4 Stocks I'm Watching Closely On Monday

Welcome to Monday morning! Over the weekend, I had the privilege of attending a summit meeting of a group consisting of many of the world's top minds in market analytics, trading, and macroeconomic theory in New York City. The discussions were wide ranging, from the impact of future terrorism on the markets to bid/ask micro structure. Talk about a stimulating great time! Here's my strategy for today:

The DJIA

My system went short the DJIA on Friday. It took two entries to catch the wave at the breaking of the lower channel line of 10597. The first entry was quickly stopped out as the Dow flipped back into the channel, the second entry at the lower channel line is currently profitable and I am holding into Monday's open. Short

Oil

My Texas tea / black gold trade remains underwater. The final fifteen minutes of trade Friday spiked up about 50 cents causing the shorts to be negative by 62 cents. Over the weekend, while discussing this trade, I heard "why are you bucking the trend" and " don't you know so and so at XYZ firm is predicting $80.00 plus oil soon?" As far as bucking the trend, it's my contention that the vast majority of the commodity trading public, by default, are trend followers--hence they buy at the top and sell at the bottom. Presently, the public bullishness is at unprecedented levels and the market can only survive by tricking most traders into extreme bullishness at exactly the wrong time. I answered the so-called famous analysts being bullish comments by stating that even though these analysts often have better quality information than the rest of us, being people, they are still highly influenced by their firm's positions and the general sentiment of the times. I take their prognostications very lightly, never allowing their undue influence to effect my decision making. On the plus side for my oil shorts, I learned of the pending new Kazakhstan oil pipeline network. Total oil reserves in Kazakhstan are estimated to be at 5.4 billion barrels and the new pipeline project (if completed) will be a major shot in the arm for worldwide oil supplies. However, there are many issues plaguing this project. We will see what happens! Short

The Dollar

Presently the EUR/USD pair is oscillating at 1.2334 maintaining about 100 pips of profit on our long entry at 1.2233. My bullish outlook for the pair and bearish current view on the dollar remains intact. Long EUR/USD, Short Dollar

US Equities--My watch and active trade log

GOOG: Yes ! My short entry last week at 298.10 became profitable on friday with GOOG closing down 5.38 points at 292.35. I can not stress enough how this stock gives me end of the internet boom flashbacks. I am maintaining my strong bearish bias on this one. Remember, GOOG is extremely volatile, trade with safe size in case our analysis is wrong. Short

GM: This one is still not performing as expected. I am giving it untill friday to react before replacing it on this list. Flat

BOOM: After capturing a nice move last week and going flat, Boom has been slowly giving back some of the advance. I am staying flat here until the next impetus to enter. Stay tuned, this is a fun one! Flat

DNA: The long position continues to move against me at this time. I am going it give it a little more time to play out before closing. Long

See you Tuesday!

Best wishes in the markets!

Dave G

David S. Goodboy (marketsurfer) has been trading professionally for over 14 years. Mr. Goodboy trades ETF's, stocks, index futures, energy futures and options. His primary focus is a unique multi-time frame index trading system based on a combination of time/price cyclical studies and statistical models. David was a trader/partner with Biltmore Capital, traded with an option arbitrage firm, and is currently in the launch stages of IntrendX, a global multi-strategy fund.