I hope the market falls even more. There a couple companies I want to pick up but are still too expensive. I hope Mr. Market gets depressed and forgets to take his happy pills so I can pick up some good companies at great prices.

Market Commentary for Wednesday, February 6th.

The Point - SELL AND SHORT - THE TREND IS DOWN!!!

The Story - A Brief bounce during the day and then the markets began falling hard once again. The Dow, SP and Nasdaq all have confirmed a downtrend. The 7 day Exponential Moving Average is below the 21 day Exponential Moving Average, the Stochastics have turned lower and the MACD is still negative. Remember, we never had a confirmed uptrend, only a chance to re-establsh some short positions. As you consider trades, it seems that the Nasdaq and the SP have been relatively weaker than the Dow and as a result you will probably profit more from purchases of SDS or QID.

Current Position: 2/5/08 Bought an initial position of SDS at $63.57 and have a stop at $59.20. Will look to add over the next few days.

Scheduled Trades: Plan to add QID if we see some kind of a bounce and tighten my stop on SDS to ensure a profit!

PS - Be careful with Agrium (AGU) Most stocks tend to follow the general market.

Thursday Morning Trading Update:

With Cisco's poor report we might have a terrible morning tomorrow. I plan on moving my SDS stops to a profitable level so that if the market bounces I can reload at higher prices. It is possible that the market could make a run just above the highs from last week, or just simply bounce a bit like this morning's action. Regardless, we have intermediate term SELL signals. I will carefully watch the markets early action and will make a brief update at some point.

Trading Update:

Stopped out of SDS at $64.82 for a quick 2% profit as I could not watch the early action (gotta work still). Watching to get in QID as the Nasdaq continues to be the weakest member of the three. Let's see how this bounce progresses.

Market Commentary for Thursday February 7th:

The Point - THE TREND IS DOWN - Selling Opportunity for Long Positions. Shorting On Bounces

The Story - We had the bad Cisco #'s and a lower opening, but Mr. Market was up to his (I should say her) tricks and took a bounce. I stronly believe that when you have gains on paper in this kind of a market condition it is beneficial to set stop losses that guarantee a profit. The Trend is down, but we could see an additional bounce. Indicators point to the fact that the market has further to fall before it has a sustained positive run. I am targeting late February or March to begin going long, but time will tell. For now, it will be interesting to see if we get a bit more of a bounce or follow the recent trading channel lower. If you recently went made purchases, I would look for an opportunity to get out. The trend is still lower.

Completed Trades: Sold SDS today. (hit stop for a 2% profit)

Current Position: None

Scheduled Trades: Looking to establish a position in QID (Double Inverse Multiplier for Nasdaq 100)

Trading Update:

Placed a Limit Order to Purchase QID at $50.00. The earlier bounce brought us close to that and I think we might have a little more to go before we resume our trend lower.

Safe Trading

Market Commentary for Friday, February 8th, 2008:

The Point - SELL AND SHORT - THE TREND IS DOWN!!!

The Story - The Dow, SP and Nasdaq all have a Down Trend in place. The 7 day Exponential Moving Average has crossed below the 21 day Exponential Moving Average, the MACD is negative and the stochastics made a downward cross in each of the indexes. As we experience a bounce in the markets we are attempting to add to short positions or inverse index ETF's like QID, SDS, DXD.

Current Position: None

Scheduled Trades: BUY QID limit 50.00

Safe Trading!!!

Weekend Update:

As we look to the week ahead the trend is down. Looking for a good opportunity to add short positions or more likely pick of some inverse index funds (QID, DXD, SDS). This would take place in the event of a bounce early in the week or if we clearly resumed our downtrend.

As we look out a bit further, we will be targeting some good long positions that held up well and are breaking out to new levels once the markets turns upward.

Safe Trading

Market Commentary for Monday, February 11th, 2008:

The Point - SELL AND SHORT - THE TREND IS DOWN!!!

The
Story - Not much has changed with Monday's trading as we let our short term bounce play out. It would be good to close out long positions on the bounce and prepare to follow the trend which we see to be down. Our QID order was almost filled yesterday and maybe we will get in with today's action. Looks like we could have a strong opening. I imagine that the current bounce will turn lower by the middle or end of the week. If your order for QID, SDS, or DXD gets filled be sure to place a stop loss in case the trend does not continue. The paragraph below is from the previous post and stands for today as well.

The Dow, SP and Nasdaq all have a Down Trend in place. The 7
day Exponential Moving Average has crossed below the 21 day Exponential
Moving Average, the MACD is negative and the stochastics recently made a
downward cross in each of the indexes. As we experience a bounce in the
markets we are attempting to add to short positions or inverse index
ETF's like QID, SDS, DXD.

Current Position: None

Scheduled Trades: BUY QID limit 50.00

Safe Trading!!!

Market Commentary for Tuesday, February 12th, 2008:

The Point - SELL AND SHORT - THE TREND IS DOWN!!!

The Story - Today we got exactly what we wanted! The market gapped up on it's open and we should have had the opportunity to get in QID, SDS, or DXD at a nice price. I chose QID because the Nasdaq has led the market lower all along and also has had some of the largest percent losses, which will be our gains with QID. About mid-day the market peaked and began to fall. The Nasdaq gave up all of it's gains and even went negative before a neutral close. The Dow and SP lost half of their gains on a weak close. The trend is lower as the 7 day EMA is below the 21 day EMA and the MACD is negative for the Dow, SP and Nasdaq. Finally, the indexes are also bouncing lower off of their 21 day EMA which has served as resistance as the market has trended lower the past 2 months. The stochastics have turned neutral or higher with the bounce, which is normal, but should quickly turn lower in a continuation of the downtrend. I will be placing a stop at $48.50 on the QID trade and then adding SDS when QID is assured to be profitable.


Current Position: QID @ $50 (stop loss placed at $48.50)

Scheduled Trades: Add SDS when the trend is confirmed with a stochastic turn and a clear downward channel.

Safe Trading!!!

Market Commentary for Wednesday, February 13th:

The Point - The Trend is Down

The Story - It seemed like we were set up to change our trend yesterday, but today did prove us wrong. The moving averages and MACD are still pointing lower, but our recent bounce had some more legs than we thought. The stochastics have turned higher, but the trend is still down. The SP is hitting up against its 21 day EMA while the Nasdaq could see resistance from it's August lows and it's 21 day EMA. The Dow is also just above it 21 day EMA and hitting up against August lows. Make sure you have a stop loss on the QID trade detailed below at $46.50 for a maximum of a 7% loss and a probable gain. This bounce could extend beyond the recent bounce we saw in late January so the stop loss is important, but it will probably only be a matter of days before a clear downtrend resumes.

Current Position: QID @ $50 (stop loss placed at $48.50)

Scheduled Trades: Add SDS when the trend is confirmed lower with a stochastic turn and a clear downward channel.

Safe Trading!!!

Investors Business Daily presented that the Nasdaq only (not the Dow or SP) had a Follow Through Day yesterday. A big up day on increased volume is required for a Follow Through Day. Interestingly, the Dow and SP did not follow through due to lower volume. Not all Follow Through Days signal a market rally, but all market rallys have a follow though day. Actually the last follow through day came in late december, just before we started heading lower in earnest!

PLEASE KEEP THE STOP LOSS ON THE QID TRADE AT $48.50 TO MINIMIZE LOSS TO A FEW PERCENTAGE POINTS. The Trend is still lower, but a strong finish to the week could change that and we do not want to be in QID with a rallying market.

Safe Trading!!!

Happy Valentines Day!

Another big day of trading. The market showed obvious signs of weakness today and the trend is lower. We will be back in the morning to give the full summary.

Market Commentary for Thursday, February 14th:

The Point - The Trend is Down. Sell and Short

The Story - Thursday's trading was almost a mirror image of Wednesday as the market gapped down, bounced a little and proceded to go down hard. The trend is strongly negative with 8 of our 9 index indicators pointing lower. The 7 day EMA is below the 21 day EMA on the Dow, Nasdaq and SP. The MACD is negative on all three indexes and the stochastics on both the Dow and SP have turned lower with yesterdays's trading results. A down day today should turn the Nasdaq's stochastics lower as they are the only indicator remaining with a positive trend. No one can predict the market direction, especially near term (although we try), but we can follow the clear trends that we are given and limit our losses in case the market turns on us. If you had traded according to the trends given over the past two months your portfolio would easily be up 10% and possibly much more.

Today or Monday we are considering adding some SDS. If the market continues to trend lower we will move our QID stops to a profitable level with some room for market fluctuations and take an additional position most likely in SDS or possibly doing a SPY Bear Credit Spread.

Current Position: QID @ $50 (stop loss placed at $48.50)

Scheduled Trades: Add SDS or a SPY Bear Credit Spread when the trend is confirmed lower with a stochastic turn and a clear downward channel.

Safe Trading!!!

TRADING UPDATE:

1. Raised Stop Loss on QID to $50.50 to guarantee profits.

2. Initiated a Bear Credit Spread Position (Bought SPY 136 Calls and Sold SPY 134 Calls) at $1.05 Credit per Call.

Safe Trading!!!