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Trade Setups for June 21, 2010

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June 21, 2010 – Comments (0) | RELATED TICKERS: AAI.DL , ITW

The futures are off to a tremendous start for the week, with gains in excess of 1.5% across the board due mainly to the announcement by the Chinese to allow for the Yuan to appreciate against the dollar. I've got a couple of short positions along with a large stake of gold (GLD) in my portfolio right now, and may look to add a couple of more short positions before the end of the day is out.

I am concerned right now that the bears may be finding themselves in the same trap that they found themselves in back in late January when the market had a similar (but not as steep) sell-off, before bouncing off the lows and rising to new highs. Such a scenario I am weary of and while I have made some descent profits off of this recent sell-off, I am going to tread pretty lightly on the short side until the market does in fact push lower. I am also considering the idea of beginning to buy a large position in SPY to hold over night to hedge against these wild overnight moves we keep seeing here of late.

Be careful too of what I call a "gap-and-crap" move today where the market has a huge gap up at the open, and then continues to sell-off thereafter. Very real possibility for that happening, so be careful if you decide to start popping off long positions at the market open - I'd consider such a move a high-risk trade.

Here are Today's Trade Setups.

LONG: AirTran Holdings (AAI)

SHORT: Illinois Tool Works (ITW)

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