Bought +2 RTH 100 AUG 09 85 PUT @3.30 Mark 82.91

This is a belated post on a re-entry for Retail HOLDRS ETF (RTH). I entered into a RTH short again last Friday when we failed to stay above \$83 into the close. The doji on Thursday seemed like a good pause for the rise. Then the inside-day (trading within the range of the previous day) on Friday with a close looking to be below the resistance seemed good to go short at the time. Then Monday we made a slightly new high and closed near the top. Today is continued indecision in the market as we hung onto a high level. (See Figure 1)

However, we've never touched my mental stop of \$83.91 (Figure 2) yet. Thus, I continue to hold this position while the price swings around.

Entry: \$82.91

Stop: \$83.91

Target: \$79

Reward / Risk = 3.91 / 1 = 3.91 \< 5, which is less than my trading rule stated. I'm gonna tighten my stop to \$83.50 based on today's (Tuesday) action.

New stop = \$83.50

New Target = \$80

New Reward / Risk = 2.91 / 0.59 = 4.9 \< 5 ... still not good!

This isn't a good entry because I based this entry mostly on my previous analysis plus the charts of the day and didn't reassess the situation fully. I was away on holiday on Friday when I made this trade near the close so I didn't even have all of my analytical tools available.

[caption id="attachment_1651" align="aligncenter" width="500" caption="Retail HOLDRS ETF"][Retail HOLDRS ETF][][/caption]

[caption id="attachment_1652" align="aligncenter" width="500" caption="Retail HOLDRS ETF"][Retail HOLDRS ETF][][/caption]

[Retail HOLDRS ETF]: http://traderpau.files.wordpress.com/2009/08/2009-08-04-rth.png [Retail HOLDRS ETF]: http://traderpau.files.wordpress.com/2009/08/2009-08-04-rth_prop.png