This is not a substantial position by any means even though it is the only one in my portfolio currently, 80% of my money is either in cash or has been transferred to a high yield savings account.

Overall I think oil was completely overinflated due to speculation with all news in the past which in turn just hyped the commodity up more. Now we are on the way down and I have no idea where the long term bottom lies. Factors like the dollar continuing to fall only weighs on all commodities.

Related Stocks:  USO

I placed a 5% stop which gave the position some breathing room and now today it looks like the recent consolidation has panned out well. The break above $95 today signals a potential long term bottom for Oil and USO. Furthermore, the $90 support trendline held up even better than I expected.

Looking ahead I have now raised my stop to $89.50 to minimize risk and I am still sitting long.

Sean (epicadv) and I have been discussing and with oil heading up there is only room for alternative energy to move as well. Stocks like LDK, SPWR, FSLR, etc. should be on close watch lists.

Related Stocks:  USO

Last night I put in a stop limit buy order for 100 shares of TMO with activation price $60.20 limit price $60.25. This calls for a $60.25 limit order to be automatically activated if the stock touches $60.20 a share. The stock closed yesterday at $59.83.

Now, just so you know TMO averages 2,744,800 shares traded per day yet somehow the stock opened up this morning with a 100 share block at $60.20. THE NEXT ORDER to go through was $59.85ish and the ask immediately went down to this .80s range. The market makers targeted my measly 100 share order knowing that the stock should have opened at $59.85ish.

That's the first part of the story, because yes it gets better.

The way I trade especially in this market is I play everything extremely tight, and I always place a stop loss order. Immediately after my order getting filled and already being down some .7% or whatever on my position I placed my stop at $59.40 knowing that support was at $59.55 and got hosed again!

At around 11:45 AM the stock trended down below $59.50 and guess what the low of the day is? $59.39, yes $59.39 which is a whopping 1 penny lower then where my stop loss order lied. I obviously got bumped out of the position and immediately the stock shot back up and now is trading as of 1:47 PM EST back in the 59.80s.

All I can say is wow... unbelievable...

Related Stocks:  TMO

God bless my soul, lol.

Buy - $11.14

Sold - $10.88

Total loss 2.3% (the stock is now under $10.30, good lord!). Btw, the trade lasted a whopping 2:11 minutes, yes only 131 seconds...

Related Stocks:  FNM

When I ran LDK for 14%, DRYS for 13%, and ANR for 7% in one day all three of those big winners came from the ONE original position.

Quick Recap of the STLD Trade:

The day after I bought STLD the NASDAQ ran up 1.5% and with it STLD ran 4.1% as the stock closed at new all time highs. This is when I added to my position.

Following this record close for STLD, the next three days the NASDAQ shed a staggering 2.8%. To top it off the morning I got knocked out was the day the Fed was announcing a potential quarter point hike. Steel sold off all morning until the unchanged decision was made.I should have known better that pressure would be on commodities that day.

Looking back:

Original buy, $39.17 w/ original stop $38.40 it was my standard 2% stop loss. But my

2nd "double down" purchase, $40.66 w/ stop loss $38.90 made this a 4.3% stop loss. What was I thinking?

The
problem was that I wasn't thinking. I had no rules for doubling down
established yet for the model, and it could have been a great play if
STLD gapped at the open but sadly the market's 2% drop that day had
other plans for the stock.

Model Changes:

The new major rule to the model is with doubling down on positions. Original positions should be the full 100% of what you seek to bet, and if you feel odds are so significant to double down, then the stop loss on the added shares should be no greater then the standard 2%.

Final Thoughts:

Knowing what I know now about the trade, it does not bother me that my original STLD shares were sold for a loss of 2%. How the market and commodity cards played out over the course of the trade was out of my control.

What I can take from this trade is another lesson to apply next time and that comes with adding shares and adding risk. Controlling risk is the key focus of the model, and when you catch a runner, by all means let it run..

Related Stocks:  QQQQ, STLD

Well I grabbed a great initial position on STLD just above $39 on Wednesday and the stock took off on Thursday with strong accumulation volume to close above $40 at new all-time highs. I doubled down on my position at the close Thursday just before the close thinking I had good odds for a gap at the open Friday.

Little did I know the market was going to sell off extremely hard and close down some 2% Friday, driving STLD down over 4% to close just below $39.

STLD is:

• A top three fundamentally ranked stock in the Steel-Producers group
• Has had intense institutional support the last month
• Is a play on the commodity trend
• Last week raised guidance
• Technically has been uptrending with brute force
  

It would be easy for me to say, "hey just ride the wave and hold it out" but I don't do that, I have rules and I like to stick to them. I gave the stock room Friday with the low volume sell off but now I am left not knowing what the heck the market will do Monday and if the stock is going to gap at the open (either way makes a difference).

To end my rant this afternoon after looking closely at the stock I wrote down:

"If STLD opens above $39, hold the full 100% position and adjust accordingly. If it opens below $38.50 sell it all. Place a stop at $38.20 for the full position."

Let's see what happens.

Related Stocks:  STLD

Basically the thinking is I can be wrong xx times in a row, be right once and still make money overall. The other very importance piece of the model is to be trading in any market environment. This currently though has been the big challenge.

The first month with it in action, May, was extremely successful as I had a 15.9% return on my portfolio.

Lately though the market has been intensely volatile which has knocked me out of numerous positions. In fact, the last seven trades have either been split or sold for a 1 - 2% loss. This is unexpected, but still the model is holding up.

Even with the losing streak, all I need is a fully vested 10% win and I will be back well in the black for my portfolio overall. Can you lose 7 times in a row, win once, and still be making money?

The reason I am writing about this is to keep myself up to date on my research and my thoughts out in the open. There is a lot of time left in June, and I plan on beating the S&P 500 again.

As soon as DRYS was knocked out I raised my stop loss extremely tight on GNK and was knocked out of this position was well (over 50% of my portfolio). Lucky for me I actually squeaked out a profit on the trade.

With oil jumping alternative energy stocks had a huge jump in the morning and I snagged some LDK at  $43.30 just after 10 AM with the rest of my cash. Assuming my latest trades clear with cash by Monday I may invest more into LDK or other alternative energy stocks to capitalize on this most recent momentum.

4 PM Update: I was knocked out LDK as well at $42.95 for a small loss. Thank the lord for cutting losses tight....

Related Stocks:  GNK

I've covered this on my blog,

http://www.stocktradingtogo.com/2008/06/03/shippers-are-back-buypoints-ready/

I am keeping my stops tight as always at 2% and will raise them accordingly as the stocks move up. Critical technical levels have not yet been breached for these stocks but I feel with the correct momentum they will be up for the challenge.

Related Stocks:  EXM, GNK

Bought into strength today, tight 2% stop, looking for $80 on the price target side. The stock isn't a complete buy though, $74.10 is technically the best entry for this stock to maximize probability of success.

This is round 2 as LDK I traded for a 14% return in 3 days. Hopefully ANR treats me just as nice!

Related Stocks:  ANR

I have been skeptical of this market since late last week which I wrote about in my blog on Sunday. Huge distribution day for the NASDAQ yesterday and I think there is more to come short term.

DRYS surged today to close at $106.50!

I bought the stock originally at $87ish and it yielded a 18% or so gain overall. I still love shippers as a long term play and if DRYS comes back down in price it will be very tough not to buy some again....

Related Stocks:  DRYS

The fundamentals on RIG are excellent and earnings are due out next Wednesday (May 7th) so I am hoping that I don't get bumped out of the position before they come out.

If earnings come out strong as they should then RIG could easily jump over $160 and into new high territory.

Related Stocks:  RIG

HXM is the 2nd best fundamental choice behind GFA (which I almost bought instead and am shooting myself for after today's runup). The uptrending 50 MA is nice and the stock isn't exposed to the US housing debacle (it is Mexican based).

I have a 5% stop on the stock ($58.20) to give it some room so we will see what happens. 1st Target price is $65.

Related Stocks:  HXM

My rationale behind this play is fairly straightforward, being a Adsense publisher (which makes up 40% of their business) and watching the changes that have taken place (click able areas on text links, drop in CTR and eCPM) across the blogosphere I am going to bet Google is going to be hurting.

My bet is that Google will meet earnings, but guidance will be lower then expected moving forward. This seems to be the standard with a handful of companies recently releasing earnings, Apple (AAPL) is just one example.

We will see what happens tomorrow, but watch Google after the bell, 4:00 PM EST and look for fireworks!

Related Stocks:  GOOG