Marketing Article | 03 Mar The Daily Stock ReportMore Than Articles

03 Mar The Daily Stock Report

The stock market stalled today with the Senate testimony of Federal Reserve Chairman Ben Bernanke and Secretary Treasurer Geithner as investors looked for positive clues about the economy and the effectiveness of the stimulus and banking plans.

We didn’t get the big down day with high volume that we wanted to give us the high odds bottom to start buying stocks long but we should know in the next couple of days if we get that. In the meantime, if the market doesn’t give us a decisive bottom stocks could start creeping up slowly instead of rebounding up sharply like the overstretched bungie cord.

Most of the banks still drifted lower and note we could see BAC and WFC make a decent rebound if they drop further first. Watch these two as the first to rebound.

REPEAT: Banking stocks followed through with their declines as forecasted with WFC, Wells Fargo dropping another 10.4%, BAC down 8.1%, USB down 8.4%, JPM down7.4% and C down 2% (no position in C). Two out of the six bank stocks that were short sales were covered today, WFC and BAC. The remaining four have more downside left with JPM and KEY looking like tomorrow is the right day to cover.

Oil was up 2% today.

Intermediate Trade Positions: New ideas: Most of the banks still drifted lower and note we could see BAC and WFC make a decent rebound if they drop further first. Watch these two as the first to rebound. Consider buying gradually small positions long and for the more conservative investor, you could wait until they start moving up before buying.

GE, General Electric, is ripe for a rebound even though this stock normally doesn’t move much. Gradual buying in small increments would be smart.

OEX, S&P 100 is getting close to being a buy; this is a good index to trade options. The spread is tighter with higher volume which gives you higher liquidity. Make sure you expiration month is at least several months out.

Swing Trades: New Ideas: HUM, Humana Health is worth a small position long as well as UNH, United Health Group.

Day Traders/Intraday stock ideas: Excellent intraday trading today and likely to continue tomorrow. FSLR, First Solar is moving up so the drop is likely to be shallow with a bigger pop. Continue to watch ICE, BLK, CME, POT, MON, MOS, AMZN, AAPL, FSLR, BIDU, USB, WFC, JPM and any high volume, high volatility stocks.

Notes: The market still wants to react to positive news, as if to look for excuses to buy and speculate on a bull run.

I am still expecting some sort of substantial rally in the stock market sometime this year mostly driven by the massive stimulus that has already been poured into the system plus the planned stimulus package being proposed now. Longer term though, in a couple years down the road, no doubt the taxpayer is going to have to pay for such the high debt amounts that the US government (and other countries) have taken on. So tax rates probably will rise in coming years, interest rates will very likely have to rise as inflation surfaces and likely the bear market resumes sometime down the road. But we don’t have to be stuck in a miserable cycle like most investors. With the techniques and approach to the market, we will still thrive.

If you have been uncomfortable shorting stocks, which most people are, learn to get used to it, this will be a useful tool in the coming years.

When I list several stocks from the same sector, like the housing industry for example, don’t short all of them unless you are well diversified and it represents a small percentage of your total stock account (in that same account).
REPEAT: Keep an eye out for biotechs; they are building momentum and often do well in January.
SWI (SWING): 2-7 days INT: Intermediate term position 8 days to several months. Open Price: price paid on opening long position or price sold on short position. Bold notes on table above represent changes from previous day.
Current positions are highlighted in yellow. Green colored lines are next probable positions to consider. Red, take action or watch closely.

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. Intermediate and swing trades are really important to have trailing stop losses set.
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. Don’t force anything to work for you, let the setups develop and then take advantage of that. Be patient. Stay in position sizes without letting any intraday trade represent no 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.

About the Author

For more tips and information about day trading strategy, please check: www.tradestocksamerica.com/stock-trading-course.

Author Profile: Mitch_King

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