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SSO None

Play Editor's Note: AIG, facing imminent bankruptcy, gets an $85 billion loan from the government and the market tanks. Investors are running so scared that short-term t-bills are nearing 0.0% (zero) yield. Foreign markets are being closed by their governments to halt the slide in equity prices. The volatility index has closed at multi-year highs. Wall Street firms are disintegrating before our eyes. These are amazing times in the market. Have you heard the Wall Street maxim to "buy when there is blood in the streets"? I can't remember a time when there was this much "blood" in the street. That maxim works better for an investor willing to hold on to their position for a long period of time but nimble, short-term traders could win big or get crushed in the stampede. We have to be careful. The best bet right now may be to just sit out on the sidelines and wait for the smoke to clear. You don't have to be idle if you're sitting out. This is a great time to be looking for a wish list of stocks you want to buy and start making notes like "I would consider buying XYZ stock if it hits this ... level, etc."


New Long Plays

Ultra S&P 500 Proshares - SSO - cls: 50.00 chg: -4.64 stop: *

Company Description:
The Ultra S&P 500 ProShares (SSO) is an exchange traded fund (ETF) that delivers twice the daily performance of the S&P 500 index.

Why We Like It:
Have you heard the stock market maxim, "buy when there is blood in the streets"? If you read my note tonight this is going to be a little redundant. You've probably heard that the best time to buy is when nobody else wants to or some other mutation of that idea. To take advantage of other people's fears we have to step out and do the opposite of what we are inclined to do. Honestly, sometimes the best trade of all is to not trade. The right thing to do right now for a lot of traders is to just sit out, grab some popcorn and watch the drama unfold on Wall Street. If you're one of those people who can't just sit back and watch then consider this. The Volatility Index (VIX) is screaming higher and closed at multi-year highs today. The VIX doesn't get this high very often and usually it's a signal that the market is near a bottom. I suspect that there could be some follow through lower tomorrow morning but we could see a big bounce soon. Here's my plan: wait 60 to 90 minutes (maybe wait until noon) and then buy the SSO. The SSO will give us twice the move in the S&P 500. The market opens at 9:30 a.m. I'm suggesting you consider buying the SSO between 10:30 and noon. The newsletter will hypothetically enter at 11:00 a.m. This should be considered a very speculative, high risk trade because we are trying to "catch the knife" that pundits talk about all the time. We'll use a stop loss of five percent (5%) under whatever our entry price is. Our first target is a 10% gain. Our second target will be evaluated tomorrow. Remember, this is a high-risk play. Bulls trying to catch the low could end up being sliced into steaks.

Picked on September xx at $xx.xx <-- see TRIGGER
Change since picked: + 0.00
Earnings Date 00/00/00
Average Daily Volume: 10.6 million
 

New Short Plays

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