Woodshedder’s Front Porch

Happy Halloween! Save some candy for your kids!

On the open, the system will sell [[KNDI]] and Agria Corporation (ADR) [[GRO]] .

It will add Cheniere Energy Partners, L.P. [[CQP]] , the only pick for the day.

Have a great day!

The Power Dip has really taken it on the chin lately, with many positions stopping out. In fact, 5 positions stopped out on Wednesday. While seeing all of its gains erased in a few days is not an easy thing to watch, I’m not worried about anything being wrong with the system. I will have a post up before the weekend detailing what is going on, and why I do not believe there is much cause for concern. I will also look at three different ways to rank the stocks: Aggressive, Conservative, and Hybrid. I have been ranking them using the Aggressive method, which is the main reason for the big hit. Had I been using the Conservative ranking, things would not look so ugly. Of course a conservative ranking reduces drawdowns while also reducing overall returns. More on this later.

The system has  4 open positions, 2 of which are close to stopping out. This means we have room to add 6 stocks, but this may be one of those times when it pays to play things safe, and not load the portfolio up. Therefore I will be adding only 3 stocks on the open. I have been testing to find an optimum amount of positions to add per day, and 3 tests well. There doesn’t appear to be much benefit in filling every available position, if there are more than 3 available, in one day.

The GDP was just released, and it looks to be in-line with expectations, and futures have responded positively. Perhaps there will not be more positions stopping out today.

Aggressive Ranking

[[KNDI]]

Agria Corporation (ADR) [[GRO]]

[[JOEZ]]

Brown Shoe Company, Inc. [[BWS]]

Focus Media Holding Limited (ADR) [[FMCN]]

Conservative Ranking

Genesco Inc. [[GCO]]

Eaton Corporation [[ETN]]

IntercontinentalExchange, Inc. [[ICE]]

DSW Inc. [[DSW]]

Brown Shoe Company, Inc. [[BWS]]

Hybrid Ranking

Genesco Inc. [[GCO]]

[[KNDI]]

Agria Corporation (ADR) [[GRO]]

DSW Inc. [[DSW]]

Brown Shoe Company, Inc. [[BWS]]

On Monday, both Silver Standard Resources Inc. (USA) [[SSRI]] and Amylin Pharmaceuticals, Inc. [[AMLN]] stopped out. On Tuesday’s open, RenaissanceRe Holdings Ltd. [[RNR]] will be sold. These developments leave three open positions.

These 3 openings will be filled with Conseco, Inc. [[CNO]] , Lee Enterprises, Incorporated [[LEE]] , and [[TA]] .

Have a great day trading!

***Edit***

As TA is an AMEX listed stock, I will not be trading it, as these AMEX issues have been killing me with slippage. Instead, I will add Venoco, Inc. [[VQ]] , which is ranked 5th for today, with 4th being FST, which we are already long.

There haven’t been a lot of these lately, which means the criteria may need to be loosened a bit to provide more opportunity.

Today’s CWH is an old Fly favorite, Hansen Natural Corporation [[HANS]] .

Placing a stop near $36.50 beneath the recent handle low and setting a profit target near the recent high of $44.00 is one way to play this setup.

There are a total of 35 Power Dips for Monday morning. The Top Ten are as follows:
Concho Resources Inc. [[CXO]] Forest Oil Corporation [[FST]] W&T Offshore, Inc. W&T Offshore, Inc. W&T Offshore, Inc. W&T Offshore, Inc. [[WTI]] [[NXY]] Comstock Resources, Inc. [[CRK]] Canadian Natural Resource Ltd (USA) [[CNQ]] Boise Inc. [[BZ]] Goodrich Petroleum Corporation [[GDP]] El Paso Corporation [[EP]] Polaris Industries Inc. [[PII]]

As you can see, the oil complex is well-represented, which can only mean the sector is pulling back.

On Friday, [[HPJ]] was stopped out. Today, Align Technology, Inc. [[ALGN]] will be sold. This leaves two open positions, which will be filled with CXO and FST.

I encourage you to pull up charts of the dips, to see how sweet the setups are.

Have a great day!

[[ASTC]] [[AXAS]] PetroQuest Energy, Inc. [[PQ]] Affiliated Managers Group, Inc. [[AMG]] Republic Airways Holdings Inc. [[RJET]] Concho Resources Inc. [[CXO]] [[CHNG]] Stillwater Mining Company [[SWC]] Cimarex Energy Co. [[XEC]] [[GDX]]

On Thursday, Flowers Foods, Inc. [[FLO]] finally stopped out. On Friday’s open, [[ASTC]] will be added to take its place. The system is fully invested with 10 positions.