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Feb. 1, 2010, 12:01 a.m. EST ? Recommend (1) ? Post:

It's time to buy the market

Commentary: Follow the smart money and go long

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ProShares UltraShort Dow30

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STORY QUOTES COMMENTS SCREENER (6)

By Thomas Kee

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LA JOLLA, Calif. (MarketWatch) -- January was a month where we looked for shorts, and February will be a month in which we should look for longs.

It's too early to call it a trend, but give it a little time. This year is going to be back-andforth for the first handful of months. The oscillations will present excellent opportunities for those who are not dependent on higher levels. "Buy and Hold is Dead" -- that is the title of my book, and it has been proven time and time again. This is just another example.

Proactively, we entered ProShares UltraShort Dow 30 (DXD 25.63, -0.05, -0.19%)when the Market tested 10,750 On Jan. 19, 2010. That was our defined resistance level for the Dow. We had been waiting for a test since we entered ProShares Ultra Dow 30 (DDM 49.09, +0.12, +0.25%)on Dec. 9, 2009. We secured 8.54% on the upside from DDM, and we were holding roughly 8% in gains in DXD at the time I write this.

First Take

Alcoa lite

Alcoa has a long history of managing expectations. As the unofficial opener of the earnings season, it sets the tone for those that follow. Did Alcoa deliver? Well, sort of. 6:06 p.m. April 12, 2010 | Comments: 7

TRADING STRATEGIES: FEBRUARY

Without a net

It's been awhile since the economy has had to perform on its own. Let the advice from our experts help you invest with confidence.

? Hulbert: Don't give up on February ? Lowell: Managing the volatility ? Ashbaugh: Strength in pharma, autos ? Kahn: Speed bump? Or major correction? ? Kee: It's time to buy the market ? Marder: Finding the uptrend ? Hsu: What China bubble? ? Karsten: Losing your love for bonds ? Hutchinson: Reaping dividends ? Hulbert: Finding the beauty in bonds ? Stovall: Investing sweet spot ? Boockvar: Headwinds of 2010 ? Lambregts: Assets bubbling over

I will look to secure gains at our next

support level, and convert to long. This process will repeat itself over and over for

Most Popular

the first half of 2010, I expect. Integrated are strict risk controls of course. All of our strategies have strict risk controls. This one is called "The Strategic Plan." Read more.

MOST READ MOST COMMENTED

1. New Dow high ahead? Happy talk feeds sheep

Interestingly, I removed ProShares UltraShort Financials (SKF 17.72, -0.14, -0.78%)from our short

2. The bailouts worked, and that's the problem Markets Quotes My Portfolio My Alerts

3. Is Palm now too expensive for a buyout?

4. Get the yuan right, and prove pundits wrong

Community

positions in January due to Sen.

5. Struggle to close above 11K tells a lot

Christopher Dodd deciding not to run for

re-election. I considered it being akin to them "shooting one of the generals."

Reader Response ?

Although I will re-engage SKF again at some point later in the year, I removed it from the position trading strategy on the heels of that Dodd news. Who knew Obama would have thrown the curve ball he did?

So which is it? The article title says 'Time to go long', yet you are still holding 2x short. "Get ahead of the curve" is your advice. "Catch the falling knife and hope it stops before it cuts your hands off" is what that sounds like to me."

- buddhabill | 12:56 a.m. Feb. 1, 2010

This brings me to an interesting

+5 Votes (5 Up / 0 Down)

[13.04.2010 9:16:29]

It's time to buy the market - MarketWatch

observation. First, I pay attention to what smart money does, and that is extremely productive. It helps me develop the strategies my clients use.

Obama has been warning the banks for a while. There have been a number of different warnings in fact. Until now, no one thought he was serious. No one thought he would be able to do anything. Now, his message to politicians is, you had better think again. The message to big banks is, you had better start loaning money.

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If this was a tactical maneuver by Obama, I may have newfound respect for him. If he leverages his 'bank reform' efforts to influence banks to loan money instead of trade it in the open market, he will have done a good thing. I think it will be horrible if what he said actually happens, but if it turns out to be a simple spur that gets the banks moving again, the economy could make a little more positive headway, and I will reconsider my recent "Short Obama" criticisms. Only time will tell.

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Regardless of the answer, we will be proactive, we will go with the flow of the market at all times, and we will make money no matter what happens to the economy. That is what we are about.

For now, we are short, by holding DXD, and looking for signals to cover, and go long. ProShares Ultra QQQ (QLD 67.78, +0.10, +0.15%), DDM, and ProShares Ultra S&P 500 (SSO 43.99, +0.16, +0.37%)are all good plays if the market moves higher. It is all about timing, so get ahead of the curve, and listen to what smart money is doing. It will make all the difference.

These recommendations may have already been disseminated to subscribers of Stock Traders Daily. Kee does not hold a position in these stocks.

Thomas Kee is president and chief executive of Stock Traders Daily and the author of "Buy and Hold is Dead: How to Make Money and Control Risk in Any Market."

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Comments (6) Community Commons - for free flowing discussion

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buddhabill 71 days ago

+5 Votes (5 Up / 0 Dn)

So which is it? The article title says 'Time to go long', yet you are still holding 2x short.

"Get ahead of the curve" is your advice. "Catch the falling knife and hope it stops before it cuts your hands off" is what that sounds like to me.

Reply Link Track Replies Report Abuse

[13.04.2010 9:16:29]

It's time to buy the market - MarketWatch

placebo 71 days ago

Buy the market? Perhaps.....with a 90% discount.

+1 Vote (1 Up / 0 Dn)

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ClownPosse 70 days ago

+1 Vote (1 Up / 0 Dn)

This has turned into a traders market. Nothing else. Unfortunately there are a lot of 60 year olds and 20 year olds who don't realize this yet...

Reply Link Track Replies Report Abuse

ThomasKee 70 days ago

0 Votes

It is all about Strategy. If you do not have a plan, and if that plan does not include risk controls, you will be wiped out. If you execute a proven strategy, you should do fine, and remain ahead of the curve.

Have a look at these strategies for example:



Goof Trading.

THK.

Reply Link Track Replies Report Abuse

zenalgorithm 69 days ago

-1 Vote (0 Up / 1 Dn)

30-35% swings are common in bear markets. Bear markets typically last about 2.5-3 years, but this is a bad...longer one. I think there are probably 2 more 35% crashes coming within the next 2 years.

SMH is beginning to stumble...be careful going long here. Reply Link Track Replies Report Abuse

Sagacity1 69 days ago

+1 Vote (1 Up / 0 Dn)

"The message to big banks is, you had better start loaning money. "

While I despise the banks and hate to defend them, this is where I have to. Politicians including the President do not seem to understand simple economics. The reason we are in the mess we are in is due to too much credit given to too many irresponsible or now jobless borrowers who cannot repay them back!

Put it this way for the learning impaired, if you were a parent and your child maxed out the credit card and never made back any payments on this borrowed money, if the child asked for another loan, would you give it to him or her?????? Of course not! The child should save and not borrow more and the parent should not lend it out. Contraction is a necessary thing just like recession and failure are necessary things. They are lessons to wipe away excess, learn from past mistakes and allow for future success. But no, we cannot have any losers heaven for bid! Unacceptable outcome there so let us run up debt all the more so we can save everybody.

Hello McFLY!! But then again, that is why I do not run for political office. Common sense and prudence and truth are weaknesses in that realm.

[13.04.2010 9:16:29]

It's time to buy the market - MarketWatch

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