The Daily Stock Report Sell today with many stocks
Sep0
The Daily Stock Report Mitch King
December 18, 2008, Thursday Evening www.TradeStocksAmerica.com
No doubt that your trailing stop losses were triggered to sell today with many stocks in the sectors we have been talking about dropped 8-11% today. Even though many of these stocks are still within an uptrend, we are at a dangerous point where the market could resume its stronger and stronger sell-off as we have seen many times in the past 3 months or if the buy on dips starts to work. The stock market was only down about 50 points when the White House spokesman said Bush is considering a “controlled bankruptcy” on the US automakers. The Dow 30 closed down 219 points or 2.5% today. In a longer time line than we normally have been talking about these past months, we should be looking for a bottoming process
Intermediate Trade Positions: FXI, Xinhua 25 etf and PTR still look good to hold but SNP is clearly leveling out on the 10 day moving average and the MACD as well as the stochastics pointing down. This is clearly a sell signal for SNP for the aggressive trader. Another way of looking at technical analysis signals is for the fast moving average to cross down through the slow moving average or as on my chart, the blue –green line crossing down through the red-pink line. That is the formal sell signal but waiting for the crossover give sup a lot of profit.
In the steel sector, X, came down hard today with an 11.3% drop. Clear sell signal in all respects but your trailing stop should have triggered if you set it at 5%. SCHN is looking more bullish than the other two and watch these this next week for a long entry point. Add MT, Arcelor Mittal to your steel sector to be long again assuming the upward trend returns.
Watch K, Kellog, food and beverage manufacturer for an entry point this next week.
Consider RIMM, Research in Motion as a long purchase. This is going through a bottoming process that isn’t complete yet. If RIMM continues to go down, don’t buy it yet; wait for it to turn up on the 10 day moving average with other indicators pointing up as well on the daily chart.
REPEAT: It is surprising these stocks didn’t correct as much as the oil prices would indicate. So it is still steady as she goes with the major oil companies, XOM, COP, and CVX even though oil went under $40 today, going back to 2004 prices in oil. These stocks clearly have completed establishing the bottom from October 10, 2008 and is still a hold position. Don’t expect huge percentage profits but should be profitable on the market value increase as well as the dividends. If oil makes any substantial moves, oil stocks will move very nicely along with it—up that is.
Start watching USO, United States Oil Fund ETF for a long entry point; current price is $32.73. We have accelerated volume this last week and another couple of down days on oil should trigger a buy signal. USO will probably be one of the most profitable intermediate trades in the next year.
Swing Trades: REPEAT: RMBS, Rambus, a memory chip developer is still moving up, continue to watch and wait (the hardest behavior to do in stock investing/trading. Patiently waiting for a short entry on RMBS. Note that this is one beautiful looking “V” pattern that I’ve talked about so often these past 6 months (or for 16 years to myself!). RMBS could continue to move up but without me because the risk is too high of a sharp correction. The odds are against you to buy it now.
The coal sector stocks (FCL, ACI, JRCC, MEE, CNX) corrected about 10-11% today and sell stops were triggered. Let this sector correct and look for an entry this next week or so. If this sector breaks down, like it has been doing for 5 months, it is likely that it won’t make new lows but more of a pullback type.
REPEAT: More and more indications are appearing that this commodity sell-off is ending and when the government workings between the Treasury, Federal Reserve, Congress and the White house starts taking affect into the economy, this group, including all commodity related sectors could move up very substantially. This is definitely worth going back into on the long side after this slight pullback that is developing.
INTC, Intel corrected hard today and went down 6.5%. No doubt your trailing stop was triggered but it is still within an uptrend. I’d still wait before until Monday to consider going long again this stock. We are still looking to work this as an intermediate or at least a swing in the next couple of weeks.
HIGHLY SPECULATIVE: CPE, Callon Petroleum swing short is acting very well. The target price of $2.00-$2.10 to cover this short position was reached today when it hit $2.08 but the stock was so weak today there was no point in closing it. This one could go lower and remember another 50 cents in this low priced stock is another 25% profit. If this continues to drop, it’s your call when to cover but if it makes any sign at all of moving up, my strategy is to close a short like this that you already have a 40-45% profit on it anyway.
Day Traders/Intraday stock ideas: The drop and pop intraday trading technique is working well again giving up 2-3% on our favorite group. FSLR gave two this morning, a 2.1 and a 2.9% profit potential on the second one; RIMM 3.1% and AAPL gave a 2.6%. DSX, Diana Shipping, which has been up a lot this last week or so gave a big drop (13%) and a 7.5% pop. Look for that pattern again tomorrow as DSX will have selling pressure. DRYS, Dryships and EGLE, Eagle Bulk shippers could also be good drop and pop candidates tomorrow. If the stock market has even a slight negative opening tomorrow, this would help create bigger drops and look for the pop.
Concluding thoughts: Even though the stocks that were setting up to be intermediate long positions are still within the tolerances or channel of an uptrend, any selling of price would put them below the bottom line of that channel I’ve been talking about this week. That would tell me to stand aside before making any long or short position, other than an intraday trade. We are getting back into the pattern where intraday trades give us the highest probability chance of making money but the strategy will be to still look for buy on dips with extra caution and extra patience to go long. Since your trailing stops were hit today at some point on your long positions, don’t be in a hurry to jump back in on the long side. You should be trying to gauge if the market is continuing to tip over or is creating a buying opportunity. If and when you get frustrated or confused, step back and make no trades or positions because eventually, you will get a really good opportunity to buy. If you take all the “outstanding” high probability times to make a trade, long or short, your frequency of transactions usually decrease and your profit percentages go up, just what we want. So in times like these, best to sit aside now that we are in a wait mode after being stopped out, hopefully with some small profit this week.
Thoughts: Best odds only, be decisive, aggressive, mentally flexible, stay in position size, don’t overtrade and wait a little longer to buy and wait a little longer to sell. You will find that will make you more money on your trades. Trade what you see, not what you hope for.
Don’t trade unless the setup is there for you, then use the charts to tell you when the odds are heavily in your favor. I recommend wide stop losses when using this technique otherwise you get stopped out frequently which is expensive, frustrating and distracts you from the bigger picture of making a successful trade. Don’t force anything to work for you tomorrow, let the setups develop and then take advantage of that. Be patient the next couple of days. Stay in position sizes without letting any intraday trade represent more than 10-15% of your total account value. As you build your account, your position size percentage should get smaller and smaller to lower your risk.
Have a great day and I’ll talk to you tomorrow.
Mitch King
www.TradeStocksAmerica.com
Contents: stock trading, trading strategies, stock picks, stock market education, stock market investing course and educational stock trading videos.
Mitch King is the founder of TradeStocksAmerica.com. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Mitch King. Investment recommendations may change without notice and readers are urged to check with their investment counselors before making any investment decisions. Opinions expressed in these reports may change without prior notice. Mitch King and/or the staff at TradeStocksAmerica.com may or may not have investments in any stocks cited above before or after this newsletter is prepared. Opinions expressed in these reports may change without prior notice.
Disclaimer – Stock investing or stock trading has large potential rewards, but also large potential risk. There is risk of loss as well as the opportunity for gain when buying or selling stocks, bonds, option contracts or engaging in any strategy listed in the Daily Stock Report, The Wizard Training Course, The Trading Room and our seminar or workshops. You must be aware of the risks and be willing to accept the risks when investing or trading in any financial markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell stocks. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
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The Daily Stock Report The stock market is always moving up
Sep0
The Daily Stock Report Mitch King
December 17, 2008, Wednesday Evening www.TradeStocksAmerica.com
Even though the Dow 30 was down about 100 points today, advancers beat decliners by 531 on the NYSE which is a bullish sign. That says to me that small caps are outperforming the large caps. And that is a good sign that small caps are in charge because that is usually a period when the market does well. Either way, today’s action doesn’t mean the bull run is broken yet. This period we appear to be going into is usually the most profitable in the stock market. We have clearly been adjusting in a radical way to the business and economic cycle that is showing a negative outlook but the stock market is always moving up before the economy starts improving.
It is going to be several months whether we actually know if the bear market ends and a bull run is starting and we don’t want to be out the market before we know for sure. There is plenty of money to made during this period don’t feel like you can’t make money because you didn’t get the last bottom in stocks 2 weeks ago. We are likely to get a couple of false starts in this uptrend that it looks like we might be starting now so be patient. I realize it is a difficult transition to be patient after making large profits quickly intraday trading or swing trading for 2 or 3 days but our mindset should shifting toward the intermediate term long positions that may last for months as opposed to hours. The intraday techniques will still be good but we are now back down to the 1-3% per trade than what we saw a few short weeks ago of 5-10% profits in hours or in some cases, minutes. “Buy on dips” strategy is going to start working more often now but we know markets will correct.
We just can’t ignore the massive amount of money the FED has put into the system. Plus we have had historic rise in Treasury prices and that is not a sustainable pattern. That money is likely to come out of the Treasuries and be put into equities (stocks) to some degree, helping propping up stock prices. On a short term basis, stocks are probably overbought but longer term we are getting intermediate term strength. Remember that T2108 chart on Worden Brothers Daily charts? It shows the percentage of stocks over the 40 day moving average which is 57.7% right now. In early October 9th it was just over 1%, so that was a low (as predicted by me) but November 21, 2008 was the Dow 30 low. Don’t forget about the auto bailout which is extremely likely to be enacted in some form. This should add a little more fuel to the bull run before that gets voted in.
Only 3 sectors are in a downtrend right now out of about 40. Those are Junk bonds, municipal bonds and commodities.
Intermediate Trade Positions: FXI, Xinhua 25 etf, PTR and SNP looks like they are resting and couple of indicators are showing that on a short term horizon, they could pull back slightly. SNP moving average line is leveling out as of today, which is normally a sell signal for me. I’m treating this as a “rest” and looking for a resumption of upward trend the next couple of days.
The steel sector, X, SCHN, and AKS (and 39 other steel stocks) continue to move up nicely, following the uptrend in the moving averages and other technical indicators. It is going to be harder to trade in and out of these intermediate term long positions. It is best to set trailing stop losses on them and move them tighter if the price charts turn parabolic upward (steeper and steeper curve up).
Steady as she goes with the major oil companies, XOM, COP, and CVX even though oil went under $40 today, going back to 2004 prices in oil. These stocks clearly have completed establishing the bottom from October 10, 2008 and is still a hold position. Don’t expect huge percentage profits but should be profitable on the market value increase as well as the dividends. If oil makes any substantial moves, oil stocks will move very nicely along with it—up that is.
Swing Trades: REPEAT: RMBS, Rambus, a memory chip developer is still moving up, continue to watch and wait (the hardest behavior to do in stock investing/trading. Patiently waiting for a short entry on RMBS. Note that this is one beautiful looking “V” pattern that I’ve talked about so often these past 6 months (or for 16 years to myself!). RMBS could continue to move up but without me because the risk is too high of a sharp correction. The odds are against you to buy it now.
The coal sector stocks (FCL, ACI, JRCC, MEE, CNX) are still acting quite well and this long position is still a hold until it breaks down and hits your trailing stop loss. This sector looks like it could continue for some time but maintain trailing stop losses of 5%. Make sure you don’t get too heavy in the sector. More and more indications are appearing that this commodity sell-off is ending and when the government workings between the Treasury, Federal Reserve, Congress and the White house starts taking affect into the economy, this group, including all commodity related sectors could move up very substantially. This is definitely worth some money to go long.
INTC, Intel corrected today and look for the upward trend to continue after a couple of slightly negative days . Consider this long as a swing or intermediate after a slight pullback.
HIGHLY SPECULATIVE: CPE, Callon Petroleum is still correcting and should continue. Target price of $2.00-$2.10 to cover any short.
Day Traders/Intraday stock ideas: There was a shallow drop and BIG pop in FSLR today with a $19 move up or 12% on the pop. Same with AMZN but only a 3% pop. RIMM had a good intraday trade on the second bottom, the first one was only a 1.2% and the second was over 3%. Try changing your intraday charts to 5 minutes to smoothen out the herky jerky motions the 1 and 3 minute charts still have. Tomorrow we should see a similar pattern but a bigger drop with a smaller pop.
Concluding thoughts: REPEAT: More and more sectors are turning up and developing an uptrend. This could be the move we are looking for that will be potentially large profits with intermediate term moves (weeks to months). We are not too late for intermediate trades and it is time to be more aggressive but not overly weighted in any specific stock position. This takes a lot more patience to detect and stay with an intermediate long position and is a very different discipline than what we have been working with in the last several months with mostly intraday trades, then swing trades that last a couple of days and now the hold periods are lasting longer. It is a lower maintenance type of trading technique but a trailing stop loss is absolutely necessary for intermediate positions.
Thoughts: Best odds only, be decisive, aggressive, mentally flexible, stay in position size, don’t overtrade and wait a little longer to buy and wait a little longer to sell. You will find that will make you more money on your trades. Trade what you see, not what you hope for.
Don’t trade unless the setup is there for you, then use the charts to tell you when the odds are heavily in your favor. I recommend wide stop losses when using this technique otherwise you get stopped out frequently which is expensive, frustrating and distracts you from the bigger picture of making a successful trade. Don’t force anything to work for you tomorrow, let the setups develop and then take advantage of that. Be patient the next couple of days. Stay in position sizes without letting any intraday trade represent more than 10-15% of your total account value. As you build your account, your position size percentage should get smaller and smaller to lower your risk.
Have a great day and I’ll talk to you tomorrow.
Mitch King
www.TradeStocksAmerica.com
Contents: stock trading, trading strategies, stock picks, stock market education, stock market investing course and educational stock trading videos.
Mitch King is the founder of TradeStocksAmerica.com. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Mitch King. Investment recommendations may change without notice and readers are urged to check with their investment counselors before making any investment decisions. Opinions expressed in these reports may change without prior notice. Mitch King and/or the staff at TradeStocksAmerica.com may or may not have investments in any stocks cited above before or after this newsletter is prepared. Opinions expressed in these reports may change without prior notice.
Disclaimer – Stock investing or stock trading has large potential rewards, but also large potential risk. There is risk of loss as well as the opportunity for gain when buying or selling stocks, bonds, option contracts or engaging in any strategy listed in the Daily Stock Report, The Wizard Training Course, The Trading Room and our seminar or workshops. You must be aware of the risks and be willing to accept the risks when investing or trading in any financial markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell stocks. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
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The Daily Stock Report Intermediate Trade Positions
Sep0
The Daily Stock Report Mitch King
December 14, 2008, Sunday Evening www.TradeStocksAmerica.com
The Dow 30 opened down on Friday morning and rebounded right from the open. This is clearly a bullish sign and the fact that the futures are up tonight along with the Asian markets even with the news that the White House says deal with automakers is not imminent. Just a couple of weeks ago, this headline would have the S&P futures down sharply so the market is getting immune to bad news and appears to be moving up in spite of such negative economic headlines.
Most stocks opened down at the open Friday and surged up sharply with some moving over 20% off that bottom on the news that the White House is considering extending bridge loans to the US automakers until the Senate gets a package deal they can agree on. They didn’t sell off much as they used to in past weeks and this is another sign that the market wants to go up.
The financials corrected nicely at the open and WFC and JPM dropped further than expected and didn’t rebound as much as other stocks. This swing short position is over, no further benefit.
The ag-chemical stocks MON corrected hard with no bounce and MOS had a lesser correction. These swing short positions have been completed and have no further benefit.
We are at a point in the market where the odds no longer favor short position and that we are entering “no man’s land” lasting at this week but at some point, the market is going to try to come to grips with further negative economic news and headlines like unemployment rising, more earnings forecasts being lowered, a new topic of economic fear like credit card losses, or the Fed panicking with lowering interest rates to .50%, or whatever. It is still not convincing that the market can have a sustained uptrend for a couple of months that may be starting now, in light of the overwhelming negative global economic situation.
Intermediate Trade Positions: These three intermediate long positions are still looking good, FXI, Xinhua 25 etf, PTR and SNP. Even though oil dropped, these stocks rebounded strongly off their Friday morning opening prices and are holding the uptrending technical indicators including the most important indicator, the fast moving average.
The steel sector has been very strong lately and should be noted that there may be a possible opportunity to go long this sector after a substantial pullback in the coming week or two. Start setting alarms for prices to alert you after a 15% pull back from here on X, SCHN, and AKS.
Swing Trades: The shipping stocks DRYS, Dryships, EGLE-Eagle Bulk Shippers, and DSX, Diana Shipping corrected nicely at the market open on Friday and that was the low price of the day. If you didn’t cover at Friday morning’s opening prices and are still short, these are likely to open higher slightly on Monday and they could go either way with a slight bias toward the downside.
The housing stocks such as DHI, CTX, TOL, PHM, LEN, are still in a corrective phase. Look for another 10% in this group on the short side.
The life insurance sector (HIG, PRU, MET, LNC, PFG) should continue the selling for several days or more but watch for any bullishness that may tell you this group may want to stay up and move to higher highs.
The coal sector stocks (FCL, ACI, JRCC, MEE, CNX) really acted strong Friday and could be another commodity sector starting to show signs of at least a countertrend rally within a bear market. Normally we would look for the oil to lead us out of the historic commodity sell-off since mid July 2008 but that seems to be on its own track.
FCX, Freeport McMoran still looks weak and the odds are good that FCX continues to sell off.
AMZN, Amazon.com didn’t correct much on Friday at all and responded very strongly to the buying we saw after Fridays open. AMZN has been very responsive to any buying so this one still belongs in the intraday long category as a “perky” stock along with AAPL, and FSLR.
Repeat from above: JPM and WFC corrected nicely and this short position is over with no further benefit.
SKF, Ultrashort Financials ETF peaked at $141.05 on Friday which it reached shortly after the open when stocks were down (Remember when you buy SKF, you are short the financial sector stocks). SKF capitulated by moving up sharply and reversed sharply. No further trade in SKF now.
Day Traders/Intraday stock ideas: Continue the drop and pop stocks like AMZN, FSLR, RIMM and AAPL. There may be a shallow pullback with a strong move upward on the pop.
Concluding thoughts: The stock market is looking like it is responding to more good news than it is reacting to bad news making the bias with our trades toward the long side. We could be starting a longer trend up with sectors that were badly hurt related to commodities. Steel, metals, mining, building materials, heavy construction stocks are acting surprisingly strong, considering how negative the news still is with the economy, housing and credit problems. The next couple of days may be a good time to take a rest from the market as we are entering a point where the odds do not heavily favor either way.
Thoughts: Best odds only, be decisive, aggressive, mentally flexible, stay in position size, don’t overtrade and wait a little longer to buy and wait a little longer to sell. You will find that will make you more money on your trades. Trade what you see, not what you hope for.
Don’t trade unless the setup is there for you, then use the charts to tell you when the odds are heavily in your favor. I recommend wide stop losses when using this technique otherwise you get stopped out frequently which is expensive, frustrating and distracts you from the bigger picture of making a successful trade. Don’t force anything to work for you tomorrow, let the setups develop and then take advantage of that. Be patient the next couple of days. Stay in position sizes without letting any intraday trade represent more than 10-15% of your total account value. As you build your account, your position size percentage should get smaller and smaller to lower your risk.
Have a great day and I’ll talk to you tomorrow.
Mitch King
www.TradeStocksAmerica.com
Contents: stock trading, trading strategies, stock picks, stock market education, stock market investing course and educational stock trading videos.
Mitch King is the founder of TradeStocksAmerica.com. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Mitch King. Investment recommendations may change without notice and readers are urged to check with their investment counselors before making any investment decisions. Opinions expressed in these reports may change without prior notice. Mitch King and/or the staff at TradeStocksAmerica.com may or may not have investments in any stocks cited above before or after this newsletter is prepared. Opinions expressed in these reports may change without prior notice.
Disclaimer – Stock investing or stock trading has large potential rewards, but also large potential risk. There is risk of loss as well as the opportunity for gain when buying or selling stocks, bonds, option contracts or engaging in any strategy listed in the Daily Stock Report, The Wizard Training Course, The Trading Room and our seminar or workshops. You must be aware of the risks and be willing to accept the risks when investing or trading in any financial markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell stocks. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.
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How To Buy The Best Stocks
Jul0
Although it may seem obvious to most stock market traders there are a number of simple rules that you can follow which will ensure that you have more success when buying stocks:
In the USA stock market there are 3 major indexes which are each made up of a basket of stocks, they are the S and P 500 (also known as the S&P500), the DOW 30 and the Nadaq 100. These stock indexes generally only contain major blue chip stocks, as long as you buy from these 3 groups you will at least know that you are getting a well known solid stock.
For example the DOW30 contains major industrials and large multinational stocks such as Home Depot (HD) and Johnson and Johnson (JNJ) whereas the Nasdaq 100 mainly contains techical companies such as Apple (AAPL) and Miscrosoft (MSFT).
Always buy a stock that is liquid, this means that it is a highly traded stock, this will enable you to quickly buy and sell at the price you want without having a delay. You will also get a smaller spread, thats the difference between the BID and ASK price of the stock. For a stock to be considered highly liquid it should trade at least 500,000 shares per day, ideally even more.
It is best to avoid stocks that are bellow $10 as this usually means the company is in trouble, although with the bear market of 2008 there have been a lot of good stocks at bargin prices between $5 and $10. Avoid buying a stock below $5 at anytime.
Another consideration to make is options, does the stock has options?, this will be important if you want to trade options around your stock, such as a covered call, or you may want to buy a PUT option in order to protect your stock.
Be very cautious about buying a stock just before it’s earnings release, stocks often drop significantly if you come out with a poor report. Earnings are released 4 times a year with one of them being the annual report.
If you are going to trade options make sure that you learn how to trade by getting some good education. There are many swing trading strategies that work well with stocks in todays volatile markets.
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