ShadowTraderPro Focus Report for March 14, 2008

The ShadowTraderPro Focus Report is your every morning dose of market reality brought to you from the resident geniuses at ShadowTrader. Overseen by Chief Equity Strategist, Peter Reznicek, each issue contains a full report on the prior day's action, including market internals, technicals, and what sectors were hot and cold. Each issue also includes the ShadowTraderPro Model Portfolio, which updates members on what stock plays STPro is currently engaged in officially, as well as provide a daily list of long and short setups for more self-directed traders and investors.

If you have any questions regarding commentary or plays in this newsletter, please email to focusreport@shadowtrader.net.

The Big Picture

Good Morning, Traders. We're not even gonna bother trying to explain what's going on in the broad market because basically there is no explanation. This much we know: There is a market out there and its very jittery. There's a lot of government intervention going on and the market is very sensitive to that. As far as the S&P is concerned the constant barrage of news is creating charts that have no respect for technicals. Just a quick look at the last three days should be proof enough if you still think the market is rational right now. Let's hit the reverse button just for a second. Tuesday morning, Fed pumps in $230B in liquidity, Dow rallies 400 on a really nice increase in overall volume. Wednesday, market runs just a little higher to a Fibonacci retracement and then sells off on lower volume which is good. Wake up Thursday to a gap down so severe that all of the Fed gain is erased, whereupon the market moves lower to attempt to fill the Tuesday morning gap, then fails to do so after hearing some nonsense about writedowns in the financial sector as being over. Puh-leeeeze, dry that one out and you could fertilize the lawn with it. Market then responds with another rally that moves us right up to Tuesday's highs.

Now, gentle reader, you might be saying to yourself, why are they telling me this, I know all that. Well the reason is that we feel its very important to drive home the point that the market as a whole is going nowhere. Absolutely nowhere. Want more proof? Please pull up XLF, XLE, and IXJ. Those are quick ways to take the pulse of the market. They are the ETF's for financials, energy, and healthcare, respectively. In the same order they make up 22%, 10%, and 12% of the S&P 500. The charts look like dirt. The energy doesn't look as bad as the other two but when you look at it on a daily, is it a head and shoulders (bullish) or is it an inverted head and shoulders (bearish). You could make the case for both, wouldn't you say? Just a big bunch of volatility that is going to make you think you are working overtime at Frustrated Incorporated.

Ok, so what to do, right? You don't pay us your hard earned dollar a day to hear us complain that the market is difficult. To which we would respond with the same mantra we been chanting all year. It's either something that is inverse to the dollar or its showing amazing relative strength. The first category is made up of agricultural and other commodity related stocks and/or currency etf's. And the second group is made up of stocks that are what we call "under accumulation". You can know that a stock is one of those by patterns that we call "high and tight". Meaning you got a nice bull flag pennant going and the market is gyrating like mad and the pennant does not get shaken. The pattern stays intact even as the market goes nuts. Check the charts of TNE, DNR, RDC, and ECA. These are all IBD darlings and would definitely fall into that category of high and tight.

Oh yeah, we almost forgot. Gold hit $1,000 per ounce overnight last night. :) The next FOMC decision on rates is early next week, hitting the tape at 2:15pm EST on Tuesday. Yet another reason to not get too committed to either side just yet.

Under The Hood

When we say "under the hood" we mean market internals, ie: what was really happening behind the scenes. ShadowTraders who listen to our daily broadcast every day live on the thinkorswim platform know that all closing figures on the major averages should only be interpreted in the context of market internals. Look for convergences and divergences in the breadth, a/d line, and trin figures below to either confirm or cast doubt on what all those talking heads on TV are telling you.

Dow Jones Industrial Average	12,145.74	+35.50	+0.29%
S&P 500	1,315.48	+6.71	+0.51%
Nasdaq Composite	2,263.61	+19.74	+0.88%
Nasdaq 100	1,750.40	+15.22	+0.88%
Russell 2000	679.71	+12.40	+1.86%
Spot Gold	$993.80/oz.	+13.30	+1.36%
Crude Oil	$110.33/bbl.	+0.41	+0.37%
NYSE Overall Volume	1,843,019K	n/a	+18%
Nasdaq Overall Volume	2,505,578	n/a	+17%
NYSE Breadth	1.6 : 1	positive
Nasdaq Breadth	1.9 : 1	positive
NYSE Breadth Ratio	61.57
Nasdaq Breadth Ratio	65.43
NYSE Advancers/Decliners	+476
Nasdaq Advancers/Decliners	+671
NYSE Trin	0.86
NASDAQ Trin	0.82
$VIX	27.29	+0.07
Strongest Groups:	Homebuilders	Mining	Biotech
Weakest Groups:	Insurance	Internet	Pharmaceuticals

Heads Up

Up and coming economic and corporate data that may move markets this week:

Today

08:30am EST - Consumer Price Index (CPI)

10:00am EST - Consumer Sentiment

01:00pm EST - Bernanke speaks at National Community Reinvestment Coalition meeting. No Q&A expected.

Reporting earnings before the open: ANN, LIZ

Bulls and Bears

This section is for self-directed traders and investors who like to "do it themselves". Every trading day, Bulls and Bears will list long and short equity setups with defined entries and stops. Note: A listing in this section does NOT necessarily mean that the stock will end up as a part of the ShadowTraderPro Model Portfolio. Plays listed here change daily and are not managed or tracked by ShadowTrader unless traded via e-mail alert.

Long Ideas

Symbol	Trigger Price	Stop Price	Notes
TNE	25.15	23.75	Brazilian telecom? Yes. No subprime risk here!
DNR	33.01	31.00	breakout from tight range near the highs. See chart above.

Short Ideas

Symbol	Trigger Price	Stop Price	Notes
none

ShadowTrader Model Portfolio

The matrix below shows all current ShadowTrader Pro plays in the Model Portfolio. The Model Portfolio contains only those plays that are sent out in real-rime via email. Bulls and Bears plays above are not actively managed or tracked. Current open positions are on top, with positions that were closed in the current calendar week on the bottom. Closed positions are moved out of the matrix on Monday mornings and posted in our performance page here.
To get the most out of your subscription and for detailed instructions on how to structure your own portfolio, read our Focus Report User's Guide

sym	dir	size	date entered	entry price	date closed	exit price	target	stop	status	mark to market	p&l points	p&l capital	capital commit
OPEN POSITIONS - week of 3/10 - 3/14
PTNR	long	400	3/3/08	21.96	n/a	n/a	24.00	20.50	open	22.96	1.00	$400	$8,756
	comments: bought 100 at 21.53, added 300 at 22.10, new 52 week highs today.
GLD	long	100	12/21/07	88.70	n/a	n/a	100.00	91.00	open	98.34	9.64	$964	$9,701
	comments: Gold hit $1,000 in overnight trading recently.
DBA	long	250	03/14/08	42.70	n/a	n/a	47.00	40.70	open	42.50	(0.20)	($50)	$10,675
	comments: Textbook inverted head and shoulders.
CLOSED POSITIONS week of 3/10 - 3/14
SMH	short	200	3/4/08	28.12	3/11/08	29.35	n/a	n/a	closed	n/a	-1.23	($246)	n/a
	comments: SMH triggered our stop in the last few minutes of trading
	TOTALS:	750	open shares (open capital committed doesn't include closed trades)										$29,132

Click here for ShadowTrader Pro closed trade stats

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Disclaimer and Waiver of Claims: Disclaimer and Waiver of Claims: The ShadowTraderPro Focus Report is a newsletter service, designed as supplemental material for the ShadowTraderPro Newsletter subscription service and it is not intended to be a stand alone newsletter. The risk of loss in the trading of any securities products can be substantial. The strategies mentioned here are active trading strategies, therefore you should carefully consider whether such trading is suitable for you in light of your personal investment objectives and financial resources. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Past performance of any trades mentioned never guarantees future results.

Securities and options involve risk and are not suitable for all investors. See the characteristics and risks of standardized options.