Positive Open
    Wiping the sleep from my eyes, markets are looking to continue their positive momentum. Europe and Asia are performing nicely. This has led to strength in the futures that should carry into our markets. With four trading days left in the year, we should have a decent year-end rally. Currently, the indices are down for the quarter. I would not be shocked to see the next four days push us into positive territory.
    For the remainder of the week, I will trade this market long. I expect to see a 2-4% rally in the coming days. Harvesting gains in this environment could add a nice profit to your portfolio. My only concern is volume should be light and liquidity limited. Avoid carrying any positions on your balance sheet and be sure to have all positions closed by end of day. Carrying positions through low liquidity could lead to a poor start in 2008.
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I have a belief that the Santa Clause Rally may not be as powerful as it used to be!
We need to be vary of the unfinished subprime fear among the Traders and Retailers.
Alfred Chew
Sean what sectors are your primarily going to focus on for the remaining days?
I’m done for the year. I’m up 16% for the year, I’m content. Good luck with these next couple of days.
Not sector specific. I like AAPL, DRYS and BIDU long from here. I am shorting RIMM against AAPL as a hedge and would short DRYS if it closes below 70. With BIDU, use stops/limits and go for 3 pt swings
Sean,
I agree that the rest of this week looks like a time to be long. I also agree that the beginning of next year doesn’t look nearly as positive. Out by the end of the week looks like the strategy.
I’ll be in Mexico for the remainder of the year, so my short-term positions are closed for now. Sean, why do you feel that shorting RIMM at this point would be a good idea?
Rimm rationale as follows:
Despite a large rally after their earnings report, RIMM never overtook its prior high. Therefore, we never saw it flash buy in my timing model. I am viewing this as a bearish non-confirmation. Earlier today (12/26), RIMM appeared to be in the process of breaking down. I initiated a large short position. After that, the stock rallied and I am currently underwater on this trade. However, I still view the failure to make new highs off positive earnings as bearish and think this trade will work. Stop loss at $121. Downside target of $107.
RIMM has definitely been range bound since it popped, but it did take out the downtrend line established by the November high and the early December (lower) high, and looks to me like the 50 day will act as support. Over approx 1 year period the 50 day looks like it’s played a pretty important role as support. Good luck on the trade.