Daily Stock Report Results

“swing short ideas with the coal stocks [FCL, CNX, ACI]…”

The December 3rd close (next day) for FCL, Foundation Coal, was $12.32 and drifted lower to a low of $9.96 for a potential profit on this swing short trade of 23.7%. 
CNX dropped too for a potential profit of 21% in two days.
ACI, Arch Coal dropped and gave a potential profit of 21% on this short position.

“The market is in a vulnerable situation where we could see a trap door open under the market’s feet and stocks could start falling again this week, just like we saw on November 4, 2008.”

The next day the Dow 30 had the 4th largest point drop in history, dropping 679 points or 7.7%.  It was a ratio of 80 shares being sold to every 1 share being bought and a 12 to 1 declines vs. advancers.   The Nasdaq Composite dropped 9% that same day along with the S&P 500, which dropped 80 points or 9% as well.

“We are setting up for another countertrend rally which means a bull run within a long term bear market.  The last rally we went long was the October 28th through the November 4th top and then short for a couple of days but it has been heavy selling since that point.  We want to look for signs of a climactic sell-off with very high volume in individual stocks and indices.  We want to see those bids continue to drop like we saw today.  Stock prices really don’t make sense at this level because any metric that is used to evaluate price is irrelevant.  The market is irrational despair at this point.”

“It is time to go to your highest quality stock list or your own favorites to buy long.  I’ll stick my neck out and say that tomorrow is probably the right day to start building long positions with no leverage or heavily weighted positions in sectors or in one stock.   Tomorrow should be an outstanding opportunity for intraday trades on the long side and if the market drops early in the session, the bounce will even be more powerful.  It is very likely we hit a multi-day bottom for an excellent opportunity for swing trades long.”
                                              
Stocks to consider buying long for intraday and/or intermediate long positions tomorrow:
*Starred and bold are favorite daily chart patterns.

MA                  Mastercard
V                     Visa International
KO                  Coca-Cola
PEP                Pepsi
SLB                Schlumberger
*DD                 Dupont
*DOW             Dow Chemical
BP                   British Petroleum
COP               Conoco Phillips
CVX                Chevron
WMT               Wal-Mart
PG                  Proctor & Gamble
*K                    Kellog
*BAC              Bank of America
*WFC             Wells Fargo
**JPM             JP Morgan
*GS                 Goldman Sachs
AXP                American Express

XTO                XTO Energy
X                     US Steel
GMXR            GMX Resources
*FCL               Foundation Coal
*ACI                Arch Coal
PTR                Petro China
SNP                China Pete & Chemical

MOS               Mosaic
MON               Monsanto
POT                Potash
AMZN             Amazon.com

*FSLR            First Solar
*MET              MetLife                      (SPECULATIVE)
*PRU              Prudential                 (SPECULATIVE)
*HIG                Hartford Life            (SPECULATIVE)
*SOLF            SolarFun                   (SPECULATIVE)
*ESLR            Evergreen Solar     (SPECULATIVE)
*CSIQ             Canadian Solar       (SPECULATIVE)
*FCX              Freeport McMoran

The next day here is what happened with a few of the above list:

FSLR, First Solar opened at $90.01and four days later it reached $130.80 for a potential profit of 45%.

FCX, Freeport McMoran, opened at $19.52 and moved up 37% to $25.60 in 4 trading days.

JPM, JP Morgan-Chase had a low of $19.69 and reached $31.93 five trading days later for a potential profit of 62%!

WFC, Wells Fargo, hit a low of $19.89 and reached a high of $25.83 four days later for a potential profit of 45%.

CSIQ, Canadian Solar, a speculative stock pick had a low of $3.11 the next day and went to $5.73 5 days later for a potential profit of 84%.

“There is too much risk to open a short position in any stock.  When any substantial bounce occurs, buying will occur so fast, you won’t trust it until it has already moved up a lot in the same day or the next day.  Stay with the 3 min charts and toggle between 1, 3, 5, 15 minute real time charts with your broker.  But start gathering your highest quality stock list to buy if or when we have a panic selling day to buy long on a swing (or less likely an intermediate term position).”

The VIX peaked at 75 today but did not spike up suddenly, it has been a gradual but steep climb.  We would prefer a sharp vertical spike in the VIX reading.   SKF, the Ultrashort Financials spiked and has formed a nice bullshort chart pattern but with only slightly higher trading volume.  This could go higher tomorrow.

The DJ-30, S&P-500, Nasdaq Composite daily charts show the move upward confirming that shorting stock would have been a big loss.  This also confirms that the highest quality stock list to buy was the correct move.

The VIX moved up another 5.8% the next day.  The next two days, SKF, Proshares Ultrashort Financials moved up another 81 points or a 36% potential profit in 2 days!

“It seems logical that eventually BIDU makes a move upward but we can say the same for many stocks as well.”

The next day BIDU closes at $111.74 and 1 week later moves up $33 for a 29.6% potential profit

“Stock prices moved up so much off the bottom that it is likely that we see some selling early and probably some buying will be attempted but nothing close to what we saw today.  Let’s face it, the market has so much fear and turmoil that other people are thinking the same thoughts what we are, to be close to the sell button.  If the market has a weak attempt at buying at the regular opening, we may see another cascade of selling just like we saw yesterday.  I’d like to see a healthy continuation of the market going upward tomorrow but I am a little skeptical about that happening considering we saw a big move up late in the session.  The Dow 30 ended up 552 points for today."

The Dow 30 dropped another 15.8% the following 6 trading days;
POT, Potash dropped 36% the following few weeks;
BIDU, Baidu dropped over $87 or 46%;
FSLR dropped 32%,
RIMM dropped 20%,
AAPL dropped 18%,
AMZN dropped 23%.

“It is more likely we see a very substantial bounce upward on stocks in general and could start tomorrow after a negative opening.”
                                   
“Swing Trades:  GS, Goldman Sachs is most interesting as a long swing…..”

“BLK, Blackrock is an investment brokerage firm and looks very interesting as a long purchase tomorrow.” 

“SKF, Proshares Ultrashort Financials, moved up 11.5% today to close at $173.93.  This was $112 last week.   We are also getting signs that this is close to peaking as well.”

“HIG and PRU continued downward today but this is also shaping up to be a decent long position.  I’d be looking at PRU, Prudential close to $25 as a possible long and HIG, Hartford, close to $9 before trying to buy as a swing trade.”

Also keep alarms on FSLR triggered at $110 per share; this stock along with many others could have an explosive move upward these next couple of weeks.

“……. FCX, AXP, AAPL, TOL, and BAC all dropped below their previous support level so many stocks have become more dangerous with risk of lower lows!”

The next day, Dow 30 opened down -315 points and rebounded later that day 911 points or a 11.4% from the low to the high of the rebound.
GS, Goldman Sachs hit a low of $61.05 the next day and rebounded to $69.99 for a 14.6% rebound upward.
The very next day, BLK, Blackrock, had a low of $105.42 and rebounded up $13.58 to $119 or a gain of 12.9% that day.
The next day SKF peaked at$195.51 and corrected over $48 for a potential profit of 32% on the short side.
The next day PRU, Prudential dropped to a low of $20,14 and rebounded almost $7 for a potential profit of 34.1% that day alone.
HIG, Hartford Life dropped below the $9 buy price to $8.62 and later that day rebounded to $10.90.  HIG continued to move up another $2.97 to $13.87 for a total move up in 2 days of 60.9% potential profit.
FSLR, First Solar dropped below the set alarm of $110 and dropped to $105.05, then rebounded over $22 for a potential profit in one day of 21.5%.

The following several weeks:  
FCX, Freeport-McMoran, went from $22.56 to $15.64 for a 31% drop in stock price. 
AXP, American Express dropped 17.7%;
AAPL, Apple Computer dropped 12.2%;
TOL, Toll Brothers dropped 24%;
BAC, Bank of America, dropped another 41%.

“Keep an alarm on HIG and PRU as they continue to move down more today. This is shaping up to be a decent long position in the next couple of days. I’d be looking at PRU, Prudential close to $25 as a possible long and HIG, Hartford, close to $9 before trying to buy as a swing trade.”

“Other ideas: Make a note to yourself to keep watching YHOO, Yahoo, put on alarms on the low price that may hit $10,$9,$8.50 etc.. The stock is making new lows today after hitting $11.06 and closed at $11.35. At some price, there is a good deal for MSFT as a buyer. “

“Also keep alarms on FSLR as it continues to drop, maybe wake you up at $110 per share.”

HIG, Hartford Life, dropped to $8.63 two days later and rebounded to $13.86 in the following two days giving a 60% profit potential in the 4 day period following the report.

YHOO, Yahoo, hit a low of $9.76 two days later and rebounded to $12.40 the following 5 days for a profit potential of 27%.

FSLR, First Solar dropped to $105.50 two days later and rebounded to $127.70 within 24 hours for a profit potential of 21%.

“Look at GS, Goldman Sachs daily chart. This is my favorite chart pattern for daily stock charts. I like the accelerated drop in price and the increasing volume at the same time.”

“Keep an alarm on HIG and PRU as they continue to move down. This could be a possible long position IF they continue to drop sharply and quickly as they did 2 weeks ago.”

“Day Traders/Intraday stock ideas: The drop and pop pattern that we have been using on the intraday trades should work very well tomorrow morning and I am looking for a strong bounce UP sometime tomorrow morning. Tomorrow is NOT a day to be shorting either on an intraday or swing trade. Tomorrow is the day to be covering your short positions. Look for the stocks that came down the most the last 2½ days and those will likely give us the most bounce tomorrow on an intraday long trade. There should be an excellent drop and BIG pop tomorrow for intraday trades with AMZN, CNX, BAC, WFC, AAPL, RIMM, FCL, ACI, GOOG, FSLR, MT, X, SNP, and WLT.”

“Remember to wait for a big drop and if this doesn’t happen, shy away from this idea and other look for another stock chart that presents a good setup. 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.”

“The VIX, Volatility Index moved back up 16.7% today to high of 64.78 today. I’d be looking for the VIX to drop starting tomorrow as stocks should have a substantial tradable rebound upward.”

"It is very rare that I write you on The Daily Stock Picks Newsletter [during the day] but I wrote you an email this morning at 712am Pacific time, suggesting that you sell more of your long positions or at least tighten up you’re your trailing stop losses. After 5-6 up days and 15-40% gains with most stocks (58-130% with the insurance stocks) I knew there could be a long drop below so that is why I made a rare warning. The tell tale sign was the big drop in 125 stocks I have on my watch list and the rebound attempt that followed. I used that rebound to short stocks that I was looking to short with the solar stocks as my first group to short. I shorted SOLF, FSLR and LDK (because they were available to short) at about 715am to 730am Pacific time. These stock picks on the short side gave profits of over 15% today all the way to the end where I covered most of that position except SOLF. I’ll try again early tomorrow morning with this group as well as looking for the ag-chemical stocks (MOS, MON, AGU, POT), coal (FCL, ACI), a couple of oil and gas stocks (GMXR, EOG) and possibly the insurance companies (HIG, PRU, MET)."

“Here is a list of companies that are some of the most profitable stocks in the world.  These are some of the highest quality companies in the world and this is a buy list….”
BP, British Petroleum
COP, ConocoPhillips
CVX, Chevron
WMT, Wal-Mart Stores
PG, Procter & Gamble
IBM, IBM
BRKB, Berkshire Hathaway Class B shares, lower priced than Class A shares.
GSK, GlaxoSmithKline (major drug manufacturer)
BAC, Bank of America
PEP, Pepsi-cola
GOOG, Google
AAPL, Apple Computer
APA, Apache Energy

“Even though stocks continue to drop, short selling at this point in the stock market would be a very low probability chance of success.  This is the time to be buying or building a list of stocks to buy long.”

The stock market started moving up the day after this report for trading days and the results are as follows:

Percentage profit in 7 trading days as of 11-4-2008

BP, British Petroleum +30.2%
COP, ConocoPhillips +24.3%
CVX, Chevron +29.6%
WMT, Wal-Mart Stores +15.4%
PG, Procter & Gamble +16.6%
IBM, International Business Mach. +19.9%
BRKB, Berkshire Hathaway [Class B] +13.0%
GSK, GlaxoSmithKline +14.0%
BAC, Bank of America +18.8%
PEP, Pepsi-cola +16.7%
GOOG, Google +14.5%
AAPL, Apple Computer +20.8%
APA, Apache Energy +32.6%

“I think we have an excellent opportunity to make substantial profits in stocks over the next 3-6 months.  Stock prices may go down more from here before they rebound but the odds are overwhelmingly in our favor to start accumulating stocks and holding for those months.  For those of you who have learned to proficiently trade stocks intraday can profit in this volatile market but the odds are the best to start accumulating stocks for a longer time period.”

“Several stock ideas that are getting interesting as a long position fairly soon are:  BLK, STT, PRU and I still like PEP.  It would be ideal to see further selling in these first three stocks.  Do some reading on these first three stocks on your own so you know the issues that are driving them.  BLK, Black Rock, is an investment brokerage firm.  This has gone down with all of the financial-brokerage-bank stock’s sector.  STT, State Street is an investment company that manages large amounts of money in various mutual funds they started.”

“I’m looking for some sort of tradable reversal in stocks that will start an upward movement in stocks in general but heading back up at a slower pace than what we saw on Friday, Monday and Tuesday’s gap up.”