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SSS - Thoughts on the Short-Side for Friday, June 24, 2011

The market indexes are coming off on lighter volume this morning. The market is in the short-term very news-oriented, but we should remember that most of the current news has likely alreday been discounted by the market.

If the indexes bust their 200-dma then we would look to be more aggressive on the short side. The simple solution to any market uncertainty is to stick to your stops. Thus AAPL's ability to push above the 200-dma yesterday was a reasonable trailing stop on the upside, as this morning the resistance area in the 330-331 area came into play and the stock has been unable to break through those levels. Thus traders using tighter stops could have exited at the 200-dma while those using looser stops might use the 330-331 level as an upside guide. NTAP, on the other hand, never got above its 50-dma at 51.54, more or less, hence remained in play and today is down about 2.7% as we type.

For now we tend to think that the probability of at least a short-term rally in the market of a few days duration is high here, so simply watch your stops and stick to them. If one is quickly stopped out on the short side another opportunity may always be waiting at higher levels if the market rallies. In the meantime, we will see whether this current rally attempt produces a follow-through day. Consider that if the Euro-members move forward with a bailout of Greece, then we are likely looking at "Euro-QE" coming into play, which would likely lead to a falling Euro, rising dollar, and perhaps some of this extra Euro-liquidity coming into dollar-denominated assets.

This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2024 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.
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