Market is Quiet But Energy and Commodity Stocks are Hot

Durable Orders came in better than expected, and Oil futures are down a little pre-market, which is giving the stock market an early boost. The Naz is up a little stronger than the other indeces. I am planning on selling the RIMM and IBM calls right into the open, if those two stocks gap up a little. I may buy them back later if they float back a little.

7:50 am MT: I sold IBM at breakeven, although I left a little money on the table. I stopped VRSN for a .38 cent loss. I sold RIMM for a .95 gain, or 9%. I sold CLF for a 1.00 gain, or 14%. And I sold KLAC for a .39 cent gain, or 16%. I may re-enter IBM and CLF, but I will wait to see how they form up. So far, it has been a nice two days of trading.

8:25 am MT: I sold all three Energy stocks for a total gain of $400.00 or about .20 cents per trade. I am going to come back and look at Energy after the reaction to the Oil Inventory Report.

1:40 pm MT: Here is a summary of what I have done today after the last post. I culled AET at breakeven because I have too many trades going, I'm about to do the same with AMZN. I think those stocks have more room to move, but I'm loaded up on Energy and Coal right now. Which brings me to what I entered: I picked up calls on BHI, NOV, WFT, and PXP in Energy, and MEE and BTU in coal. I also picked up RL on the breakout. I have a lot of trades going right now and the Energy trades are making big bucks (I'm up about 4k in my account on the day), so I'm focusing more over in that area.

1:50 pm MT: I also picked up X, DO, and HAL before the close. I finished the day up almost 5k in my account. It's been a nice couple of days, but the best gains have been in Energy and Commodity stocks. The rest of the market is basically sloshing around right now.

6:30 pm MT: Throw a dart at your Energy and Commodity stock watchlist, chances are that you will hit a stock that bounced today. Here is a list of some of the big bullish movers in those areas today: remember to check the option spreads, look for .10 - .30 cent spreads.

Steel: CLF, RIO, AKS, GGB, X, SID
Coal: ANR, ACI, WLT, MEE, BTU, CNX
Oil Shipping: DRYS, GNK, TDW, EXM
Energy: CSIQ, UPL, BHI, OXY, MUR, ESV, RDC, WFT, NE, NOV, NBL, APC, DO, WMB, PXP, HAL
Aluminum: AA
Copper: FCX

Also bouncing: Chemicals, Manufacturing/Machinery, Lumber

Also: RL (breakout on huge volume), SOHU and IBM (followed through on yesterday's bounce), VIP (bounced), MA (bounced), FWLT (bounced), NIHD (followed through on the bounce), LTR (bounced), GD (bounced), MBT, FLR

There were a few other stocks that were noteworthy as well, but these one's, especially the bolded stocks, really caught my attention.

Today was one of those days where you run out of money long before you run out of ideas.....The bounce in Energy and Commodity stocks will continue to be a crowded trade (see: "desperate bullishness"), so it could have legs for another couple of days. It may not finish out until next Monday or Tuesday, but I will be taking partial profits a lot sooner than that.....

Remember, remember, remember, the overall market did diddly squat.....don't get too excited about areas that don't have Energy or Commodities in the prefix description somewhere. I'm in a few calls outside those areas, but 95% of what I'm doing is in Energy and Commodities during this swing. In fact, I'm really hoping the Dow can get back to 12,700 so I can load up the truck with some DIA puts.....

Christine reminded me of something important to pass along for your strategizing tomorrow. The Oil Inventory Report is due out at 10:30 am ET (8:30 am MT). It was delayed one day due to the Holiday. I am nicely profitable on the Energy trades, and was planning on scaling out of some of my Energy positions tomorrow morning anyhow, but the report is all the more reason to lock down about 1/4 of your position size and bring your stops up to breakeven. For those of you who aren't in Energy stocks yet, you can still watch the morning price action, if it gets too hot, you may wait for the Inventory Report (1 hour after the open) and see if you get an intraday pullback that holds before entering. However, we will have to see a pretty huge inventory buildup in order to kill the current swing. My guess is that the Big Money jumped on board today because they still like the fundamentals in Energy, we shall see.....