So I’ll be honest: The market scared me a bit this week. I do not believe this is the top; I do not believe we are in for a multi-year bear market; I do not believe gas prices will be $26 by this summer (but that’s another story).

I began last week with what may turn out to be a mistake: I sold half of my biggest winner, Cleveland-Cliffs (CLF). Here’s why:

As you can see, as of May 23rd the stock had lost a lot of its steam, and I was very worried it was forming a top here. I also was just astounded at how hot commodities were, and became worried that they were too hot, considering how much I was reading about them. The MACD lines had crossed, which sometimes signals a change in momentum. Lastly, I had just hit the mythical 100% number for my CLF holdings, and doubling my money always makes me feel greedy.

Why might it have been a mistake? Well, the stock is up 13% since I sold half, which is part of the reason! So what might have prevented me from selling? First, nothing about the fundamentals of iron and coal have changed, meaning Cleveland-Cliff’s main product is still in as high demand as ever. From a technical standpoint, the RSI wasn’t throwing off warnings yet, the stock was still above its 25 day moving average, and was ripe for a bounce off of its lower trend line. Whoops!

With that cash, I bought two stocks: Occidental Petroleum (OXY), an oil play that my mom (of all people!) made me aware of, and GrafTech (GTI), who makes electric arc furnaces. I don’t pretend to understand exactly what those are, but I do know that they’re part of a supply chain that is in great demand right now, and has a solid looking chart.

And that’s when I got scared. I am very happy with my performance so far this year, and being 100% invested during this correction just seemed to risky to me. So I sold all of Google (GOOG) and Helmerich & Payne (HP). Google hasn’t done a thing since it’s major jump on earnings a few weeks ago, and HP seemed to be stalling out on me.

Our analysts here are showing just slight signs of being worried, but their recommendation isn’t to start moving into cash, but instead to just reign in buying many new stocks.

YTD Performance as of 05/28/2008: Up 13.34%
Performance since inception (04/01/2007): Up 57.8%

Portfolio Holdings

Changes

5/22/2008	SELL	Cleveland-Cliffs (CLF)	93	132
5/22/2008	BUY	Occidental Petroleum (OXY)	96	104
5/22/2008	BUY	GrafTech (GTI)	25	430
5/28/2008	SELL	Google (GOOG)	566	31
5/28/2008	SELL	Helmerich & Payne (HP)	58	252