8/18/2009 pre open update

• yesterday was the crusher: SB IDX got stopped out for its largest historical loss and the NQ discretionary swing trade had a big drawdown, and FAS got hit for about 10%...
• the systemic swing trading portfolio is now down about 10% from its early july high...historically, the portfolio has experienced a max drawdown of about 15% from its recent high, so this current drawdown is within normal expectations...however, the max drawdown usually coincides with a big move down in the market, and since early july the market has not been moving down but rather has had a a big move up...perhaps extreme momentum in either direction is problematic for the systemic swing trading portfolio...
• i am giving even more consideration to rebuilding all the models in the portfolio...the rebuilding will keep the basic structure/filters of each model, and just update each filter's parameter setting to reflect the additional in sample market data that each model would now include...
• due to the way the leading indicators of economic growth are behaving (http://stbsmb.blogspot.com/2009/08/ecris-wli-growth-rate-runs-up-to-26.html) and in my belief that most money managers are under weighted equities, i believe the 'fear of missing' psychology will kick in and we will see a huge equity market runup into the end of the year...
• i have been using a very small lot size for each addition to the discretionary NQU09 swing trade because of the possibility that the bottom of the range would break and we would push down to the mid or low 1500's...i only held the position because i believe this move up is not over, not over by a long shot!
• i added another NQU09 lot (third) at 1576.00 yesterday...i am now averaged in at 1596.17...i am looking to sell the third lot at 1607.50, the second lot at 1617.50, and the first lot at 1627.50...maybe it will take a week or a month to get back to these levels, but this is my current plan..
• i am also planning on adding more NQU09 if we go lower...however since we broke the bottom of the base that dates back to 7/23, and are now testing the bottom of the base that extends back to 7/22, i will be more discriminant with my future additions...
• looking to add more FAS at 61.50...

Disclosure: Long NQU09, long FAS.

***remember this is an illustration of what i am trading and my thinking...my trading plan may change without notice...this is not a recommendation for you or anyone else, to buy or sell this or any other security...***