Some Ideas to Gnaw On
A pretty ho-hum day on the market today, but that's no big surprise. A look at the past few years of the S&P 500 indicates there's ample room on the downside still, even within the confines of the ascending wedge pattern. The Fibonacci retracement levels aren't really worth considering at this stage, since we're still in the uncertain zone.
I've got a few short recommendations to consider. The first is CSX, which is a Transports component. This is sky-high and seems to have lost steam. This is optionable and, to my way of thinking, presents a very positive risk to reward ratio. 
As cruel as Hansen Natural has been to us poor bears, I can't resist suggesting it - - this one is just insane, folks. Bananas. Late 90s style "this time it's different" Internet mania. Tulip country. You get the idea. Put in a stop at $202. (And could someone please explain to me why there are no options on this one? Please?)
A tip of the paw to buddy Michael Kahn for suggesting Marvel Technology (MRVL) a few days ago in his own column. This looks like a beauty. It's also been clobbered the past couple of days.
Union Pacific (UNP) looks awfully toppy too. This one to me seems a slam-dunk.
Lastly, in the same spirit as my Time Warner question last week - - - could someone tell me who trades Sun? And why? This has been about a $4.50 stock for years, and trades ten million shares a day. Someone responded to my TWX question by suggesting it was for capital preservation. Excuse me? I can introduce you to some good certificates of deposit that are safe and throw off similar gains (better, actually). So what's the deal?
2 comments:
I have a question about how long you hold your shorts (or how long you hold the puts if you buy them) as your short list seemed to change a fair amount between posting your lists.
Do you plan to hold for a longer period waiting for a large drop/retracement? or you play until a resistance line or some other factor is hit; get out; then re-enter later?
Tim:
One other question... I've looked at various longer term shorting strategies and they often talk about shorting when things break under a 30 week or 200 day moving average. Obviously you lose some of the initial short but many percieve this "safer." You obviously like to jump in it seems as stocks top rather than after a topping pattern has been established. Can you comment on why that is from your perspective?
Thanks
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