Monday, 5 March 2007

I have figured to put together a quick watchlist from the highly coveted IBD eTables (you only got tomorrow to try 'em out, if you are not a subscriber), for this correction and my 'turn to trade template. The main scanning criteria run on the IBD 100, IBD New America and IBD Bigcap 20 indices entries were:

• Closing price: should be above $50
• 52 highs: should be no more than 10% off its NH
• Of course optionable
• Not on my Cooperian watchlist yet

My findings: TSO (Tesoro, oil), PCAR (Paccar Inc., trucks), FDS (Factsetresearch, financial), TIN (Temple inland, packaging), USNA (US Naturals Health, health), PCLN (Priceline, online travel), ESI (ITT Educational, edu), GD (General Dynamics, defense), MAN (Manpower, staffing), AGE (Edwards AG Inc, investment), CERN (Cerner, software), DKS (Dicks Sporting, sporting retail), SYK (Stryker, medical), NKE (Nike, retail), ZMH (Zimmer, medical), DD (DuPont, chemical), SHLD (Sears Holding, retail)

Setup/template scan results
TTC-A long: DECK, KSS
MACDV long: UNH
GAPH long: (None)
Turn-to-trade short:

General notes for the session
The really appropriate question might arise deep within: "Why are you scanning for long trades in a market in a clear correction?" Right, my idea is that shall a stock raise in a market that is in correction, rather soon will come a time it has to align with the broader market sentiment. Thus, it can be a good 'turn-to-trade' short.
There is an important question with my new game (e.g. 'turn-to-trade' baby). This is about the right trigger to choose for the trailing stop. Through the weekend I was pondering and I have chosen the Bid price as trigger. As probably it is changing at the fastest rate, which is important.
The other remaining question is if shorter term (near to expiry) options really work better with this quite aggressive, only a few days in a trade template/set-up. (My intuitive part would say yes, because of the higher delta and

Trade session
Wella, I was too late with both possible trades (CME and MAN Puts for March expiry). I have finally made an order for the MAN Put March trade but for the slightly out of the money option. Only I did not take care of the large spread between bid and ask and I made a market order, thus throwing out $150 through the window right away. Has to be more concious and take a better care from now on!

Open positions at market close 2 March 2007

.ACLEG

ACL MAY 135 Call

$122.73

$1.45

($550.00)

.MBTOJ

MBT MAR 50 Put

$49.80

$1.55

$140.00