Momentum Pullback Goes Green

UBS ( lost $17b in first quarter, mostly on subprime writedowns, on top of previous losses in subprimes), C ($41 billion in subprime writedowns so far), and MER (biggest exposure of any company in the world to subprime derivatives) are cutting jobs.....what a surprise.....

UBS is cutting 5,500 jobs, MER is cutting 5,220 jobs, and C is cutting 15,200 jobs.....

Oil hit another intra-day record high this morning.

Energy up, Financials down, sound familiar? This is playing out short-term just as I warned it might. I will look to sell some of my Energy calls into any pop up this morning. I am not holding any Financials, Tech, or Retail right now. We'll see if those areas continue to pull back. Ironically, the job cutting may actually give Financials a boost in the next several days, maybe even today, we shall see.....

7:45 am MT: The overall market is down early and Energy stocks popped up at the open. So the theme is carrying out. I sold the Day Swings from yesterday on RIG (5% gain), and DVN (12% gain). I also to half profits on EXM (9% gain so far), and the DVN daily swing (45% gain so far). I locked and walked on the last of the CNX trade for an 82% gain. I am still riding SII and SLB, and parts of DVN and RIG.

8:15 am MT: I decided not to futz around with EXM any more, too much Doji-ing going on right now, so it's done with a 9.4% gain from yesterday. I continue to take profits on the way up with RIG, and I'm still riding SII, SLB, and parts of DVN. I goofed an order on AGU yesterday and sold when I meant to buy, so I ended up losing 6.4% on a half-position. It was a very small loss, but goofs are goofs, and I don't like them.

8:30 am MT: I took profits on a little less than half the SII trade from yesterday for a 28% gain so far.

8:45 am MT: I locked and walked on the last of RIG since earnings are scheduled for after the close today. This RIG trade was the Daily Swing and it netted me a 77% gain. I am also down to the last 1/3 of my DVN trade for the same reason, earnings are after the close today.

9:00 am MT: I locked and walked on the last of DVN. This DVN trade netted me a 54% gain. I am still riding partial positions on SLB and SII.

I warned yesterday that the market looked more like a Momentum Pullback than a Rollover. With the little Hammer potentially forming on all 3 major indexes, it looks like that will be the case. We shall see how the day finishes out to confirm or deny the rumor..... Financials are actually helping out with the Hammer as they get bought off the lows a bit, just as I stated could happen on the job cuts announcements. I am going to go searching around and see if this looks real or not, and see what the next play looks like it's going to be.

The strongest areas are right now are Energy, Steel, and Metals/Mining. Agriculture/Chemicals are bigger movers today, especially AGU and POT. The other Agriculture/Chemical stocks, MON and MOS (and maybe CF) look like they are putting in Bear Flags, so if the Commodity stocks roll over at lower highs, then these two will be worth looking at for puts.

The Energy and Commodity plays are starting to look very mature on the short term swing. Perhaps those areas have another day or two to rally, especially if we make higher highs. I am going to keep riding what I have, look around, and see what looks good for the next series of swings.

10:00 am MT: Energy is getting pretty extended, but I may do a little Day Swing on something like NBL, HES, or CNQ. Same story for Commodity areas, but I might do a little Day Swing on something like AGU, POT, or CLF. NYX and EMR both broke out. There are some interesting potential put plays forming up in some areas like Gold, Chemicals, and a some other areas. But I'm not interested in those just yet.

11:00 am MT: Tech is bouncing, led by stocks like AKAM (and of course AAPL). The overall market is starting to confirm that is was a Momentum Pullback and not a Rollover, just like I warned. The longer we go today in the green, the more it looks like it will end that way.

12:10 pm MT: I nibbled in on NYX calls, and I nibbled in on AGU calls earlier. As crazy as it sounds, I actually nibbled in on a small amount of MON puts.

2:30 pm MT: Trade Wrap: I took out half of the SLB and SII Day Swings (from yesterday) during the day today for a 20% gain on SLB so far, and a 32% gain on SII so far. I also took out 1/3 of my NYX Day Swing from today for a 32% gain in about an hour and a half. I picked up AGU calls later in the day, and I picked up AKAM calls just before the close.

A general note: For those of you that are wondering what it's like to finally get a good swing while the market is intermediate term bullish, just review the gains I have been posting from all the trades since last Thursday. I hit it as hard as I could, and I'm still hitting it. I would have hit it harder if I didn't work in a call center answering random calls all day. When I smell MoMo I GoGo, and I MEAN GO HARD! You may not be there quite yet, experience-wise, but you should have learned from these past several days what to do when you do have enough experience, and when you see things line up in an A to A+ type of way. You HIT IT HARD!

7:00 pm MT: Market Wrap: The Dow Hammered, and the other two majors bounced. The price action confirmed that we were in Momentum Pullback mode and not Rollover mode, just as I wrote about yesterday and this morning. This kind of bounce may lead to a quick 1-2 day jump in the markets just like the last two bounces. I am not doing a lot with puts yet, we still look like a call-trade market for another day or two. And we are Intermediate Term Bullish, although it is a little too wedgie for my liking, so 98% of my trades are calls for now, even if the market is a little tight.

Here are some Bullish stocks that might have another 1-2 days in their upswing: AKAM, HES, NYX, PCP, CLF, EMR, APA, ECA, NSC, AGU, XTO, (SLB)

Note: the Energies will probably be driven by the positive earnings from RIG and DVN, but watch yourselves on these, it may be one more day and done, we shall see.....

Here are some Bullish stocks that are bouncing with the market: AXP, LNC, (MER)

Here are some Bullish stocks that might make a move up from short-term consolidations soon: ADSK, (KSS, COH), IBM, CAT

Here are some stocks poised for a lower high (or equal high): CF, NOV, MUR, POT, GDX, (DO), MOS, MDR, ESV, MON, (ABX), AEM, (OI), (GG), (AMX), CL

Note: LM is selling off on heavy volume.

By the way, the sky is still blue, rivers still run downhill, the Earth still revolves around the Sun, and AAPL is still going up.....