Intra-Week Update, Thursday, 02/12/2009 10:34:29 AM EST Stopped out of SQNM play by Keene H. Little Click here to email Keene

HAVING TROUBLE PRINTING?

SQNM gapped down this morning and dropped below its February 5th low and hit our stop at $15.90. Depending on when you exited the play (2010 $22.50 LEAP call, KAO-AX) you were able to sell it for $2.50-$2.85 first thing in the morning. Not a great start to the LEAPS Trader but it is what it is.

I wouldn't be at all surprised to see SQNM bounce back up to the $19 area as part of a correction of the decline from the January high but at this point the move down from January is an impulsive 5-wave move and that sets the new trend for the stock to the downside. I am no longer interested in a long play on SQNM.

It was a good setup and I hate taking losses but it's part of the game we play. It's also why I'll continue to be very cautious about the long side for any stock as long as I feel confident we will see new market lows below the November lows within the next month. It's that receding tide thing.