A rough day

We started the day with MTRX issuing a guidance warning statement before the market open. Here is the story:



http://biz.yahoo.com/prnews/070620/law053.html?.v=101



This news is what caused other short term investors, and long term to take their chips off the table. They knew there would be short term volatility due to this and traders want to keep the money moving.. "dead money makes no money". The long term prospects for MTRX are still good in my opinion. But what happens here is that investors, hedge funds, big money, retail money, etc.. do not want to wait around for the stock to recover. So they sell out quickly and move their money into another play. So we have to do the same thing. Remember that the most important aspect of stock trading (short term swing trades or long term buy and hold) is to protect your capital and control your loses. And that is what we had to do. The stock took a dive soon after the market opened and there was nothing to do except to get out as quick as possible. Which is what happened because I had a stop loss already in place which sold my shares automatically when it dropped. I took a 6.2% loss on the MTRX trade.



Later in the day I sold 1/2 of the ARD position for a 16% gain. And then I set a sell stop at $56.50 on the remaining 1/2. The idea here was that I would give some room to ARD to keep going but with the broad market sell off later in the day the stock price began to fall. The sell stop sold my shares automatically at $56.50 and protected my gains. So the remaining 1/2 provided a 15% gain. And after I sold my shares the price kept dropping. But I was already out with my profits.



The remainder of the FP80 portfolio holdings are all still 'in play'. All are still green with the exception of HGRD which is now about 2% below the buy point. This is not a reason to sell yet. The pain is not so severe with HGRD that it requires it to be sold. Tomorrow we may see the broad market recover some and them HGRD would also rebound some. So we still have a play in HGRD and we will watch it closely (as we would do with any stock that is near a stop out point). The other holdings are still nice and green and we will keep watching them. The FP80 portfolio is still in a nice profit after only 3 weeks of starting the new portfolio for the board here. If the broad market sell off today continues and brings down all sectors even more then we will sell some of the other holdings and lock in the profit.


As the DOW chart has been indicating on my public charts list we need to see the DOW move above resistance in order for us to resume our bull market rally. Right now we're in a gray area.. somewhere between bull and bear. That is why I have the yellow flag up.


But in all types of markets there are plays out there. Just harder to find sometimes. But I'll keep looking!

So why did investors and traders leave the table early today and take their chips with them? It started with those pesky bond yields again. The 10 year note yield went back up again today to 5.14%. Remember that when bond yields go up the stocks usually will go down. And then the financial sector was hit with news that Bear Sterns may be closing shop on some mortgage funds.. More spillover crap from that whole sub-prime lending debacle. So this news sent worries through the financial sector.

So there it is for another day.. More later

"May the Bulls be with you"

FP80