Evening Star Forming

The economic reports came in mixed today. New Home Sales and the Oil Inventory reports both came in slightly better than expected. Those numbers were offset and then some by the Durable Orders coming in weaker than expected and a downgrade on the banks by Oppenheimer. I speculated that the Durable Orders would trump everything else today, and it did, by a slight margin. Commodities and Energy had a bounce continuation today, with Energy leading the way. Despite the bounce, Gold and other commodity stocks may roll over at a lower high, which is why I'm playing puts on those stocks. Energy may make a little more noise than that, but I'm speculating that a couple of the energy stocks will roll over at lower highs. With Financials (Brokers, Banks, Insurance) tipping over, and Housing rolling over despite the positive New Home Sales report, it was up to Energy and Commodities to hold up the market. If we get a bad Initial Claims report tomorrow then the market could roll down another day. GDP and the Chain Deflator will effect the markets as well, although GDP should be mostly baked in to the market already. We have an Evening Star on the SPY, but all the major indexes basically experienced normal consolidation today. It's still a little iffy on a drop tomorrow, but I'm picking up puts now in case we do roll down tomorrow, especially on stocks that just made lower lows.

I dumped the DIA, SPY, Q's, and IWM calls right out of the gate this morning. They were all half-sized positions so there was very little damage there. I made 11 cents on the Q's, lost 15 cents on the IWM, lost 45 cents on the DIA, and lost 50 cents on the SPY. I also finished off PEP for a small gain of 19 cents ($190), CAH for a gain of 37 cents, and MCK for a gain of $1.07. So a net positive on all the trades in the past few days. That's what I want, even in the choppier times I want to manage as much stuff to profitability as I can, and do it as consistently as possible. I don't want to take a lot of losses in a row, or really big losses. Then when I get the bigger winners it really adds up.

I picked up puts on GG and AEM in Gold, FCX in Copper, OXY and EOG in Energy - although I swapped out the EOG for NOV, which I like a lot better (SU also looks very nice), JCP in Retail, and MHP in Media. A lot of stocks and areas rolled over a bit, like Brokers, Banks, Insurance, Housing, some Retail, and Airlines. Energy and Gas were, by far, the most bullish performers, with other Commodity stocks just behind. It looks like Energy and Chemicals (although DBA in Agriculture looks like a good put) are the strongest sectors right now, so I don't want to get too fancy with my 2 Energy puts, just get a little and get out.
Also noteworthy rollovers: PFG, SYK (although it may only go down $2), BDX, SUN, and AIG.

The most Bullish stocks right now are:
Energy: APA, SLB, DVN, WFT, RRC, MUR, XTO
Metals/Mining: CLF
Steel: MT
Chemicals: MON
Manufacturing/Machinery: CAT
Biotechs: DNA, GILD, CELG
Tech: AAPL, RIMM, ADBE, FSLR, IBM
Electronics: TYC
Retail: TIF, WMT, GME, NKE
Food & Beverage: KO, PEP
Railroads: CSX
REITS: PLD, PSA, AVB, GGP, EQR
Financials: MS

The Bullish list of stocks are what I don't want to be playing puts on. In fact, if the market takes off again in the next couple of days, I will look at calls on some of those stocks.

Tomorrow will bring what it will, so I am ready for both directions, and I'm positioned how I want to be in case we do drop for the day. We shall see.....