After Market Close March 11, 2008

BOOM!

The market was primed and had been fueled for some time. All it needed was for something to spark ignition. The Fed did (and their action, though poorly understood) is huge, make no mistake) and BOOM! The market exploded higher. This is why we urged being constructive in here. At this point, we have to think more is coming.

DJIA: The Dow could break out of the channel on another day like today.


SPX:  The S&P is still in a down trend, but this type of action is not to be ignored.


NDX: The Nasdaq ought to lead. There are a TON of folks heavily short here. They're fighting the last battle. This isn't 20001. Tech's weren't overdone to begin with.


RUT: The Russell even looks like it may have completed a correction. I'm still a long term Bear here, but near term, I'd not short this index. This is where a squeeze can hurt.


HUI: The Miners were up but I think that the game has changed. If I'm right, strength here ought to be sold.


SRVY: Greenfield Online was up, but not much considering.


SBUX: Starbucks is gone and that's fine. We were short for a market decline. The market rallied and we covered at break even. Cheap insurance.


NPO: Enpro broke up and ran. Looking good.


CEPH: I'm a bit concerned about the short in Cephalon, but strength is not confirmed.


EL: Estee Lauder took off.


CSCO: We're long Cisco and this should be a good holding. Investors, might want to buy a dip if we get one.


PBH: Prestige Brands broke up.


HST: HST broke up and got us. It was a bit extended but the strength is not to be ignored.


CKP: Checkpoint did not open at 25.42. That appears to be a bad data point. We're long.


KOF: Mexi-Coke got us in and looks good, too.


EHTH: EHealth acted funny. Let's pass on the longs and maybe even play the short side.


JOE: St. Joe still looks interesting.


HAR: Harman still looks good so let's just make it prove it to us a bit more before we buy.


FE: First Energy looks like a buy on strength here.


QSII: Quality Systems is acting sick and rally or no, that could be a good short.


Summary:

The indicators haven't turned, but the sentiment says that we have tons of upside yet. Yes, we're still technically in a Bear market, and that must be respected, but every Bull market begins when we're technically in a Bear market. Yesterday's action is a break from the old Bear patterns so we need to be as constructive as we can conservatively allow. We want to see better breadth and good volume on any further rally.

Be Well, and Trade Smarter Than the Average Bear!
-The ChartSmarts Team


Current Positions:

Short 25% SRVY at 13.04, stop at 12.59

Long 50% NPO at 31.04, stop at 29.59

Short 25% CEPH at 59.53, stop at 63.36

Long 50% EL at 44.23, stop at 42.47

Long 25% CSCO at 25.04, stop at 22.91

Long 25% PBH at 8.19, stop at 7.51

Long 25% HST at 17.21, stop at 15.93

Long 25% CKP at 25.21, stop at 23.22

Long 25% KOF at 56.42, stop at 51.91

Watch List:

JOE: Buy 25% on a print of 39.67, stop at 36.49

HAR: Buy 25% on a print of 44.53, stop at 40.96

FE: Buy 35% on a print of 70.57, stop at 66.88

QSII: Short 25% on a print of 30.46, stop at 33.04

Changes in Current Positions:

We are stopped out of SBUX at breakeven 17.67

We are now 25% long CSCO at 25.04

We are now 25% long PBH at 8.19

We are now 25% long HST at 17.21

We are now 25% long CKP at 25.21

We are now 25% long KOF at 56.42


*30 Minute Trading Rule:

In order to prevent whipsaws, we use a 30 minute trading rule. This means that, as a general rule, we are going to "sit on our hands" during the first 30 minutes of trading,   this includes the lifting of stops during this 30 minute period as well. Additionally, if after the first 30 minutes of trading the range of the stock pick is within the stop and buy/short boundaries presented, the trade recommendation is valid. If the stock's range is outside of the buy/short and stop boundary, the trade recommendation is VOID. E.g. if the recommendation is "Buy a print of 10.25, with a stop of 9.95," and the stop trades up to 10.50 during the first 30 minutes, we would pass on the trade. Similarly, if that stock were to trade down to 9.90 before 10:00, the trade would also be void.

There is no 30mn rule on limit orders, but if price gaps out of the buy/stop range the trade is void.

Rule on stops:
As a general rule for the model portfolio, we will lift all stops on existing positions for the first 30 minutes of trading. As a practical matter, subscribers may wish to leave their stops in place if they expect to be incommunicado or unavailable during that time to monitor positions.
Past Performance is not a guarantee of future returns.



Trading is risky. Trading entails unique risks, so get with your broker and do your homework before you take any trades based upon this or any model, newsletter, or trading service. Never trade with money that is necessary to your near- or long-term financial well-being.

None of the ChartSmarts™ Newsletters should be construed as a solicitation to buy or sell any security or commodity. We aren't your advisor and we aren't your broker. Any decisions you make are yours alone.

Though we do keep a hypothetical valued account track record, none of the performance referred to should be construed to be that of an actual account. Performance is not based upon back testing, and it does not represent an actual trading account unless explicitly stated. From time to time, we'll be trading the same ideas that we're discussing here. We make every effort to insure that we and our associates not "front-run" subscribers, or to otherwise affect the price of securities that we hold or discuss. Be aware that sometimes we, or our clients, family, or associates, will hold the same securities that we discuss in ChartSmarts. Occasionally, our trading actions may not be the same as those discussed in ChartSmarts, for a variety of reasons. We will never attempt to manipulate the price of any stock for any reason.
ChartSmarts (the "Newsletter') is protected by federal and international copyright laws. Equity Guardian Group, LLC., publisher of the Newsletter and owner of all rights therein, retains all proprietary rights to the Newsletter. Equity Guardian Group, LLC. hereby grants you, as a subscriber, the limited right and license to this issue. All recipients must receive the Newsletter directly from ChartSmarts.com. The Newsletter may not be forwarded or copied without the prior written permission of Equity Guardian Group, LLC.