Can’t beat ‘em? Join ‘em….

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In case you didn’t notice, the NASDAQ broke below an almost three month uptrend today on pretty big volume. That along with the DJIA being rejected at its trend line last Tuesday (among a few other variables) makes me think we just might fall to pieces here. Expect some sort of bounce, of course, but recognize it for what it really is: an opportunity to short into. As always, stay nimble and don’t overstay your welcome in any trade.

So for short ideas here are the two I’ll be working with tomorrow morning:

PNRA: We’re going to retest those January lows, about that I have no doubt; if those don’t hold, say hello to the ‘02 lows; and if those don’t hold -well, needless to say, I’m making this one count.

-Cut losses: 47.38 (20dma); 47.89 (HOD today); 48.02 (40wma); 48.32 (200dma); and the final a close above 49.63 (50dma)

STJ: Low-risk, being so close to the 200dma, a moving average that it appears trapped under…today’s high volume reversal is just what I was waiting for.

-Cut losses: 38.86 (200dma); 39.55 (HOD); 39.94 (40wma)

One that I wanted but passed on:
AAP: I’d be shorting this for sure but for one thing: it announces earnings after the close tomorrow.
-Cut losses: 32.41 (50dma); 32.70 (10wma); 32.80 (HOD)

Be robotic and ruthless with these cut-losses. Don’t be asked twice to leave the party. Keep any and all losses small. I’m fully expecting these stocks to crater at least 50%. Still, be wise with the money management. Demand immediate weakness and don’t hold your breath under water too long. Don’t chase any short beyond 5% of the first cut-loss. Love the game. Don’t be greedy.

John Ward