Editor's Note:

I am adding a couple of bearish candidates tonight. However, readers will want to keep an eye on the GDP report. If the GDP report comes in positive Friday morning the news could really add fuel to the rally's fire. More conservative traders will want to strongly consider aborting either of these new bearish plays if the GDP number is too strong.


UltraShort NASDAQ - QID - close: 26.63 change: -0.36 stop: 25.69

Why We Like It:
I want to take another swing at the QID. Check out the chart of the NASDAQ below. It's failing near the trendline of lower highs, which is only natural after such a sharp rally. The intraday reversal also coincides with some round-number resistance on the NASDAQ composite near the 2,000 level. You can see the same trendline of lower highs on a chart of the NASDAQ-100 index, which the QID is based on. Remember, the QID is a double-short inverse ETF.

I'm placing a very aggressive bet that the NASDAQ has hit a short-term top. If you prefer to see more confirmation then wait for the QID to rise over the $27.75 or $28.00 levels. This is a higher-risk trade so I'm suggesting small position sizes at least one half or less than normal. Our first target is $29.90.

Annotated chart of the NASDAQ:

Annotated chart of the QID:

Entry on      July 30 at $26.63 
Change since picked:     + 0.00   			
Earnings Date          00/00/00 
Average Daily Volume:      23.9 million 
Listed on  July 30, 2009    


Biogen Idec Inc. - BIIB - close: 47.36 change: -0.76 stop: 50.05

Why We Like It:
The BTK biotech index is extremely overbought and hitting significant resistance. Combine that with the NASDAQ hitting resistance and this could be a good spot to speculate on a correction. I like BIIB as a bearish candidate because the stock has been under performing its peers. The oversold bounce has stalled under $50.00 and its exponential 200-dma. I'm suggesting bearish positions now. There is some support in the $45-44.50 zone but if the market really begins to see some profit taking I expect BIIB to breakdown to new lows. Our first target is $43.00. Our second target is $40.50. My time frame is four to six weeks.

Annotated chart:

Entry on      July 30 at $47.36 
Change since picked:     + 0.00   			
Earnings Date          07/16/09 (confirmed)    
Average Daily Volume:      3.28 million 
Listed on  July 30, 2009