Session of 03/15/2007

[David Randolph]

Good morning

I'll be busy changing positions around the open, but I'm looking for suggestions to cover today. Just two because I still have CHINA from yesterday, let's see if I can get on track. We'll run a poll with all suggestions (feel free to post several) at 10:30 AM, ET.

Also, feel free to post about other topics, the general market or strategies, for example.

Have a nice day

[nullzero]

I think there is way more downside, covering the shorts now would give up a chance at more profit. The PPI numbers came in much higher then expected and the market will react negative to it. I also believe your first assement is correct on the market and the way things are heading. Global market or not the U.S. goes into recession the whole market will suffer greatly.

[nullzero]

BTW david whats your take on CSH?

[AussieTrader]

Another Solar play FSLR:

First Solar, Inc., incorporated on February 22, 2006, designs and manufactures solar modules using a thin film semiconductor technology. The Company's solar modules employ a thin layer of cadmium telluride (CdTe) semiconductor material to convert sunlight into electricity. The Company's manufacturing process transforms a 2 feet x 4 feet sheet of glass into a complete solar module in less than three hours, using approximately 1% of the semiconductor material used to produce crystalline silicon solar modules.

[masternic35]

Hi David,

Do you have an update on ICE since the announced merger with BOT this morning ?

Thx

Niko

[Windsurfer]

Free Newsletter for what it is worth:

This week is quadruple witching week, which is something you need to be aware of. It happens four times a year on the 3rd Friday of March, June, September, and December (the month at the end of each quarter). Four different types of derivatives related to stocks expire: stock index futures, stock index options, stock options, and single stock futures all expire. You can even mark these weeks on your calendar.

These witching weeks are often very volatile, so remember this as a trader.

Also, we need to take profits on the UltraShort S&P500 ProShares (SDS) and UltraShort Dow30 ProShares (DXD) which were some free picks I sent out a few weeks ago because I was very concerned about a downside in the markets, and I wanted to protect even my free newsletter subscribers from this.

Right now, the S&P 500 index just bounced exactly right off its upward trendline, which to me wouldn't be a problem, except I never like it when stocks fall from such high levels so fast. It may not look like it hit the trend on this picture, but in my own proprietary charts at home, it did indeed touch a short term trendline.

                         

Sure, small pullbacks along the way are great, and it keeps a stock moving upward at a nice pace, but when this happens, it means stocks have fallen onto sell signals (moving below previous support levels), so even when they rally, it only usually means the rally will be sold into (assuming you are even in).

So, I am not bullish by any means. In fact, I am never a bull or a bear. I just like to do what's working at the time. It's fantastic that these inverse ETF's are now available to make money in down markets without having to short an index. In fact these give double the move. For example, if the Dow is down 2%, we're up 4%.

It may take some more rallying for some more selling pressure to come in, but when stocks hit an intermediate term bottom like mid-day Wednesday, you never want to just be short because your "longer-term objective" is lower. It's okay to be short for a while like we were (well we were LONG a SHORT fund, so technically we were short the market even though we BOUGHT these ETF's) but you never want to be in the way of the bulls, even if the bulls are only out for a short run.

Good Trading,

Stocks and Options: http://www.traderreview.com

[David Randolph]

Hi David,

Do you have an update on ICE since the announced merger with BOT this morning ?

Thx

Niko

Yes, I wrote one right after the news was released, only for paying members, sorry.

[David Randolph]

I think there is way more downside, covering the shorts now would give up a chance at more profit. The PPI numbers came in much higher then expected and the market will react negative to it. I also believe your first assement is correct on the market and the way things are heading. Global market or not the U.S. goes into recession the whole market will suffer greatly.

I respect your opinion nullzero, and I know how right you were on those subprime lenders, I wish you good luck nullzero (but you can spice up your portfolio with some powerful small cap momentum+value plays )

[David Randolph]

BTW david whats your take on CSH?

I see demand for that company's services rising. It looks like a nice pick on a superficial view. Will put it out on the poll.

[David Randolph]

The question is: should we spend time and effort looking for short picks?

The more I think of the long term the more I see the long term return on a short sale is lousy, even if one is right on direction.

I prefer to spend time looking for sound long term investments, in good or bad economic times. Because of the compounding effect of an investment.

Have a nice day

[WallStreetnBio]

I sold my CFC puts at the open and bought some calls. There are a ton of shorts on CFC and Fast Money said it was a buy so I expect it to squeeze hard at least 10%. The risk doctor said if it goes up a dollar it could jump to 45 real quick and I think he is right. I'll be back short after the squeeze is over.

[n1notesguy]

Hello David,

I would be curious as to your take on:

SFE

SLP

and

getting back into OFI at this point.

Thank you.

Ken

[ygtrdr]

David, I think these rallies that we're seeing are purely technical for now. How long will they continue? April? May? I don't know but I do think we will see another big down leg before this bull resumes.

[ygtrdr]

Also, I would like your opinion on buying back XING for the main. You stated your opinion on preferred shares has changed since you last sold and I think that XING is a great investment for '07 and '08. Thanks.

[HomeBound]

Prodigykid, I would not hope for 45 any time sun. 37-38 range would be nice for short/put entry again. LEND is fast approaching put entry again.
Good luck