TCM Notes : 9/28/09

• While there was an outside reversal that occurred on most of the indexes and leading stocks after last week's FOMC meeting....my bias still remains tilted to the long side of the market. To become overly biased towards pessimism at this juncture could prove to be folly as we enter into the 4th quarter. To be sure there are plenty of short trades to be had for the nimble as we pullback into supporting averages and fibonacci levels. Obviously you don't want to blindly buy anything, but opportunities can be found on emerging patterns and tests of key moving average support.
• Saber rattling of the G-20 security council speech led me to take an after hours position Friday in UCO. UCO is the double beta on the front month of crude oil. Drawing a regression analysis channel shows that UCO is near the bottom of this range. It's overshot before through this channel, so it's possible I may have been too soon. However, my stop is near a level that may prove to be strong support. Also, this level of 10 is an area that I highlighted here months ago as a breakout level due to it's prior resistance. This level should become support now. GS reiterated their $85 target for oil by year end 2009. Dollar weakness is another factor in this play. Demand numbers are not helping this play from a fundamental standpoint, but I'm looking for geopolitical concerns to trump that for the time being. We'll see. Long @10.07 Stop @9.81 to 9.36 depending on the action. Obviously 7% max stop loss is in effect unless I add to the position on a secondary entry which would skew the cost basis adjusting where a 7% stop loss would go.