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The Monday morning drop in oil gave everyone targeting the XLE entry a pleasant surprise. COP, another watch list candidate also fell to our entry point. Actually, the entry point was $98 and it fell to $98.01 but I am sure anyone watching and waiting took it anyway.

The rebound from $50 oil sent shares of the rest of the candidates soaring and triggered the XOM, OXY entries on the breakout. This leaves us with a very light watch list and a weak market.

I am only adding one stock this week and that is FNM. With the continuing horror stories, the Fed still raising rates and the potential drop in home sales and defaults in mortgages they are a potential disaster. Given their huge derivative exposure a drop in volume could upset the applecart.

I don't want to add a big watch list as we enter the weakest time of the year. We currently have a large PUT portfolio and we are heavy in energy stocks. In theory we are poised to make money in both directions as rising oil should depress the markets.

Dropped Entries  

New Watch List Entries
Fannie Mae

Current Watch List

FNM - $52.84 Fannie Mae

** Breakdown Target $51.50 **
** Breakout Target $55.00 **

Fannie Mae has been suffering from numerous ailments including accounting problems and the early April rebound has failed and it appears we are about to start a new leg down. The regulator for FNM has asked for more power to dig deeper.

BUY 2007 $50 LEAP Put VFN-MJ currently $7.00

Buy Insurance Call June $55 FNM-FK currently $1.75  

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