Momentum Trader Report: 06/03/08

It happened again. I have mentioned this proprietary indicator before. When over half my Watchlist triggers in the morning, and those stocks are making big gains, there is almost a 100% chance that those profits will disappear by the afternoon. I saw it coming, and reduced my positions. The good thing is, most of those stocks reclaimed much of their gains by the close. Before we look at those, let’s take a look at the market.

Yesterday, the 4 day rally attempt in the Dow was killed with a lower low. Today, the S&P 500 touched a lower low, and it killed the 5 day rally attempt.

The NASDAQ though is still holding up, and is in its 6th day of a rally attempt. Although it did trade below its trendline, it closed above it. Watch this index closely, as it sits at a pivotal point, and will take many stocks with it.

As mentioned in the 5/21 post, the Dow had formed a double top, and had broken its trendline. It has moved much lower since. Look for support around the 12300 area. If not…look out below.

Back to the triggers from today. The big movers today were in fertilizers, and fortunately, I had some of those in the Watchlist. There were 4 stocks that triggered today.

CMP was one of them, and it withstood the selling pressure in the afternoon and closed higher.

MOS also had a nice breakout, and held on to close higher.

POT also broke out. It could have been bought lower than the entry price listed in the Watchlist, but it closed above both entry points and is looking good here.

Now for the biggest mover today, and also a heartbreaker. VLNC had one of the better charts in the Watchlist, and it broke out early and was looking good, up over 7% from the buy point! But it gave back every single penny, closing at $4.25. If you traded this, hopefully you took some profits.

There was also some nice continuation from recent picks. Such as WDC.

AGU was a pick from yesterday that moved higher today, but having some trouble doing so.

The fed gave some encouraging words for the dollar today, saying that they are concerned about the declining currency, and do not foresee lowering rates anytime soon. This in turn brought oil prices lower. Take a look at the USO. As I pointed out last week, it appeared to be in trouble.

It looks like it’s getting ready for a date with the 50-Day MA.

Trade Ideas for 06/04/08:

No new stocks to add at this time. These two are still looking good.

Good luck and good trading!