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15 March The Daily Stock Report
The Dow30 had a mild rise on Friday and is likely to continue to move up Monday morning after Fed Chairman Bernanke’s comments on CBS 60 minutes tonight that “the end is in sight” and the US recession will come to an end “probably this year.” That comment might be worth some upside move in stocks as the Asian markets are reacting to that by going up 1-2% so far. The health stocks HUM, UNH, AET, and MGLN moved up nicely and a buy-out rumor of HUM really kicked it in gear and hit a high of $26.75. But as with most rumors, it sold off about $2 at the close. UNH followed HUM in the same manner. This group should have a slightly positive opening considering the excitement it saw on Friday and the Bernanke comments should see this group open higher tomorrow (Monday). Consider to use this positive movement to sell HUM, UNH and MGLN with a gradual selling of AET. AET, Aetna has more upside potential so this may continue moving up slowly. The insurance sector, PRU, MET, HIG, and PFG continued to move up Friday with profit potential in PRU is mostly realized. Looks like MET and HIG also have more upside and PFG looks weak. Don’t look for the short ideas on the banks on the stock list below as big of profit potential as we had in two different times in the past month. You will have to monitor it but we have to protect ourselves against the idea that we have a small pullback in bank stocks that we are short (JPM, USB, WFC, BAC) and then see this sector move to higher highs. And again, as always, build small positions relative to the total size of that account you are investing or trading with. Oil, light sweet crude oil index closed at $45.75 and it is very likely this had a significant bottom in mid February. Intermediate Trade Positions: New ideas: none Swing Trades: New Ideas: BAC, Bank of America is worth a small short position. It is likely this moves back up over $6 tomorrow in the first hour of trading and could be gradually sold short. Target price on this is below $5 in the next week or so but as always, we have to monitor this closely. Day Traders/Intraday stock ideas: Again, intraday trading should be outstanding tomorrow. You are going to see big swings with the drop and pop being the best way to handle long intraday scalps. My suggestion is to let the stocks go down hard and focus on a LONG bounce. That would be the high odds play. FSLR, HUM, UNH and continue to watch ICE, BLK, CME, POT, MON, MOS, AMZN, AAPL, FSLR, BIDU, USB, WFC, JPM and any high volume, high volatility stocks. NOTES: We are entering a cycle where we could be substantially on the sidelines because most of the high probability trade ideas have matured and profits been realized. The odds change as stock ideas mature. Doing nothing in the business of investing or trading is just as valid as making a move going long or short. So it looks like the odds are shifting toward being in more and more cash as we just harvested many long positions. J REPEAT: Many of you have emailed me with questions about not having the $25,000 to do intraday trading. You can have 3 intraday trades in a 5 business day rolling period. You can have swing trades like we have been having the last 2 weeks and make a smaller amount of money, let’s say $10,000, to build up with swing trades. Thoughts: Keep steady, calm, decisive, aggressive. Have no fear and no greed. Keep looking at what to be doing next in a calm manner. Don’t focus on the past or beat yourself up what you did or didn’t do or what you should have done. Just keep playing the next shot, which in this business your next shot could be just sitting on the sideline. 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). 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. Have a great day and I’ll talk to you this weekend. Article Directory: http://www.articledashboard.com www.tradestocksamerica.com/how-to-buy-stock.php, www.tradestocksamerica.com/stock-trading-course.php |
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