Special Commentary - September 23rd 2007

Good evening Rebels,

We hope you had a good weekend and you're ready for a new week on Wall Street.

Lisa and I have been reviewing charts for many hours today. We have been looking for charts that are setup candidates for long and short positions. We have identified some stocks which are displaying signs of becoming a "confirmation" entry, but we have to see what the market is going to do next. We are being very honest in saying to you that many of the charts we have looked at are at a precipice. They simply could go either way from here.

First of all we have looked at some of the big names everyone is 'pumping' in the media. Stocks such as RIMM, AAPL, AMZN, NILE, and so many others, all have the appearance of potentially rolling over. RebelTraders does not buy into what the media says we should buy. That is just following the 'pumpers'. And usually when everyone says you need to buy something, it might be the time you should think of going the other direction. Jesse Livermore said in the book "Reminiscence's of a Stock Operator" (MANDATORY reading for anyone interested in the stock markets) that the time to sell is when everyone is in unison and saying you must buy. And the same goes for the opposite. When everyone says to sell, then you need to buy. Of course, as technical traders we apply chart analysis to our entries and just don't sell and buy blindly. We will leave that for the yahoo message board and stock picking services that only get caught up in the emotional 'pumped' stocks that everyone says is "going to the moon". Anyone can say a stock will fly to blue skies. But a smart trader will not get caught up in emotionally driven stocks. They might be good for a day trade here and there, but for longer term swing trades we look for the stocks that are NOT emotionally driven. As emotionally driven stocks will be the ones that fall the fastest and hardest.

The charts that we looked at throughout the day today gave us some trading setups, however as I said above, they can go either way. The major indices have floated upwards over the past few sessions and this gives rise for concern and is why we have not been a supportive (yet) of this market advancement. We need proof, and the financial sectors are not on board with this advancement. If you look back over time you will observe that the financial sectors are necessary components in a bull market. At this time the financials are not speaking 'bull' at us here.

We will share with you some of the stocks we are looking at as possible setups and we will monitor for trigger points to be reached, at which point we will then communicate to you in more detail the trading plans for these stocks.

Apria Healthcare (AHG) on a weekly chart is trading in a downward channel, which is actually a bull flag formation over the long term. If AHG can make a move to the $29 to $30 range then this will be a trigger point for a long term swing trade.

Fuwei Films (FFHL) has been on a steady decline since its IPO last year. The IPO price was $8.00. On the chart for FFHL the $8.00 region has been a significant price level with multiple interactions over time at that price. Currently, FFHL is attempting to move past that $8.00 point. What will happen here is it will either fail and pullback again or it will garner enough strength to make the move above that point. But you should not buy the instant it breaks above $8.00. If FFHL is on a course to reverse itself and head upwards then there will be plenty of upward potential in the future for a good swing trade. The problem with some trading services or chart technicians is that they identify what may be a good pattern on a chart and buy the instant it crosses a threshold instead of waiting for a proper confirmation to be achieved. The result by not allowing any trade to achieve a confirmation is that, more often than not, it will be a failed swing trade. This is one of the things you will find with our swing trades. We will give you trades with confirmation points, not just a buy point.

We are also watching for direction indicators on American Commercial Lines (ACLI) for additional signs of a new uptrend in the making. There is current a chart formation which would suggest that is is being accumulated but there are other signs that are negative so we are going to watch. this Tuesday ACLI will be making a presentation at a Jefferies conference so there may be a catalyst for the stock to negate some of the bad signs.

Tele Norte (TNE) has a good pattern for a long term swing trade if it can get above $23.00 range. Even though this has a nice setup the overall market conditions may disrupt all good setups and turn them in the other direction very quickly. We will watch this one closely and keep you advised if it will become a play.

United Technologies (UTX) is one that we will watch for a setup to form. Currently it is extended and due for a retracement. At which time we will see if the interest continues to accumulate shares, and at that time we will provide a trigger and confirmation entry point on this.

An example of a stock which looks good by itself, but warrants caution due to the sector it is in, is Nordstrom (JWN). On the weekly chart the pattern is good for a swing trade once it makes a move past the $53.50 area. But what give this stock the potential of being a failed swing trade is the sector in which it resides, retail. Herein lies the dilemma of so many stocks at the moment, they may look good in themselves but in the whole context of the market and sectors they are poised for a failure.

We are not bearish or bullish on the market. We are neutral and cautious. There is nothing wrong with waiting for confirmation of movement before entering trades. If we are, in fact, going to see a powerful bull run to the end of the year, then there will be plenty of time to saddle up. We will not risk our money on speculation, and we sure won't advise anybody else to enter risky trades. This isn't a game, it's business, serious business.

RebelTraders... our edge is the human mind