The Ts indicators closed at 0.38 and 0.74 and as both are below 1.00 we are said to be in Down trend. As the 10 week moving average is above the 50 week moving average on the S&P 500 we are said to be in a DN/UP condition. Despite yesterday’s selling pressure we did not see a near term oversold trading signal and as such want to keep adding short side exposure. (A Oversold/Up condition will be signaled once and if the first indicator falls below 0.25). For now we want to maintain short side exposure and we will look to short the following at the market opening price:

1) Price Line (PCLN – 200.01) we will short 50 shares at the market opening price. Technically PCLN has clearly completed a great run, but has topped out and now firmly established below its 50 day average, the slope of which is rounding and looking to turn lower. Fundamentally PCLN is a great company that continues to knock the cover off the ball, and while the p/e multiple after cash is not sky high at 18x after cash, in this current 10-12x environment that leaves room for some contraction. Especially with the 200 day average some 21% lower at 158. This is a momentum short. Place stop at $215.00


2) Owens Corning (OC – 23.93) we will short 420 shares at the market opening price. Technically OC looks to have set a near term top at $26 and is now rolling over below its 50 day average. Fundamentally this heavily indebted building materials company is trading at generous 17x this years earnings estimate. Place stop at $25.60

3) Sales Force.com (CRM – 62.43) we will short 160 shares at the market opening price. Technically the stock has a massive double top at $75 and is now clearly breaking down below its 50 day average. Fundamentally this fast growing company trades at a very expensive 71x 2010 earnings after cash. A momentum short. Place stop at $67.75