The MTG Stalk Sheet
May 20, 2008

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

There are no new setups in the pre-market today. Yesterday's ugly afternoon reversal puts us in a more defensive mode with our open position management. We will continue to monitor leading stocks for distribution. If leading stocks and broad market indices come under heavy selling, then we will quickly go to cash and look to establish a few short positions.

"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

SMS - 35.36
ILMN - 78.60 (triggered 5/19)

Breakout entries (from cup and handles, bull flags, flat bases,and downtrends)
JASO - 27.11
BDE - 24.90
BRY - 55.51 (triggered 5/19)
ACI - 65.80 (triggered 5/19)
SLB - 106.11 & 107.35 (triggered 5/19)
APD - 103.11 (triggered 5/19)
XEC - 70.92 (triggered 5/19)
CAT - 84.60 (triggered 5/19)

SHORT WATCHLIST AND TRIGGER PRICES

New setups
HRZ - 10.45
CMG - short bounce to 93.00
FDP - 30.79
HWAY - 29.55
---------------------------------
LFG - 29.89
HUM - 42.59
CI - 39.31

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:

Open positions (coming into today):

81.94

unrealized P/L = + $397

84.26

unrealized P/L = + $289

37.95

unrealized P/L = + $254

16.11

unrealized P/L = + $194

Closed positions (since last report):

net P/L = + $1,864

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

$39,020

Notes:

Per intraday email alert:
- Sold SOL into strength for a + $1,800 gain.
- Bought FEED off support of the 50ma.
- Added 50 shares to our position in V over the tight two day range.

Market Conditions / Gameplan:

We plan to lay low over the next few days and see how this market pulls back from the swing highs. We should see some quality pullback setups develop.
Market Leaders:
- Monitor leading stocks for potential heavy volume distribution (which could be defined as closing 4-5% down on volume that is at least 200% greater than the 50-day moving average of volume). Sudden distribution in leading stocks is often one of the first indicators of a market top.
Open Position Detail:
- BMRN - The breakout has been steady, but not impressive. We lowered the stop to just under 38.
- V - Note the split stop above.
- DE - Dropped 3% on heavy volume. Trailing a stop just above the two day high.
- FEED - We placed a breakeven stop, as we do not want to see yesterday's bar fully retraced.
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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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All Rights Reserved

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