Commodity and Energy Stocks Sell Off

7:45 am MT: I stopped out of part of the ANR calls, and I'm getting ready to stop out of the rest. Everything else is still in my zone, so I'm just watching the rest for now.

8:00 am MT: Gary caught something that I missed, and that is the X had earnings this morning. I actually checked my earnings calendar yesterday, but I missed it. Very key mistake that I made, and it looks like it affected ANR and RIO. X beat earnings, but traders are selling it a bit right now as they sift through the report. I am out of ANR for about a 1.40 stop loss. I have a pretty good cost basis with RIO and X, but I will look to dump those later in the day if they don't move. PH and CAT look fine, especially PH. SLB is possibly headed down towards the lower end of my support zone in the 98 area, where I will pick up the other half of that trade. The X earnings was a key oversight, and I'm paying for it right now.

8:30 am MT: I stopped out of ANR for a 45 cent loss. It was minimal, but I am correcting my mistake with X right away, which was getting in the day before earnings on a stock that could - and did - affect the entire Steel and Metals/Mining area. Now I am only sitting on a half-sized position on X and watching to see where it goes. The other sectors I'm trading look fine.

8:45 am MT: I stopped out of X for a 2.27 loss on half a position. The X mistake cost me about 3 dollars total on the three metal trades. When I have a goof like that, I just start looking for as clean an out as I can get. But traders didn't give me one because they are continuing to unload the Chemicals, and X didn't do enough to get them to stop doing the same thing to all the Metal areas. So Steel, Metals/Mining, Chemicals, Copper, and Coal are all getting dumped. Because it was such a momentum trade, and we live in a dog-pile world, I'm not going to try and cherry pick the short term bottoms in those areas. In fact, it looks like Chemicals are headed towards an intermediate term consolidation, so they are probably done for awhile.

9:00 am MT: SLB is trying to turn around intra-day, so I am picking up the other half right here and placing a stop a couple of dollars below. CAT is a little squishy, but as long as it holds 80.00 I'm fine.

10:30 am MT: I picked up some calls on RIMM and ADBE. I'm not super excited about the market action today, so I'm not doing anything else on the call side. I'm thinking about dumping my SPY calls (half-position) if we can't get above 1,400 on the SPX later today. I like what I have right now, except for the SPY calls.

1:00 am MT: The SPY fought off a Bear Flag on the 30m charts and is swinging up a little intra-day. The Nasdaq is really carrying things, with big tech, like AAPL and RIMM pushing things north. I am already up over 1.50 on the RIMM calls, which cuts into the loss on the Metals earlier in the day. It really cranks my noodles when I goof the earnings reports like I did with X today. I have two redundant backups on all my data (charts, options, and news), and I'm careful to make my checkdowns. But every now and then I forget to check the backup info, and all it takes is a whammy like this morning to remind me. It's good to deeply internalize the lesson, and then it's good to move on. If I stewed on it too long, I would have missed the nice RIMM entry. This was probably an instructional lesson for you on how to handle a screw up, or a failed trade, learn from it, and move on.

7:00 pm MT: I did end up dumping the SPY calls for a 38 cent loss on a half-position. It was minimal, which is the way I like to keep the losses. I am not a big fan of how CAT looks today, but since it's a half position, I'm looking for the other half in the 80.00 - 81.00 area. RIMM and ADBE look good. Big Tech looks good, with AAPL, GOOG, and IBM helping out. I like IBM and may play calls on them tomorrow. I will go through a bullish and bearish list of stocks I'm interested in tomorrow (besides what I'm in, and including what I got in today), but keep in mind we have the Fed, then the ISM Thursday, and the Jobs Report Friday. I still think the primary focus of traders is shifting to the Jobs Report, so the Fed may be somewhat of a non-event tomorrow, we shall see.....

Bullish: RIMM, ADBE, IBM, FDX (breakout with a little volume), TYC (bouncing), NYX (trying to break out of a Symmetrical Triangle), CHRW (Pennant after a Bullish Gap)
Note: the Casinos are coming to life with LVS and WYNN, but MGM is still dead. Also, some Oil stocks look pretty good on the pullbacks like SLB, HES, and SWN.

Bearish: STT, (MET), GME (Head and Shoulders Top may be forming), MDR (big Bear Gap on heavy volume).

Chemicals, Steel, Metals/Mining, Agriculture, Copper, Coal, and a lot of Energy stocks got thumped today. The way the charts look, we may get one more thumper tomorrow, and then it may finish selling short term. So traders basically dog-piled out of Commodity and Energy stocks, and they may dog-pile tomorrow. As with any undisciplined or frenetic behavior, it usually finishes out sharp and quick. I don't know the future, but it wouldn't surprise me to see some traders dumping like there's no tomorrow, only to sell right into a short-term bottom. However, It does look like most Commodity and Energy stocks will have a tough time making a higher high from here, and those sectors are probably headed towards Intermediate Term consolidation. There are some stocks that could go back and make equal highs, or even higher highs, but I would be surprised if the majority of the Commodity and Energy stocks could bounce in the next day or two and shoot right back up to higher highs. The selling in the past several days may be due to Rising Dollar Risk as much as profit-taking. Traders are anticipating the Fed to signal the end of the rate cut cycle tomorrow, which might strengthen the Dollar a bit, and reprice Commodities (which are priced in Dollars). That means that leadership (what there is of it in this choppy market) may be shifting to Big Tech, Retail, maybe some Financials, and maybe a few other smaller areas.

I am Intermediate Term Bullish on the market right now, but all it will take is a bad Jobs Report and a sell-off short term to get me to shift back to Neutral. So I'm not Bullish but some spectacularly large margin, and I'm ready to take some puts tomorrow or later this week if the signals are there.