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

ARD - another update

The reason I sold ½ of ARD earlier today was because the chart was starting to say that it was too extended (means it had advanced too quickly and was due for profit taking). So we sold half earlier and then set a stop loss (in this case the stop loss was not to limit a loss but rather to protect our profits).

Just as the chart signaled ARD started dropping on people taking profits. Our stop loss of $56.50 triggered and we locked in the remainder of our money on this trade at a little over 15%.

See how this works…

ARD

Going to sell ½ of my position on ARD here this morning.. Locking in the 16%+ profits here. Going to set a stop loss for the remaining ½ position at $56.50.. This will lock in a profit on the remainder ½ position while giving it the chance to continue to grow more.

This is how we take our winners.. Take them before they get away from us. But still give it a chance to run more.

Sell ½ ARD at $57.70 (16%+ gain locked in)

Stop loss on remainder set at ($56.50 – which is based on the chart technicals)

MTRX running well here so far. Entry was yesterday at $27.65

My chart “setup” had identified MTRX as a buy when it broke above $27.60. Yesterday it did just that and entered the FP80 portfolio at $27.65 near the end of the day yesterday.

Today MTRX is now up 5% in one day so far.

Some other FP80 holdings ARD and RGR are also doing well this morning and are in the green.

Quick Summary.... Monday June 18th, 2007

No positions in the FP80 portfolio were sold today.

This was a very low volume trading day today. Almost like watching grass grow today.

One new addition to the portfolio was made at the end of the day. Matrix Service Co. (MTRX) reached the buy point today, long at $27.65.

Portfolio holding Arena Resources (ARD) was the big winner today. Added another 4.6% to the gains already made in this. Brings us to a gain of 12.1% in just a few days.

Align Technology (ALGN) was up another 1.35% today, as was Sturm Ruger & Co. (RGR) up 0.2%.

The recent addition to the watch list; Biovail (BVF) broke out of the triangle pattern I highlighted on the chart in yellow, but notice how it failed to clear the resistance above it. This is why I chose not to play the triangle breakout. Instead we want to see this move above the stronger resistance point before we make a play in this.

Other portfolio holdings had low volume pullbacks today, all minor. All holdings are still in play. A complete run down will be posted later.

Did you notice that the Dow Jones Industrial Average chart on my public chart list showed that we would have resistance to overcome in order to resume our bull run. Last Friday it hit the resistance and pulled back, today it pulled back even more. We need to see the major indices move above their recent resistance levels in order to bring back the confidence (and the big money) that we are continuing the bull run we have been having so far this year.

More later..

FP80