Time 4:48

Trading Technique: Hedging...

Rules:

-If the market has a strong week and closes Thursday and Friday strong and then has a strong (defined by up 1%+) Monday morning, then we will put on a market hedge by 11:30. The theory is that we don't need to be greedy. All that strength needs to be consolidated or shaken. We want to protect our positions from the inevitable shake out of the market. Even if the market goes up another 1% chances are the rest of the portfolio will go up more than the hedge will suffer.

-If our portfolio is up over 3% in the 1st 2 hours of trading then we will look for an appropriate hedge. Chances are the portfolio will pullback at the very least during the 12 to 2 time period and at most a reversal could occur.

Market Commentary: China...

Chinese stocks are blowing out EPS numbers vs estimates on a broad front. Companies in diverse industries like, steel, medical, alt energy, energy, internet, software, and gaiming are all showing blow out EPS and Rev. We need to keep focusing on this space, trusting the charts and riding the wave right into the olympics. My guess is that the end of this rally won't occur until the torch is in Bejing.