Getting started

Friday the S&P/SPY was technically called a one-day key reversal. In Candlestick vernacular it would be called a piercing pattern, for all intents and purposes they are the same thing, a reversal pattern. Remember, reversal patterns need to be confirmed with follow through and it's not unusual for the market to close on Monday in the same direction as FRiday.

The S&P 500 saw increasing volume. The Dow did not qualify for a true piercing pattern, but did dee rising price and volume-bullish. The NASDAQ 100 qualified for piercing status but volumr fell off slightly-which is s bearish P/V relationship, but it wasn't a huge difference. Same story for the NASDAQ Composite. I prefer all 3 or 4 majors confirm together, it's a more solid foundation especially at a critical moment like a market reversal.

The SPY/S&P may have outperformed due to financials strength. XLF put in a full strength bullish engulfing pattern-stronger than a piercing pattern, but again volume fell off. But is it enough to look at the dailt volume itself and make judgements? Not always. It's obvious on these charts and the XLF chart that volume fell off into the rallies, it picked up at the deline bottoms and at the lows of the day, which ordinarily would be bearish to me, but in this case, knowing and seeing what we have seen, I think we are seeing accumulation-now out in the open, on the dips. So perhaps the daily P/V relationship isn't as meaningful as usual. The other observation would be the fact that they are now accumulating in the full view of the public, which as I mentioned last week suggests that they are ready to take this market higher and then we get reversal days in the majors. The strength in financials would also explain the relative strength in the S&P as it is more heavily weighted with financials then any of the others.

So if you are not in already how do you play this? OR if you are in, how do you play this. At this point nearly every chart I see has a positive divergence suggesting upside in the near term, so what to pick? I told you last week to use the Ultra/3x bull ETFs and to have broad market exposure through an index and exposure in financials, if you have that, then you should be fine. I like the ETFs in this situation because they are not as sensitive to individual news events and they can be heavily leveraged.

I think continued upside early in the week is a strong possibility, but do we want to use the ETFs or the individual stocks? MAPP is a strong looking chart, it has a bullish engulfing candle, rising volume, huge spikes near the close when Wall Street trades and 3C q-min suggests early upside Monday. The target is about $17.00 so that is about a 22% gain, not bad. Using the same target criteria, but this time using FAS (1 3x leveraged long on financials), I come up with 21%-the same for all intents and purposes. The only real differences (besides the 1-day target on most ETFs-which can work to your advantage occasionally) and the market specific news, would be the volume. FAS is averaging about 85,901,100 shares a day over the last 50 days. Whereas MAPP is averaging about 153,00 shares over the last 50 days. So you have to consider how big you are trading, the spread and slippage. Also I consider what market they trade in, MAPP trades over the NASDAQ-and so long as you are not using level II (unless you know every player on there and what their tricks are), I have no problems with the NASDAQ. FAS is trading on the NYSE-not my favorite exchange. Why? First because I've seen significant profits erode because I couldn't sell my profitable SKF position because the Specialist had not opened the SKF market (and it was a fast moving market that morning). Also there is the discretionary opening price which is chosen by the specialist, whereas issues trading on the NASDAQ have their opening price dictated by actual supply/demand. Does this so far sway me one way or the other? No. I point out these issues because your trading is different than mine and maybe these issues will sway you. I also have a general disgust with the NYSE, many day traders won't trade the NYSE at all due to ongoing corruption issues, at least in their opinions. These issues could include things like front-running-”Oh but times are different?” yes they are, but some things aren't.

When considering shorts, which we will be back to adding shortly, you must consider the fact that the inverse ETFs do not put money in your account that you can use as they become more profitable-you need to close them like any other long to gain access to the gains, whereas a true short on a stock will put money in your account and allow you to use it without closing the position, read my article on Trade Guild “Making More Than 100% in a Short” and you'll understand.

OK, now that you understand those issues and you know what ETFs I recommended, lets take a look at individual stocks and what I'm going to do is look at Friday's gain for all 228 Industry groups through Morningstar and choose 5 of the top performers.

Copper +5.44%

Steel and Iron +5.29%

Industrial Metal and Minerals +5.19%

REIT/Hotel/Motel (condominium...-just an inside joke) +5.06%

Aluminum +4.51%

Problem? If you have read WOWS for any amount of time exceeding 3 days you will know that I always say not to “over-diversify” as it kills returns, but more importantly not to trade any two individual issues (unless you split them as if they were 1 position) in closely correlated industries. With the exception of the REIT, we are heavily correlated so I'm choosing Industrial Metals and Minerals because there is a larger pool of securities to choose from-this is 1 group. Group 2 will be REITS, based on financials strength on Friday, I'm choosing Financial Diversified Investment for Group #3 because they are in the top 10 best performers for Friday and there are 441 securities to chose from (and yes I will look at every chart, now you know why I charge $50 a month). Group #4 will come from one of my scans, “Stocks closing up on rising volume by 5% or better” and Group 5 will be a scan that looks for stocks between $5 and $20 and have a BETA in the top 10% of the market. I'll also weed-out stocks trading less than 200,000 shares a day. These are stocks that have the highest probability of making large gains.

While I'm not going to go through my analysis for every stock, I do want you to learn, not just get stock picks. So I looked at Groups #5 “High Beta-Scan”. I took out of the watchlist anything that traded less than 200k shares Friday. I sorted the remaining 215 stocks by Beta and the top of my list was VNDA with a BETA of 7.45, which means typically or historically might be more accurate, if the broad market measured by the SP-500 were to advance 1%, VNDA would advance 7.45%. It has a high relative price movement. I looked at the chart, it traded over 600k shares on Friday-and not on big volume, more like average. It also saw a capitulation-like event on April 29^th on a huge gap down and closed down 8.84% that day on volume of 3,137,100, about a 6x volume surge. This tells me that most weak hands have been shaken out of this stock. On May 5^th a huge hammer created a second shakeout as it violated all nearby support, remaining holders are in there and prickly. The gap down on Friday re-tested the low but stayed above the low by about 2%, which is a successful retest, I don't think it needed to be shaken out anymore like the rest of the market considering recent events.....

I'm going out to dinner real quick, I'll be back with the rest of tonight's analysis and ideas, but there's something to chew on....

Ok, so Here's our charts of VNDA (click the chart for a larger view to read the notes)

Here are the support levels and capitulation I mentioned.

My Trend Channel I use for objective stops also identifies reversals in trends based on a stock's recent behavior

Long-term 1-day 3C chows accumulation at the retest of the May low

The 60 min 3C chart shows confirmation of the successful retest and accumulation

More confirmation on the 15 min chart with a different version of 3C

This one minute chart shows how reliable divergences are in calling reversals, you can see the distribution at the top in red leading to a downside move and in green accumulation that has started an upside move. Based on this chart I'd guess VNDA will show strength right our of the gate Monday so if you are interested, you may want to get in at the open with a market order.

So there's some of what I look at. VNDA seems to be a pretty nice setup, but you need to move quickly and take the early market price. You may want to scale into the position as we often do, you may pick up some shares at better levels, but there should also be a point in which the position is filled out as the trade moves in your favor. Off the top of my head, I might call that level $8.01, but be prepared for an intraday attempt to shakeout buyers at the whole number. Personally if that were to happen, based upon the evidence, I would hold through that sake out as it may add more fuel to the fire when the stock advances again above $8.00 on a mini short squeeze

The 3C charts for the market are suggesting morning weakness, that may be the time to purchase. However, do not let it close lower on you without exiting the position, at least partially.

The rest of the trades will be posted on the spread sheet, just click the link on the right of the post called "May List" There are more ETF ideas on the list below that at the very bottom of the spreadsheet.


*NOTE-REMEMBER, ALL LIMIT ORDERS ARE ON AN INTRADAY BASIS, ALL STOPS ARE ON A CLOSING BASIS.

THE OUTLOOK FOR TOMORROW BY THE CHARTS:

HERE THE SPY 1 MIN IS SHOWING WHAT APPEARS TO BE EARLY WEAKNESS, MAYBE AN ATTEMPTED SHAKEOUT THROUGH A GAP LOWER, BUT.... 

THE 5 MIN 3C CHART CLEARLY SHOWS STRENGTH, SO I'D THINK ANY EARLY WEAKNESS SHOULD REBOUND FAIRLY QUICKLY

HERE'S THE DIA 10 MIN 3C CHART, THERE IS A BIT OF A TWIGHLIGHT ZONE BETWEEN THE 5 MIN AND 10 MIN CHARTS AS THE 1-5 ARE USUALLY MARKET MAKERS/SPECIALISTS, POSITIONING AND THE 10MIN IS THE SHORTEST TIMEFRAME TO SEE INSTITUTIONAL ACTIVITY. THEREFORE WE COULD HAVE ALL POSITIVE CHARTS AND A CLOSE LOWER ON A DAY LIKE MONDAY, BUT ULTIMATELY WITH IN A DAY OR TWO, WE GET THE MOVE HIGHER. I DON'T SEE THAT AS BEING AN ISSUE TOMORROW FOR SEVERAL REASONS, ONE MONDAYS TEND TO REPEAT FRIDAYS AND TWO, TO SELL THEIR ACCUMULATED INVENTORY, THEY NEED THIS RALLY TO LLOK VERY REAL, VERY CONVINCING AFTER THE BEAT DOWN THE MARKET TOOK OVER THE LAST 6 OR 7 DAYS AND BEFORE THAT. I SUSPECT THE CHANGE IN CHARACTER I MENTIONED AND DISPLAYED CHARTS OF THAT OCCURED LAST WEEK HAS SOMETHING TO DO WITH SOME IMPENDING ANNOUNCEMENT ABOUT THE 5-MIN CIRCUIT BREAKER NEWS, I FEEL SOMETHING NEWS WORTHY IS COMING SOON THAT WILL ENCOURAGE THE BULLS, BUT THEY (THE NEWSMAKERS) KNOW SOMETHING THE REST OF US DON'T AND THAT IS WHY THERE'S A NEED FOR THE CIRCUIT BREAKERS. REMEMBER, WE VIEW THIS BOUNCE AS A TACTICAL PLAY ONLY AND OUR STRATEGIC OUTLOOK IS SOLIDLY BEARISH. IN FACT WE INTEND TO USE THIS BOUNCE TO FIRM UP OUR POSITION SHORTS. BE CAREFUL NOT TO FALL INTO THE NEWS TRAP-WHATEVER IT IS, WHATEVER THIS RALLY BRINGS, WILL BE CONVINCING!


For our new members, we have a lot recently, please, please, please-read everything on Trade-guild.net regarding risk management, "Position sizing", "The 2% Rule/Video" etc. You NEVER want to take more then a 2% loss on any position and if you trade multiple positions you want to divide them up so that any losses do not exceed 2%. Don't make your initial stops too tight, don't move your stop away from the winning trade in a losing situation and don't hesitate to execute the stop on a CLOSING BASIS. Also, I never out more than 15% of my portfolio in any one position and often less-that's the only way to protect against gaps. Keep your risk management solid and you will make money, falter even once and you could lose a lot.  Always RISK MANAGEMENT FIRST, ALWAYS!


HAVE A GREAT WEEK

Be Ready, Be Brave, Be Smart

As usual, check tonight's extensive post at Trade Guild.net, it will give you the confidence you will need. If you did what I mentioned last night and accumulated positions in the Ultra longs and 3X Bull ETFs you did the right thing today, so long as you followed risk management plans. Tomorrow, if we break below $105, I'd add maybe 25% when prices move back above $105. If we don't make it that low, then you'll want to do one of two things, (first you may want to take any profits off the table in shorts or some any way for the time), you will either want to add a little on lower prices, and then add the rest as we break above the trend channel reversal point at $110 on the SPY as of now. Like I said in the TG post, if the market moves lower, so will the trend channel and our level at which we have a reversal (which is at $110 now). This is why it is very beneficial to you to have these indicators for yourself on a realtime basis. I have written them for both TeleChart and Stockfinder, the links to each are at the top of this site on tabs. If you sign up, tell them Trade Guild sent you, email me and Ill set you up with the code.

So the idea is we want to have accumulated at lower prices (that should have happened today) and that represent half of our intended position and then we want to add the rest upon confirmation of the reversal. To draw in buyers, Wall Street will have to make this rally look really, REALLY convincing, that means it will rocket up and traders will have this sinking feeling that they were left behind. So that is why I suggested being in early. I suggests adding at the reversal to mitigate risk. We add as they trade moves in our favor. If for some reason all of this analysis is wrong and you'll know that if price moves significantly below $105 then you'll ant to be out quickly. I saw this because the stop/limit orders are sure to be piled up below $105, it will only take a move to $104.75 to hit 90% of them and they don't want to take this market that far down if they need to turn around and take it back up, they just need to hit the stops under or at $1o5.

By the charts look and feel, I think they don't need the $105 shake out, I think they are close to being ready now and Friday makes a good day to put in a strong rally.

If you have core shorts, it's still ok to hold them, although we did take some off the table in larger positions, we will add them back later. Either way you should be in good shape if you do have the core shorts, a failed rally and you are hedged with the shorts. A good rally and you will gain on the longs and only have temporary drawdown on the shorts as the longs have hedged them and the outlook for the long term is down to new lows so that just makes the long trade an extra bit of profit and another chance to load up the shorts at better pricing.

Tomorrow is going to be a key day, you will want to watch the market as this rally could come Friday and it could blow through $110 in minutes.

Look for updates-subscribe to email updates at Trade-Guild or just check. I'll probably post something pre-market, but the trades are the same ones I've had listed, the ETF's that are 2-3x leveraged and you only need 2-3. I'd choose a good 3X financial and something leveraged on the Q's or Russell, so you have financial and broad market exposure. There's no need for a bunch of positions on this trade.

As always, email me with any questions and happy profit hunting. DON'T FORGET YOUR RISK MANAGEMENT PLAN!!!!!!

$109.41 was the shakeout level

Pre-market we have already hit it.

Use the long ETFs I gave you Sunday on, I'd consider strongly accumulating half a position under or around $109.41, and the rest either as we move lower, but in smaller bits the lower we go, or the other 50% when we pass $112 or 112.90 for the very cautious. YOU MUST use risk management-and position sizing, so get calculating-QUICKLY!

A Lesson in What Smart Money Can Do

YOU MUST READ AND LOOK AT THE CHARTS AND THEIR ANNOTATIONS AT TRADE GUILD TONIGHT, HERE'S THE POST


http://www.trade-guild.net/2010/05/today-smart-money-took-drastic-action.html


Something rather amazing happened today and if you look at the charts and understand divergence analysis or my 3C indicator, you will see with your own eyes that smart money has been pulling this market down the last few days, even though it originally appeared that they had the intent of a bump up in price along the order that we anticipated.

SOMETHING CHANGED and probably over the weekend. Smart money pushed the market lower and between 11:30 and 2:30 today-which includes a significant portion of the lows, they accumulated en massse . I do not think I have ever seen such an impressive shift in the longer 3C charts (15-60 minutes) so quickly and so obviously, it was very distinct and confirmed on all 3 major averages and all 3 independently written 3C indicators. You will be surprised to see that the accumulation occurred during light volume, except for a spike or two, but that is exactly why accumulation is so difficult to see, they don't show their hand and say "We Are Buying!" as that would drive up price, instead accumulation almost always happens on low volatility and low volume as we saw during the period we are interested in.

This chart is just for you, I did not post it at Trade Guild, but you can see at the lows of the day, 3C 1-min went into a huge upside divergence-positive accumulation-Amazing

You can see where price was heading lower before 12 pm today and 3C (blue) was already in motion higher and peaked with a leading divergence around 12:30. As prices climbed, their accumulation activity waned. They were in for the cheap shares, which may indicate that the move, while possibly fast to the upside (so you may want to get long exposure soon) may not carry further then our targets around $116.00 (SPY)

So what does this mean? It means that as of now, it seems that either they were covering a lot of shorts and or buying. Of course the two actions are one in the same, either way the intention would be to be ready for a move higher. This move could be as short lived and reverse as quickly as it did today in two hours, or we could see the pendulum swing hard in the other direction.

This is a trick time, in technical analysis all we can see is what they are doing, we don't know why and won't until it doesn't matter anymore so there's no point in trying to reason the actions taken this week and especially today. I was shocked to see what I saw as I went from chart to chart and confirmed with all 3 versions of 3C.

So there are many possibilities, I tend to be skeptical and a bit paranoid which is good for a trader so I'm concerned that they will make an effort to move this market below the two closest support levels at $109.41 and $105 on the SPY (add a zero to see the levels for the S&P-500).

So we have the trades that are most useful right now-those would be the longs, ultra and 3x leveraged long ETFs I've listed the past few days. Those are the trading vehicles I'd use for the time being. The question is when to buy. A break below either support level would be a gift and you'd be a buyer as soon as prices rose back above those levels. Or they could have all the inventory they need now and take prices up now with an obvious Doji reversal signal it is what most traders are expecting anyway, which helps them mark-up prices.

You'll have to choose your plan. You could, if you haven't already, accumulate portions of your intended position so if there is a break below support you don't have huge exposure and you have dry powder to load up the truck. You could wait for a pullback or for a move up or you could sit this one out. I have a feeling you'll need to be nimble toward the top of the move.

In any case, choose your stops before you enter the trade, do not make them so tight that you are easily stopped out and make sure that you position size accordingly so that you don't risk more then 1-3% on any single trade or for more conservative traders, on the portfolio.

The bottom line is at some point, probably very soon (day/days) we will see a move up unless something drastic happens to shift sentiment again, which I can't see at this point with the level of planned accumulation.

As usual, if you have questions, please feel free to email me.

Battle Plan

Everyone needs a plan, here's a few ideas, but first read the analysis at Trade-Guild.net tonight.

If we see a breakout above $112.80/$113 on the SPY, then the longs I gave you the last two days are quite workable. There is a high chance of a false breakout below $112/$111.75. If that were to happen and then we see a move back above those levels, especially on volume, we have another workable long setup. You can sit in cash right now too, but we do have a strong 10 minute divergence, but it may be destroyed as the 1 and 5 minute divergences from yesterday were, remember I said this market is susceptible to news and news is what caused the breakdown today, however it seems that there are institutions with positions at higher levels and I'd think they'll want to see the market move up to unload them. 10 minute divergences are also stronger then 1-5 minute divergences and the 10 minute positive divergences have been strong today.

If we get a break of the hammer at $111.75 (SPY), you'll want to look at the shorts I listed in May-there are two lists, both to the right of this post and I'll add more once we see what is what-you are not going to miss the train with all the downside we have below.

The triangle that formed at the end of the day will be an upside breakout at $112.80-that is worth adding to longs or establishing partial positions which you add to as the market moves higher, but I never expected more then a few days of upside so these longs are quick trades. No matter what you do, you must follow the risk management rules. There's no excuse (other then a bad gap ) to lose more then 2% of your portfolio on any bad trade. If you are losing more then that, you need to email me and we need to work out a risk management plan.

Ultimately, most of you should be holding core short positions, remember the longs were just for a bounce trade. So in any case, you should be somewhat hedged. If the longs work out , you'll make money and set up great shorts, if they don't you'll be hedged, you'll close them and the shorts will be profitable. Just review all the trade options I laid out and be ready to execute them on a break either way. I can see adding to shorts below $111.50 on the SPY.

Bottom line, with the information we have right now, I still expect upside, intraday there's a lot of false moves so follow your risk management plan, but don't jump out of positions that have no reason to be out of if they haven't hit your stop levels (don't react to emotions). In other words a downside breakout of support is a high probability and a move up after that is also a high probability, you don't want to sell at the low unless your risk management plan dictates that in the position sizing you choose.

To me a gap down means nothing, just as the gap up today meant nothing except (as I pointed out in my posts) it was an opportunity to sell some longs at a profit. The market will do everything to fool you and scare you out of trades, don't fall for it. Volume is always a good indication of how real the move is. I'll try to update in the morning on TG and again in the afternoon. Whatever happens, think risk management and remember, the longs are tactical, the shorts are strategic as I believe ultimately this market is going much lower.

Finally, CASH IS A POSITION, if you are not feeling good about these longs and want to wait for the shorts to hit, then be in some cash.

Email me with any specific questions or and especially if your risk management plan is costing you more then 1-2% of your portfolio on any failed trades. Be sure to look for my updates on TG, and check WOWS too if something serious breaks I'll be updating here.

ADDING A COUPLE ULTRA/3X LONG

THE MARKET IS SET TO GAP UP, I'D SAY IF YOU ARE ESTABLISHING A NEW POSITION, PICK UP 50% OR SO OF THE INTENDED SIZE ON THE OPEN, WAIT AND SEE IF THERE'S AN EARLY MORNING PULLBACK AND THEN ADD THE OTHER 50 AFTER THE PULLBACK MAKES IT'S FIRST HIGHER HIGH/HIGHER LOW ON A 1-MIN CHART. HERE ARE 3 ADDITIONAL LONGS YOU MAY WANT TO LOOK AT. DO NOT LET THE GAP UP DISSUADE YOU FROM ENTERING THE MARKET. IF YOU ARE PRETTY MUCH SET WITH YOUR POSITIONS, THEN MAYBE ONLY ADD ON THE PULLBACK SCENARIO.


TRY NOT TO OVER CORRELATE-FOR INSTANCE, YOU DON'T WANT TO BE IN BOTH THE RUSSELL AND THE QQQQ OR UYG AND SKF (BOTH FINANCIALS).


ERX
DRN
URTY
UWM

Yes, Bears Can Bounce

As usual, make sure you read tonight's Trade-Guild post. If you did what I said last night and followed the updates, you should be sitting on some decent long positions and should see at least a day if not two of additional upside. Today was really just a reversal day-my note on TG about the support level being hit gave you a great opportunity to add at even better prices.

For now we will not be adding to shorts, there's no point as long as we have a bounce because we can get better pricing at higher levels, but I imagine before the week is out, we will be adding to shorts and you will hopefully have made a nice little profit in the long trades we re in now-IT's not too late to get in! There should be early weakness that can be used to enter the trades. Whatever happens, DO NOT LET A WINNING TRADE TURN INTO A LOSS!

The fact that the SEC will be coming out with a report in the next few days about "Circuit Breakers" on trading platforms (meaning if a stock drops by 10% in 5 minutes, trading will be halted in that issue for 5 minutes) is probably what is propelling this market higher, however it underscores a fear that the SEC has about the waterfall sell-off that 3C predicted last week and that was just the start. I think the SEC has some information about the direction of this market and is putting panic plans in place, which is great for our short positions, it means we ARE on the right side of the market.

DO NOT BE COMPLACENT with these long trades, Europe is falling apart and it won't take much to spook the US markets, news can change things fast, but for now we seem to be ok.

I see numerous long trades, they all look like the market, since they are sensitive to individual news items, I choose the Ultra and 3x ETFs in last night's post as your long trading vehicles, I see no reason to change that plan as I don't see any particular stock outperforming these leveraged ETFs. So, keep an eye on Trade Guild, do not panic and sell too soon, unless the market spooks badly on news, even a gap down in the a.m. should not run you out of your long trade-I expect we may see just that.

If you have TeleChart of StockFinder, you can use my TrendChanel for stops. If you don't have the platforms, please visit Trade-Guild and use my links as I'm an affiliate and it wont cost you a dime more. I'm more then happy to share my custom indicators with you. You can also use the StockFinder and TeleChart tabs at the top of WOWS.

Hang in there, we are on track, don't let emotions govern your decisions.

Can Bears Really Bounce?

YES! And we are about to see one bounce. See tonight's post at Trade Guild. I expect the $116 level of the SPY to be tested and it should fail, news could derail this of course but as far as what we know now, it looks like a day maybe two of upside coming. Watch the volume, it should stay low. You can trade around this a little pretty easily using an Ultra Long like QLD, UWM, UDOW, DDM, FAS, EDC, TNA, MWL, BGU, or SOXL.

I would not let go of short personally, but rather hedge with these Ultra or 3x long positions for a day or two. Any gift -10% I'd take. This way you are hedged to some degree, you get to add to shorts at a higher level and then when we go back down you've made profit on the long trade (quickie) as well as the higher -add-to shorts. IT's a pretty nice opportunity and I don't see anything on the charts to suggest this is anything more then an attempt to fill the gap and maybe kiss the bear flag good bye-which is typical.

I'd say go for it, but treat this trade as any other and make sure your risk management schedule, position sizing, etc are all in place, do not try to hedge an entire portfolio and I wouldn't trade more then two of these. REMEMBER, THIS IS JUST A PLAY ON A SHORT BOUNCE-unless something develops from there which I doubt.

I'm not putting these on the spread sheet as they are so short.

Have a great week.

THIS MARKET IS LOOKING WORSE EVERYDAY

Because of the above, I'm accelerating some of the trades from yesterday and putting a few at market and a few closer to trigger levels. I have also added a lot of ETF's that are Ultras, you'll want to look at those and have some exposure to them in different industries, ETFs have some advantages-like they are not as news sensitive as a stock and the Ultras have the advantage of leverage. However, an Ultrashort which you buy is not the same as a true short. A true short wil add money to your account as it becomes profitable and a portion of that money can be used right away to finance or add to other trades, this can not be done with a long position.

The stops are a bit further so in risk management that means you need to take on less shares-Read at TG about position sizing and the 2% rule. You can always add to the trade later so for now, get exposure but don't swing for the fences. Also look back at the last list, the trades listed in late may are also worth considering.

Risk management is the name of the game right now, even if this market moves higher for a short period we can still make a lot of money but you must follow the rules. If you have ant trade or portfolio specific questions, be sure to email me. I want to see you make money and if I can answer a question and help you do that then by all means, send me the email and I'll answer ASAP.

Do not correlate positions, do not put more than 15% in any one trade and for now do not take full positions but 50% or so of your intended position and make sure you position size so your risk on a failed trade is under 2%. Also do not over diversify, for most people's portfolios 6-8 positions will give you all the exposure you need. As a rule of thumb, $10k =3 positions, $20k maybe up to 5 positions, $100k 6-8 positions. If you are over that level I can help you diversify without over diversifying which kills returns, it's a wall street myth designed to increase brokers commissions . THERE IS NO SAFE TRADE, WHENEVER YOUR MONEY IS IN THE MARKET IT IS AT RISK SO MAKE THE MOST OF IT!!!

CHECK TRADE-GUILD INTRADAY FOR UPDATES ON THE MARKET

A TRADE FOR ALL SEASONS

WEDNESDAY WAS THE FIRST DAY IN NEARLY 3 WEEKS THAT I HAD THE MARKET DIRECTION WRONG, EVERY OTHER DAY 3C CALLED IT EXACTLY. I STILL SEE A NEGATIVE DIVERGENCE AND I'M STILL STICKING WITH DOWNSIDE TOMORROW, I HAVE TO TRUST MY INDICATOR EVEN IF IT'S WRONG ONCE IN AWHILE.

GIVEN THE UNCERTAINTY SURROUNDING THE VOLATILITY OF A TOP, TONIGHT I LISTED A LOT OF LIMIT ORDER TRADES THAT HAVE THE ADVANTAGE OF PUTTING YOU IN THE TRADE AT A HIGH PROBABILITY/LOW RISK SCENARIO. THERE ARE TRADES FOR IF THE MARKET GOES UP AND IF THE MARKET GOES DOWN. THERE ARE A FEW THAT ARE READY TO BE TRADED TOMORROW MORNING AT THE MARKET OPEN AND WE TRADE THOSE AT MARKET PRICE.

I THINK THIS IS THE BEST ANSWER FOR NOW.

PLEASE READ AND REVIEW THE PLAN FOR ZSL AS THAT TRADE STILL APPEARS TO BE UNDER CONSIDERABLE DISTRIBUTION. BECAUSE A TRADE DOESN'T WORK OUT THE FIRST TIME IT DOESN'T MEAN YOU ABANDON IT.

SHOULD YOU HAVE QUESTIONS, EMAIL ME AND BE CAREFUL WITH CORRELATION, THE FIRST 6 OR SO TRADES ARE ALL IN THE SAME INDUSTRY.

GOOD LUCK AND DONT FORGET TO CHECKOUT TRADE GUILD'S CONSIDERABLE ANALYSIS TONIGHT.