Tuesday, September 29, 2009

Bed, Bath & Beyond - BBBY

I was surfing some retailing charts and a couple of items caught this speculators eye regarding Bed Bath and Beyond, ticker BBBY (chart above). First off, we had a bearish engulfing or outside day if you will last week on significant volume. If that was not enough, it was followed up immediately with a gap down. That gap remains open, with today being the 4th day, satisfying my (and others) minimum 3 day rule (gap must stay open 3 days). I am prepared to punt BBBY short here at $37.85 with a stop at $38.41.

You may ask why the stop there? Why not above the gap?

Well, the gap in question is from 39 to 38, basically. If we violate the gap it should be filed. The 60 minute chart shows and inverse head and shoulder that even my mother could identify, worth 1.5pts and which if taken from the neckline of the formation implies a $39.50 target, which fills the gap and then some. Hence my stop that looks inordinately tight.

I remind you to pay attention to the bonds. Yes I know this is heresy and yes I know CNBC has a love affair extraordinaire with equities and yes I know the equity guyz and galz are more comely but the real brains is found in the bond pits. One of this 2 groups is going to be very wrong with their bets. You must choose as one has the sizzle and the other has the steak. I am betting with the bonds but you are free to copper me.

Good speculating and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Ultrashort Russell 2K ticker TWM @ $27.50 stop @ $26.40
Long 1 unit Ultrashort Financials ticker SKF @ $24.55 stop @ $23.49
Long 1 unit i-shares Barclay 20yr ticker TLT @ $97.80 stop @ $94.94
Short 1 unit i-shares Russell 2K ticker IWM @ $61.70 stop @ $63.80
Short 1 unit Costco ticker COST @ $58.00 stop @ $60.11
Short 1 unit Vornado ticker VNO @ $68.30 stop @ $70.71
Short 1 unit Bed Bath ticker BBBY @ $37.75 stop @ $38.41

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