The indices closed lower today in lower volume, which is a healthy sign for the market after its recent move. There was pressure on the market from higher oil prices and concerns over failed mergers of Microsoft and Yahoo, and BOA and Countrywide.

A lot of the momentum stocks that I’ve been watching and trading lately have have been from the oil and energy sectors, and many of those stocks made nice moves today as oil hit an all time high. I agree with those who suggest that a top in oil may be in soon, but no need to stand in the way now. I had mentioned that DUG, an ETF which trades at twice the inverse of the daily performance of the Dow Jones U.S. Oil & Gas index, is worth watching. I even dipped my toes in and took a small position in DUG last week that got stopped out. This is the danger of calling tops and bottoms.

Higher oil prices today turned out to be good news though for the Watchlist, as I had NOG in there. It was interesting watching this breakout this morning. It had very low volume at the open, and sat under the entry point for a little while, but it broke out strong and never looked back.

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Another stock from the Watchlist traded above the entry point, it was CEL. It gapped up considerably at the open. I usually pass on these and wait for it to retrace. It retraced, and then spent all day trading near the entry point. I passed on this one (therefore not on Past Performance page), although it did move a little higher above the entry point after retracing. I may try this tomorrow if the action is right.

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There was also some nice continuation in GNK today, a pick that triggered on Friday.

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Trade Ideas for 05/06/08:

I am expecting a general pullback in the markets shortly, and I personally think oil could near the end of its run (as mentioned above). However, I am adding an oil stock to the Watchlist. I have to trade what I see, and these charts look good. But, I plan to take smaller than normal positions with these.

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Good luck and good trading!