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Short-term traders dream

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Up until now, shares of Informix (NASDAQ:IFMX) have been a short- term trader's dream and the stock has treated IndexSkybox.com and OptionInvestor.com subscribers well. Yesterday, IFMX triggered our upside alert at $7 and the stock has moved higher by nearly 14% and that makes for a nice gain in just 24-hours. Our swing- trade target is $8.75 and if the Fed were to cooperate with a 50- basis point cut, that target is still achievable.

Informix Chart - 60-minute interval.

Building a "watch list" of stocks that are actionable when they hit a specific price is a very good way to bring discipline to your trading. Traders that bought our upside alert yesterday should be snugging up stops to break-even. When I get a trade that's up more than 5%, I don't want that potential profit turn into a loss.

Russell 2000 triggers upside alert!

The Russell 2000 just gave me an upside alert at 509 and my first level of horizontal resistance since this index broke a downward trend at 493.

Russell 2000 Index Chart - last seven months.

Traders should be watching the RUT.X if they're trading smaller cap stocks. Our first "hurdle" at 509 is currently being tested and we've also identified levels at 525 and 542 that can serve as bullish targets.

Also giving upside alerts!

The Semiconductor Index (SOX.X) and the Disk Drive Index (DDX.X) have given upside alerts at levels we've discussed in the recent week. Review your charts and levels!

Look for bond yields to bounce here to provide added lift to rally!

Bond yields are lower today, signaling there's some buying being done in bonds. This can compete with stocks and today marks some significant divergence that we've been seeing. If bond yields start rising (as in the past month), that could signal a further fuel in an equity rally that looks to be taking place. Conversely, if we start seeing bond yield continue to slip lower and stocks start to stall out, traders can snug up those stops in bullish trades. Don't feel bad if you get "stopped out" with a profit. That's what trading is all about!

Jeff Bailey
Staff Analyst

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