Today's Ideas:

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    Sunday, April 20, 2008

    Sunday preparation

    It's my opinion that we're very close to seeing a tradeable top in financials and real estate stocks. If we've seen the final bottom in stocks, I don't know, but a very nice risk/reward setup is close at hand. I plan to take full advantage this week. For the record, I am not opposed to paying up for SRS and SKF it that is what the situation calls for. It's direction, not price, that is most important. Friday showed a bit of divergence already, in that SRS was able to rally and close near the highs (real estate stocks closed near the lows). I'll look for a window to step into these two vehicles before mid-week. It would not be entirely surprising to see the manipulators pull some strings before then, so I am flat stocks currently. I'll be sure to post trades immediately (including size), with price and time.

    Regarding commodities, I'll have to keep an eye out on the WEAT etf and Wheat futures. They closed Friday very weak on news of ample rains. I don't trade news, but I DO trade out at my stops levels if they get hit. Stay tuned and we'll see if any action is necessary. Keep in mind that a stop out, if it should occur, does not change the long argument in the commodities sector. The trend is intact until the moving averages change direction, and that is the path of least resistance. I respect moving averages, as I don't like swimming upstream. This same rationale can be used for NOT trying to pick bottoms in financial stocks. It's simple too risky to sit in a pool that's drying up, waiting for a "blessing" or some outside news event to change the weather. Pick easier targets to prey on. After all, we're hunting for profits, correct?

    Lastly, this article exemplifies why I'm not "heavy" into positions over the weekend, unless I have a big profit cushion. The crooks will do whatever they can to inflate assets, but ultimately it cannot change the natural course. Pick your spots carefully, but in the context of the bigger picture!



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