The MTG Stalk Sheet
February 1, 2010

The MTG Stalk Sheet presents you with the best individual stocks that Morpheus Trading Group is stalking for potential trade entry each day, all in a concise and easy to understand format. Please be sure to read the MTG Stalk Sheet User Guide in order to understand the terminology below and to receive the maximum benefit from your subscription. Enjoy!

"FULL-SERVE" STALK LIST

We decided to dip our toes in the water on the long side late Friday afternoon. GMCR broke out to new highs on strong price and volume action on 1/28. Per intraday alert, we bought the pullback to support of the rising 20-period EMA on the hourly chart. We cut our position size down by 40% due to weak market conditions, but we are comfortable risking about 0.3% (or $300) of our account to catch a potential big move in a leadership stock. The stop is placed beneath the low of the wide ranged breakout bar on 1/28.

Broad market indices are in deeply oversold territory, so we expect some sort of relief bounce within the next day or two. Over the next few weeks we will closely monitor the price and volume action in the broad market averages for clues of a potential intermediate-term bottom.

Our weekend scanning turned up some bullish price action in big-cap biotech stocks. GILD recently broke above a long-term weekly downtrend line on heavy volume. GENZ and BIIB also cleared a weekly downtrend line, but have yet to follow through to the upside. CELG is trading in a tight range back above the 200-day MA. We'll continue to monitor the action in this group for potential entry points.

There are no new official setups for today. We will send an intraday alert if any new trades are made.

"SELF-SERVE" STALK LIST - UPDATED EVERY MONDAY (Click here to view the "Self-Serve" Stalk List section of the user guide.)

LONG WATCHLIST AND TRIGGER PRICES - (changes to trigger prices are highlighted in red)

Pullback entries - (2-5 day pullback in a strong uptrend or pullback to the 20 & 50-day MA's)

- New setups

GMCR - 85.20 (pullback to support of hourly 20-period EMA after strong breakout)

MMR - 15.81 (short-term pullback after an explosive breakout above $10.00.)

- Previous setups

- Triggered

Breakout entries - (from cup and handles, bull flags, flat bases, and downtrends)

- New setups

MNDK - 10.55 (early entry) & 11.18 (breakout from handle portion of a cup and handle pattern)

- Previous setups

- Triggered

SHORT WATCHLIST AND TRIGGER PRICES

- New setups

- Previous setups

- Triggered

Daily Stalk Summary

Below is an overview of all "full-serve" open positions, as well as a performance report on all "full-serve" positions that were closed only since the previous day's newsletter. Net P/L figures are based on the $100,000 Stalk Sheet model account size. Changes to open positions since the previous report are listed in red text below. Please review the MTG Stalk Sheet Subscriber Guide for important, automatic rules on opening gaps and stop prices:

Open positions (coming into today):

GMCR long (100 shares from Jan. 29) -
bought 85.01, stop 82.19, target (will send alert), unrealized points = (0.19), unrealized P/L = ($20)

Closed positions (since last report):

(none)

Current equity exposure ($200,000 max. buying power):

$8,482

Notes:

Per intraday alert, we bought GMCR late Friday afternoon on a pullback.

Be sure to check for earnings before making any trades over the next few weeks.

Market Conditions / Gameplan:

Markets are deeply oversold, so we should see some sort of relief bounce this week.

Market Leaders:

Monitoring the price action of leading stocks is the best way to gauge the health of the market (when the market is trending higher). Keep a watchlist of these symbols up at all times and review the price action every night after the close. This list of leaders is updated every Monday.

Current / Potential Leadership

GMCR MNKD NKTR JAZZ MMR TRGL VCI TII ALGN

Open Position Detail:

GMCR - Let's see if support at $85.00 holds. This is an 8% position, risking about $300.

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Edited by Deron Wagner,
MTG Founder and Head Trader

DISCLAIMER: There is a risk for substantial losses trading securities and commodities. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. The Company and/or its affiliates, officers, directors and employees may or may not buy, sell or have a position in the securities discussed in The MTG Stalk Sheet and may profit in the event the shares of the companies discussed in The MTG Stalk Sheet rise or fall in value. Morpheus Trading, LLC (hereinafter "The Company") is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. This discussion contains forward-looking statements that involve risks and uncertainties. A stock's actual results could differ materially from descriptions given. The companies discussed in this report have not approved any statements made by The Company. Please consult a broker or financial planner before purchasing or selling any securities discussed in The MTG Stalk Sheet. The Company has not been compensated by any of the companies listed herein, or by their affiliates, agents, officers or employees for the preparation and distribution of any materials in The MTG Stalk Sheet. Past performance never guarantees future results.

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