What I did last week

This is a market where I think you have to be happy with 5% in a position and you have to be willing to take profits instantly.

I got two big things right - the overbought condition and gold's trendline resistance.

On the first thesis, I took an additional 300 DXD with a 54 handle. I took it down into the gap Wednesday at 61 and change.

I had on 300 FXP on with a basis of 32.47. I sold 200 into the gap on Wednesday at 45.25.

So that left me imbalanced a little on the long side. I took 200 SRS at 59.50. Whenever I put out a lowball limit order that gets hit, it always makes me doubt that I really want the position. We'll see... expecting a bunch of retail BKs to lean on CRE. CRE isn't really TARP-able... bankruptcy there isn't systemic, it just transfers ownership to the bondholders.

AGT is playing really well. Just playing for pocket change, took another 20K at .18, flipped him at .24. It doesn't matter how big the trade is, the important thing is to trade it properly and have a winner. He's making a nice little pennant here between .18 and .24.

So, right now, I have 20K of AGT on with a basis of .18. 5000 NXG with a basis of .65, he looks like he's having trouble at that important 1.00 resistance. Chart looks very wedge-y to me. Give him one more chance to crack it from this oversold market, then turn him loose.

Gold generally doesn't excite me. The bear case is, you still have the same issue with that downtrend line around 850. Bull case, well, that's a stretch... if it recovered to 900, you could squint and make that a raggedy H&S with a target of 1100.

Not thrilled by the charts in any of the stronger groups. The one I'm smacking myself over is missing the move in MO off that 15 level, especially when it's sitting right there on my screens.

One thing I am noticing, even though the charts are raggedy, water stocks seem to show outperformance every time we come off a low. But, the big ETF PHO looks like shit because it's so weighted in GE.

MeanGene did a good piece of work on the long-term picture for silver, which everyone should read: http://upstarttrader.blogspot.com/2009/01/silver.html

All 3 indices back to oversold and turning up with oscillator buy signals in that reversal on Thursday... man, that happened quickly.

The S&P held and finished right at the pivot at 850. Therefore, my inclination here is to lean a little long. I'm 55% cash, 25% long, 20% short.