posts were made - let's catch up on the activity

PLXS - stopped out on 11/19 at $14
TIVO - stopped out on 11/19 at $5.75

Stops in on PLXS and TIVO

PLXS - $14
TIVO - $5.75

AXYS - Stopped Out at $59 on 11/12

DAL - Stopped Out at $7.40 on 11/12

AXYS - Bought 150 @ $67

Looking for a target upside near $90. Stop goes in at $59 for now, but this will get moved up as the chart continues to form.

TBT - Bought 300 @ $63.80

Monday Buy List Starter - Specifics Will Follow in the Next Post

BEAV
AXYS
GME
ATVI
UYM
FDX
More TIVO
Others will follow

Market Observations

During Thursday and Friday we witnessed a dramatic turn in the Bullish Percent Charts - every Index and Industry Group went into Bull Alert or Bull Confirmed. Some of the Index groups have turned up and given a Bull Alert signal from a level below 20%. This is a signal that we have not seen yet in my trading career, which started 15 years ago.

That means one of two things - this is either an amazing time to Buy Stocks, or we will ultimately need to rewrite the rules around using the Bullish Percent Charts. I am going to go with Buy Stocks.

Now I am never one for an all in strategy so we will stick with the shorts we have put on, but it is worth noting that in any of the stocks that were very shortable a couple of weeks ago, they have simply stopped going down. They are not breaking downside levels of support and the market has that coiled spring feeling. We remain oversold - perhaps all of the government moves are finally starting to work.

TBT - One to Buy on Monday

TBT, the UltraShort Lehman 20 Plus Treasuries ETF is forming a great pattern on the P&F chart. A long position in this stock is simply a bet against US Bonds in the long term.

The stop for the trade (56) is much larger than what is normally acceptable at PTS, but the chart pattern suggests we will be safe once a break of 65 and 66 occur, and occur they will. We will look to raise our stop once the new pattern evolves. The initial upside target for the trade is $83.

Important to note is that the break to 65 will also break the P&F downtrend, starting a new uptrend - very important.

As a result, we will buy 300 shares for the portfolio as close to $64 as possible and anticipate this position being in the portfolio for a long time. While we anticipate this fact, it is still worth remembering that if a pattern breaks down, the loss is taken no questions asked.

DFS Short - Stopped Out at $12.15

Wow, that was fast.

Bullish Percent Indices

A number of the bullish percent charts have gone into a Bull Confirmed status at extremely low levels. We will be analyzing this further over the weekend but events like this will shift the model portfolio significantly to a long bias.

Shorting Some DFS - With a Really Tight Stop

Adding a short position of 300 shares in DFS this morning at $11.60. The target for this trade is $10 with a stop going in at $12.15.

Getting Long - TIVO, PLXS

Adding 1000 shares of TIVO at 6.75 this morning. The P&F chart is not with us but the strength on the Netflix announcement yesterday and the breakout today suggest that $10 can be seen within a couple of weeks.

Adding 400 shares of PLXS this morning at $17.50. Target of $25, downside stop TBD (in the 14-15 area).

DAL looks great - stay with it.

Repositioning - Shorting Some Drugs

JNJ - Shorted 200 shares this morning at $60.75 - stop goes in at $65. Downside to the low-40s.

ILMN - Shorted 300 shares this morning at $30.80 - stop goes in at $34. Downside to the mid-teens.

AAPL - Stopped Out at $102 on Wed.

CSCO - Mistake but Not a Huge One

Stock never really broke $16. Taking advantage of the bounce to close the position this morning at $17.5.

CSCO Long Position Was a Mistake

The P&F Chart has issued a new sell signal and we were not prepared for that. This position will be monitored and hopefully kicked out on a bounce. Worst case, stop will be put in at $15.75 after trading opens on Monday.

AAPL - Stop is in at $102

This stop point is based on the new P&F formation.

Bought 300 DAL at $8.75

Stop is in at $7.40

Ouch - GS stopped out at $102

That was a swift kick in the (your choice).

Bought 50 shares of GS @ $120

Airlines Are On Watch

Delta (DAL), Continental (CAL) and Republic Airways (RJET) all look to have some good upside for a short term trade.

It seems crazy to think about buying airline shares as we head deeper into a recession, but perhaps lower oil trumps those bad feelings?

We should not be chasing these stocks higher, the entry points and stop points are below:

CAL - Entry $16.5, Stop $14.75, Target $23
DAL - Entry $8.75, Stop $7.40, Target $14
RJET - Entry $11.25, Stop $9.75, Target $15

Based on the above, I will target DAL for the Model Portfolio

Going Long Goldman Sachs

Yesterday GS broke above $120, and while the Point and Figure chart is not with us, we are going to dip our toe in the water for a short term long trade. The stock can make its way back toward the $135 mark, and may have enough strength to get to the upper $140s.

If it opens down today that would be a gift as the target entry would be better around $120.

Purchasing 50 shares for a short term trade.

Covered Up Some Shorts

The retail stocks seem to have found a short term bottom and I am closing out the short positions, declaring victory and waiting for higher prices to put them out again:

300 M @ $10.60
100 GPS @ $13.25
100 ARO @ $25.50

I want to reiterate that I do not believe that retail and related stocks are done going down. It just feels like there is some small upside and better prices to short at in the near future.

Getting Long Some CSCO

Opening a position in CSCO, 300 shares @ 18.50. Looking for a short term move into resistance at $22.

Shorting More AAPL - $98.75

Shorting 50 more shares of AAPL at $98.75 ahead of earnings next Tuesday. Expecting disappointing guidance and a swift move downward.

Should take my own advice

Had I simply taken my own advice and executed the trade strategy outlined last weekend in the Blog I would have cleaned up. But alas, focus was diverted into a stock someone else mentioned and clean up I did not.

There are a lot of good patterns developing that will prove profitable - more to come.

Short List

In addition to the quick long ideas, I am also looking at the following short ideas, either soon or after a bounce:
a@d@v@ s@

MGA - after slight bounce
CRMT - soon
CACC , ACF - Monday
PCAR, KMX, CPRT - after slight bounce
BNI, UNP - before CSX's earnings on Tuesday

The RLX should be watched closely as retailers should be shorted as the index bounces above the 300 mark. Top candidates would be BBY, ANF, URBN, LULU, JCP, SHLD, JCG and GES.

Plan for Monday - Select Buys for a Short Term Trade

Now that we have had a good night's rest, let's try to assess some of the recent chaos.

There were a number of stories that came out after the market closed on Friday about forced margin selling on behalf of company executives as well as rumors of potential hedge fund liquidations and closings.

To start, Aubrey McClendon (CEO of Chesapeake Energy) apparently used borrowed funds to acquire his millions of shares. As a result, it is reported (by Bllomberg and other sources) that he has involuntarily sold all of his 33.5 million shares to meet margin calls. Sort of a real life Trading Places moment. Now, why a billionaire would use borrowed money like that to increase his position is something I do not uite understand but you have to figure that kind of forced selling will mark a bottom in the stock.

Apparently birds of a feather flock together because Bob Simpson (CEO of XTO Energy) sold more than $101 million dollars worth of XTO stock for similar reasons.

The rumors of some hedge fund closings are unsubstantiated at this moment but if you take a look a the chart of virtually any oil-related stock, it would appear that one of two things is happening:

1. A Hedge Fund or Funds that were long energy are being liquidated involuntarily, or
2. The world is coming to an end

Will keep an eye out for confirmation of the news, but some thoughts for next week are that you can get long some energy names for a trade. I repeat for a trade. Since the plans are short term in nature, I am considering buying October calls on some of the names below but need to do more work this weekend to put together the actual plans.

At a minimum, in the PTS Model Portfolio we will get long some of the following:

CHK
XTO
XOM
NOV
RIG
DO
HAL
SLB (appears the strongest at first glance)

Food and drug stocks are now a place where we can dip our toes in as well for long term bargains - specifically PEP, GIS and PG. But that is not what this blog is for. Trying to develop a thesis for GIS getting back to $65 quickly but am not loving the idea right now. Perhaps the Oct 60 calls are cheap for a reason.

Lastly - what the hell happened to JNJ - Christ Almighty - just checked on that one.

Oh wait, a friend of mine bought JNJ earlier in the week - WHY DID WE NOT GO SHORT IMMEDIATELY.

All kidding aside, that one will be added to the long list, perhaps on a long term basis as there has to be some value there as its business is sounds and it does not need access to the capital markets. JNJ releases earnings this coming Tuesday, but I am not sure earnings matter at this point as the markets are being ruled more by fear - check out the VIX chart.

Til tomorrow.

Sticking with the AAPL Short

Missed a good opportunity to cover the AAPL short in the high 80s but am confident we will see that again. Although folks will continue to try to rally this stock, the earning of AAPL are going to get hit hard - it is just a matter of time.

Will look to put out more shares if the stock approaches the $105-$110 range

Covered the Majority of the Retail Shorts

Essentially covered half of the retail shorts yesterday as the velocity of these declines leads me to believe that a bounce is near. Unfortunately none of the trades were done at the open but all result in great profits. Trades were as follows:

Buy to Cover 300 shares of ARO at $24.50
Buy to Cover 400 shares of GPS at $14
Buy to Cover 200 shares of KSS at $32.50

Buy to Cover 200 M at $10.50. Only covering 200 of Macy's as I believe the company is heading straight toward bankruptcy after we get through General Motors, Ford and Chrysler.

Seeing things a little more clearly

Executed a lot of trades today, here they are:

Sold JNJ at $68 and PKI at $24. Healthcare stocks are breaking down one by one. JNJ has put up a good fight but the upside is no longer there.

Now, while I wish I had been more aggressive on the AG front, the trades were just not meant to be. They will be very shortable on a bounce, along with oil and oil service.

Today we dipped our toe in the retail arena via a number of shorts. The next few months are goign to be even more brutal for retailer and each of the following have at least 25% downside.

Shorted 200 KSS at 43.50
Shorted 400 ARO at $30.50
Shorted 500 M at $17
Shorted 500 GPS at $17.50

Also put in a small short position of 50 shares of AAPL at $103.25. Price target for the stock is in the low 70s based on the current chart behavior.

Lots of Cash to Deploy

However, we are having trouble dealing with the volatility.

Have numerous short and long opportunities but will revisit on Monday 7/21

Covered Some Shorts, Let Go of Energy

MA - $270 on 7/16

DVN - $100 on 7/18

EP - $18.75 on 7/18

WYNN - the stock has turned around. While we do not believe in the fundamentals, we believe in the chart - stop in at $90.50.

JNJ - Bought 125 shares at $68 on 7/18

Stopped out of CVS at $37 on 7/15

Friday Executions

Positions Closed:

Sold 300 shares of BJS at $30.25
Sold 50 shares of HAL at $48.25
Covered FNM and FRE into the morning's silliness. No point in overthinking situations like this - declare victory and move on. Covered at $9.25 and 6.25 respectively.

New Positions - expect that Drugs and Biotech wil be big winners during the second half of 2008 and that Technology and Industrials/Transports will be big losers over that same period:

Bought 300 shares of PKI at $28.50

Bought 150 shares of WYE at $48.25

Bought 200 shares of VRTX at $33

Sold Short 200 shares of XLNX at $23.50

Sold Short 50 shares of our old friend BNI at $96.75, the stock is heading to $70

Sold Short 100 shares of FDX at $75, that stock is heading into the $50s.

Position Updates

Gonna let DVN run, aim for a higher exit point - around $113

Truth be told, expected WYNN and MA to roast the portfolio today and force some covering transactions based on pre-market trading. However, their weakness is showing through - consider the following:

MA got added to the S&P 500 and was only able to eke out a 1.64% gain on the day. That means there were an awful lot of sellers waiting to unload shares and the stock is going to continue its downward trend. Long term, this stock is goign to be a big winner, but let's buy shares when the stock is around $220 rather than endure the pain!

WYNN was up $8.20 on the day to $78.14 on some short covering. To me, it looks like the chart is just setting up another good entry point to add to a short position of get some puts on the sheets. The Las Vegas numbers were so bad that the Macau strength is just not going to be enough to offset the US problems. This is just the tip of the iceberg as the entire casino business is in the toilet. Continue to monitor but do not see the $85 level being broken. In the meantime, we can use this strength to initiate short positions in LVS and/or MGM.

Repositioning the portfolio

Energy Stocks in general have broken. We will begin scaling out of BJS, DVN and HAL into the next rally. ATW and EP charts are still intact and will be monitored closely.

We will open positions in the drugs and healthcare fields starting today as follows:

PKI - around $29
VRTX - around $33.50
WYE - around $48.50

Althought the portfolio will get roasted today because of two short positions going the other way (MA being added to the S&P 500 and WYNN releasing news that was not negative enough), we will be adding to the short exposure here as follows:

XLNX - around $23.50
BNI - around $97
FDX - around $75.50

MA will be covered if the stock hits $268

One More Point - Concerned About a CVS Breakdown - the Stop at $37 is in

Should Have Been More Proactive

As we see MA breaking down and V sure to follow.

Sold the remaining stake in MA yesterday ($256.50) and sold V on the close ($79.45). Will look to buy both of them back much lower as they will be long term winners.

FCX has broken down with the rest of the metal and steel stocks and will be sold within the first half hour of today's trading - see downside to $90.

TRN has broken down completely and a stop is currently in at $32 - I would say that it is a long shot that the stock stays in the portfolio even though it will be a long term winner.

UNP - apparently we forgot about the stop mentioned on 6/16 at $74. New stop goes in at $70 as the rails are all broken now.

The energy stocks, while experiencing bad reversals yesterday, are still in tact. We will monitor upside momentum and adjust stops accordingly as the easy money has been made here.

Will add a number of new short positions - hopefully into a market bounce.

Short candidates are:

Financials (C, LEH, MER, BAC, more FNM, more FRE, AIG, BBT, STI, PNC, SCHW, OXPS)
Industrials (GM, CAT, DE)
Technology (WFR)
Casinos (LVS, PENN, MGM)
Retail (Everyone)

Shorting FNM this morning

300 shares, anywhere under $20 - target of between 0 and 5.

ETFC - Stopped Out at $3.25

Sold NKE at the open at 61.75

6/25 Transactions

CCC - We are stopped out at $17 - not sure what happened here, but will research and report later on.

Energy/Oil/Coal are taking a pounding this morning, will add exposure as follows:

75 shares of ATW at $107
25 shares of DVN at 113.75

6/23 Executions

VZ - sold at $35.50

Bought 300 BJS at $33
Bought 400 EP at $21.25

Sold Short 100 WYNN at $87.50

6/23 Plans

Will be selling out of VZ first thing in the morning.

The trip on the CCC train may be a short one - the stop is in at $17.

Also, looking to short a number of retail and regional bank names (AIG,WB, BAC, STI, DKS, CYN, BKS, PVH)

Looking to go long on some more energy names (EP, BJS, ARD, NBR, DNR)

CCC - Get on the Calgon Carbon train

Buying around $19.25, looking for $28 in short order

AT&T is dead - sold at $35.80

CLF - Sold at $101.25

NSC - Sold at $63.10

Plans for 6/16

The BP Charts continue to urge caution and some of the stocks in the model portfolio have broken down. We have gotten a nice bounce and will look to reposition the model portfolio as Monday will likely be the last day of the oversold bounce. The following will be sold on Monday:

CLF - Anywhere over $101 would be ideal
NSC - Anywhere above $63 would be ideal
UNP - We are putting a stop in at $74 as the rails seem to have topped out

While the trading action in T and VZ is poor, the P&F charts are still OK so we have to let the planned trades play out.

We will look to initiate some short positions on any further bounce in the retail and regional bank sectors.

6/9 Executions

Sold 30 shares of BNI at $112.25
Buy 50 shares of CVS at $42.75
Buy 25 shares of NKE at $68
Buy 50 shares of TRN at $38.40

Monday June 9th Plans

The Bullish Percent charts are flashing some warning signs, so appropriate action will be taken as follows:

Declaring victory in one of the rails - selling the remaining 30 shares of BNI in the morning - price TBD.

Adding 50 shares of CVS to the existing position, target buy price under $43.

Adding 25 shares of NKE to the existing position, target buy price under $68.

Adding 50 shares of TRN to the existing position, target buy price under $38.

Looking to start some short positions, on a bounce, as well as looking to establish new longs in the copper and coal world.

Short ideas are as follows: AIG, FRE (more), FNM, TCB, WTFC, MSSR, WFMI, GPS, PFCB, CAKE,

Long ideas primarily center around JOYG, FTK, PCZ, QTWW, LEI, END, XCO, PZE

Pruning NSC

Let's raise cash in accordance with our trading rules to stay off of margin.

Sell 50 shares of NSC at $67.60, let the balance run.

New Buys

Some interesting long opportunities have presented themsleves this week. While all steel stocks are loved at this moment (NUE, X and CLF), CLF has the most attractive trade parameters - 35 shares at $106. Upside is to $135 while the stop goes in at $99.

Starting a position in HAL - 50 shares at $48.75. Upside is to $73 while the stop goes in at $43.

FCX is screaming buy me right now but the model portfolio would have to go into margin to add the shares. Too attractive to pass up - 35 shares @ $115.75. Upsdie is to $155 while the stop goes in at $110.

Yesterday's Executions

Sold 10 BNI @ $107
Sold 10 UNP @ $150

Bought 100 VZ @ $38.75
Bought 100 TRN @ $36.25

CVS is looking great

Portfolio Updates

Keeping an eye on FRE as the stop point of $29 looks like a very real possibility given the strength exhibited yesterday.

NKE technically should have been kicked out of the portfolio at $65 as the chart broke down. I missed that, but since the stock showed some real strength over the past 2 days, we will attempt to ride it to the upside and look for a chart reversal. A new stop is going in at $64 to protect the downside.

Going to take some more profits on the rails and let the rest ride, the charts have hit their targets. Sell 10 BNI around $107, sell 10 UNP around $150.

Looking to initiate some new buys in the following arenas:

Oil and Natural Gas - potential buys are DVN (adding shares), CHK, NOV, FTI, COP, NBR or HAL.
Solar and Wind Power - potential buys are TRN, PWR
Materials - potential buys are FCX, CLF, X, RIO, CAT, even looking at DE
Aerospace - potential buys are BA and BEAV

Going to buy another 100 shares of VZ at $39 or better

Taking some more profits - 35 shares of BNI @ $104

Peeled off 25 shares of V at $85.75

Peeled off 5 more shares of MA at $292.00

Buying ETFC at $4.03

MA - 5 shares sold at $279.50

Selling Another 5 shares of MA to book some more gains

Will post the execution later

E*Trade - Buy

Initiating one more Long position in the Model Portfolio - we are buying 500 shares of ETFC at a price of $4 or better. The stop goes in at $3.25 and our target is $10 - UD of 8.

More Executions

T - 250 shares at $38.50
NSC - 100 shares at $60.30
CVS - 150 shares at $41.20
VZ - 150 shares at $38
NKE - 75 shares at $68.10
FRE - 250 shares shorted at $27.40

CCE Stopped Out

In the excitement of declaring that we are in a new bull market, we neglected to note that CCE broke down, we are stopped out at 22.5.

Sale Executions - MA @ $238.5, UNP at $140.25

4/28 Positions To Initiate / Market Summary

As of 4/25, we are in full bull mode - the bullish percent charts are telling you to get long with your available cash. There are still two sectors which will provide shorting opportunities (Healthcare and Financials) but those positions should be selected carefully and played with tight stops since we are in the early stages of a bull run.

A new buy signal from deep in the depths of the BP charts was given on the S&P Telecom sector. As a result, priority will be given to initiate the following buy:

T - Buy at 38.5 or better, target of 52 and stop at 36.5 - UD of 6.75
VZ - looks ready to break out, but initiating a buy now will break a trading rule as the chart is showing a downside target - we will buy on a break of 38 as the upside is to 48 at a minimum, but likely higher.

In order to diversify, we are pruning back our 2 largest winners slightly:

Sell 20 shares of MA, leaves us with 30 shares
Sell 20 shares of UNP, leaves us with 30 shares

Long Positions to be Initiated:

ko - buy at 59.5, target of 90, stop at 56 - UD of 9.7
cvs - buy at 41, target of 64, stop at 37 - UD of 5.75
fdx - buy at 94.5, target of 130, stop at 92 - UD of 14.20
rtn - buy at 64.5, target of 88, stop at 61 - UD of 6.7
nsc - buy at 60 or better, target of 85, stop at 54 - UD of 4.16
nke - buy at 68.5 or better, target of 83, stop at 65 - UD of 4.14

Short Candidates to be Inititiated

fnm - short at 30.75, target 18, stop at 33 - UD of 5.6
fre - short at 28, target of 18, stop at 29 - UD of 10
fed - short at 16, target of 3, stop at 18 - UD of 6.5

4/7 Trading Thoughts - Target List Updated

A number of patterns have developed, some stocks broke down, some ran away. here is an updated list of the targets:

KO, long with a target of $90
CVS, long with a target of $64
UPS, long with a target of $88
FDX, long with a target of $130
MMM, long with a target of $92
RTN, long with a target of $88
NSC, long with a target of $85
PPG, long with a target of $80
ROH, long with a target of $70
LOW, long with a target of $39
NKE, long with a target of $83
YUM, long with a target of $59
TJX, long with a target of $51
FO, long with a target of $95


Ran away - CAT, DE, MON, DD, FCX
Broke Down - GE, LMT, WY, ATI

Model Portfolio has $22K in cash, will be allocated soon

Recent Trades and Thoughts

Sorry for the gap in postings, was on vacation through the middle of last week.

MTG turned around, the short position was closed yesterday at $13.

The following longs were executed late last week:

50 shares of DVN @109.77 on 4/11
100 shares of V @ 66 on 4/16

Taking a closer look at the retailers and some transports as new buys on a pullback since we missed the optimal opportunity on most.

4/7/08 Market Assessment and Trading Plan

The volatility continues, but the S&P 100, S&P 500, NYSE, NDX and the DJIA Bullish Percent charts are in Bull Alert status - we are heading higher folks. The market is a little overbought here and we will be timing our buys, but the next dip will most likely be less scary and steep than the ones we have become used to over the past six months.

The NASDAQ BP chart just entered into the Bull Confirmed status, and while the Technology and Healthcare charts are not good right now, expect that to turn shortly.

The following industries look ripe for the picking:

Transports - BP trend is Bull Confirmed with upside left. However, with BNI (new target of $117) and UNP (new target $155) in the portfolio already, am reluctant to add to the exposure here.

Consumer Staples - Now in bull confirmed status and breaking out - looking at the following candidates:
WMT, long with a target of $62
KO, long with a target of $90
CVS, long with a target of $64

Industrials- looking at the following candidates:
GE, long with a target of $51
UPS, long with a target of $88
FDX, long with a target of $130
MMM, long with a target of $92
CAT, long with a target of $90
DE, long with a target of $108
LMT, long with a target of $112 (very tight downside)
RTN, long with a target of $88
NSC, long with a target of $85

Materials- looking at the following candidates:
MON, long with a target of $154
DD, long with a target of $63
FCX, long with a target of $139 (need a pullback)
WY, long with a target of $76
PPG, long with a target of $80
ATI, long with a target of $97
ROH, long with a target of $70 (needs to hit $58)

Consumer Discretionary - looking at the following candidates:
LOW, long with a target of $39
NKE, long with a target of $83
YUM, long with a target of $59
BBY, long with a target of $54
TJX, long with a target of $51
FO, long with a target of $95 (needs a pull back)
JCG, long with a target of $59
HOT, long with a target of $69
GPS, long with a target of $32

Also looking at adding Visa (V) to the mix with a small weight. Although the trading history is virtually non-existent, this one has the potential to really move.

Lastly, new target for the MTG short is $2.

Time to make your shopping list

It is the opinion of this blog writer that we have seen our lows and need to begin to make out a long shopping list.

The portfolio holdings look strong (MTG is still pointing down and all longs are solid, with MA having the clearest upside.

More to come later in the week.

Market Bullish Percent Charts Still Say Caution

While some of the industry charts have turned up (Transports, Materials and Consumer Discretionary) and look strong, the overall market BP charts (SPX, NYSE, NASDAQ COMP) are still saying that we remain on the defensive. As a result no new longs are being initiated.

A few shorts will be considered, will keep you posted.

One final item to consider - the DJIA Bullish Percent chart just gave a Bull Confirmed signal.

Getting Long

BNI at $84.25, 75 shares.
MA at $186.75, 50 shares

The UNP chart turned around so we are holding that one now.

Shoulda, Woulda, Coulda

Should have covered the housing shorts immediately after the Fed's intervention last week. Clearly people believe that the housing crunch will be contained.

BZH covered at 8.10
DHI covered at 15.75

Fell into the Gap

GPS, stop hit, 300 shares sold at $17 on 1/15/08.

Covering a Few Shorts

Declaring victory on ABK, going to close out the short of 100 shares at $5.85.

Also going to close out the short of 100 shares of MBI at $8.95.

RIG - gone at $130

Stop order on RIG was executed at $130 - the moral of this story is obey your charts and when the BP charts are as bad as they look right now, NO long positions should be initiated.

RIG - 20 shares purchased at $138

Updates

Perhaps we were a little early jumping into RIG. As a result, we will be adding another 20 shares to the position anywhere under $138 as the market is very oversold and this will boucne back quickly.

As for the rest of the portfolio, stay the course on the shorts even though they will most likely bounce - there is another swoon coming as the Fed just does not realize the problems out there in the financial arena.

Let's talk bullish percent charts:

The DJTA Bullish Percent Chart is at 6, that's right 6 (S&P Materials, Technology and Consumer Discretionary are not much better at 16, 18 and 10 respectively). We should have paid closer attention to the pattern that recently developed in the UNP chart as it broke a triple bottom at $122. This stock will be sold on a bounce to $118.

S&P Financials are at 12, they are toast.

S&P Consumer Staples Bullish Percent is at 48 and getting worse. Retail and Restaurants short positions will show up in the model portfolio this week.

S&P 500 just went into Bear Confirmed status at 34. NYSE BP, NDX and NASDAQ are in a very similar position. No longs can be initiated.

S&P Healthcare BP charts is not experiencing as much carnage, this point is worth noting as healthcare may be a good place to consider adding any long exposure. Same comment goes for the Energy arena.

Overall summary, play thi next bounce with some very short term money. Consider adding longs in the healthcare and energy arenas, but definitely add shorts in financials, retail and transportation.

Long Positions are Dwindling

ADBE - a long standing long hit our stop point of $38 and has been booted from the model portfolio.

GPS - has gone from a winner to a loser in the blink of an eye. While it has not triggered the stop at $17, the fact that it touched $17.02 make me say, less optimistic it will still be in the portfolio when this coming Wednesday rolls around.

RIG - 50 shares added at $141

RIG - Short Term Trade

The carnage is getting very widespread and it feels like we should be picking at a few longs for a short term trade. A position in RIG will be established in the model portfolio at any price under 141, depends on the open.

50 shares will be added with a price target of $163 and a stop point of $130. The UD is slightly above 2 in this case. While the UD ratio is a little on the low side, the $138 point seen early yesterday looks like a wash out point.

Greedy on Our Shorts?

It feels that way but the charts are saying there is still more downside to MBI, ABK, BZH, DHI and MTG.

STX - Gone

Stopped out of the STX position at $25.50 on 12/31. Since this post is way late, will penalize the portfolio by a buck for the sake of honesty - stopped out at $24.50