REPEAT from Friday’s (SEP-4-09) report: Most stocks are probably not going to rebound to higher highs and we are looking at a few stocks to move to new highs.

It is best to monitor the market closely with your long positions because one of these times, the buy on the dip pattern will stop working and that spike down we had 2 days ago (Tues, Sep 1^st) could very well mean an intermediate top is in and a downtrend could be starting but it is a little premature to tell that but that is my hunch at the moment.

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We are deeply oversold on a short term basis and although the market can get more oversold, the odds are favoring some sort of at least what we call a relief rally.

The most likely scenario is we see one of these countertrend rallies start this week, possibly as early as Monday or Tuesday.  What we should be looking for a rally that could last only a few days if it is a weak one (which is most likely) OR if some sort of news catalyst that the market reacts positively, it could last longer BUT be prepared that this may not last long and any long positions should be sold into that rally.

At this point, don’t let any of the slight losses you have in the long positions bother you.  The odds heavily favor us holding the long positions in anticipation that just a couple days’ rally would erase any of these losses

Uncategorized market commentary, online stock trading, stock picks

The stock market was down as much as 247 points on the Dow30 at the last hour and made a last hour comeback after a report of Obama considering making mortgage subsidies to homeowners.  A government plan to subsidize troubled homeowner’s mortgage payments helped the Dow30 rebound and erase almost all of those losses.  The NASDAQ Composite ended up 11.2 or .73%.  This shows the market is not totally lethargic and dead but has some buying power and willingness to buy on good news.

It is like a hospital patient who is semi-comatose but can be brought back to life by a defibrillator (heart zapper).  The Dow30 was close to a “dropping off point” to the November 21^st lows.  This isn’t just a psychological support line but probably a variety of triggers could occur from margin calls, more redemptions requests that caused a lot of October and November selling, and another cycle of retail investor’s fears.  But again I say, we can make the most money in any market when we let the group herd follow each other down a path and then we position ourselves to take advantage of that non-thinking behavior.

For those of you who have studied the Wizard Training Course (or are about to), that is the very underlying thesis of the Bullshorts technique and I’ve made millions on that one technique alone.  (Required statement:  These results are unique and profits are not guaranteed!)  So needless to say, I love group behavior.  As a group in large numbers, people are not very smart.  But for the prepared individual who is trained to recognize opportunities, the rewards are high.

So to quote myself….  “Money flows to those people who have had the best training, are the most prepared and have the most discipline and they take it from the people who have had the least amount of training, are the least prepared and have little discipline.” 

Cut and paste this to a new document, enlarge it and tape it to your door or your bathroom mirror.  Hopefully this motivates you to study this process of making money in the stock market more diligently and learn about yourself and observe the patterns that help or hurt your trading or investing decisions.

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February 5, 2009 Thursday Evening

It is nice to see an up day in the stock market and many of the stocks I sold earlier this week to prepare for a steeper sell-off have been going up the last couple of days. But the Dow30 is still on a downtrend and technical indicators continue to point downward. The Nasdaq Composite is noticeably stronger with a 2% rise today. Perhaps this could be the leader among the indices, which would be unusual.

Banking stocks did exactly what we wanted today especially with BAC-Bank of America, WFC- Wells Fargo and JPM, JP Morgan. The extremely high volume of 755 million shares with BAC, Bank of America was more astounding than the drop to $3.77 today but this is what we wanted in the whole sector. The bounce off the bottom was 22.5% profit potential and it is likely to move up to the mid $5s the next few days, in which this is excellent profit in 2 days (45% profit potential). The odds start changing against you holding this past this point so if this stock has good follow through tomorrow into the low $5s and higher, consider closing this swing.

BAC is still a dangerous stock and likely sees some profit taking tomorrow after any move up. JPM, JP Morgan was a short position that reached the target price listed on the stock list of $22-23 and was covered at $22.75 and then proceeded with a long scalp for another 12% profit. No further trades should be done with this now. USB-US Bancorp gave a 12% intraday trade; C-Citibank was a dog all the way around; GS-Goldman Sachs had higher highs and has a healthy daily chart pattern; IYF-Financial sector ETF looks awful; MS-Morgan Stanley gave a good opportunity to go long with the whole financial sector at the opening, like many stocks did today.

Friday, February 6, 2009
10:24am Pacific time

Hello!

The banking stocks are doing exactly what we want and have gone even higher than expected.  My strong recommendation is take your profits on Long swing trades with BAC, WFC, JPM, USB, and C, or at least sell half of your long positions in these banks today.  The stimulus package is scheduled to be announced on Monday and the financial market’s reaction could go either way but the odds are higher for a negative reaction.

I sure will have a better weekend when I have booked a 65% profit on stocks like BAC.  Now as of this writing at 1023am, pacific time Friday, February 6, 2009, BAC is at $6.34 and climbing and other banking stocks stocks are still powering up with no top in 3, 5 or 15 minute chart pattern but my strong suggestion is to look for the next top in the 5 minute chart to exit. Remember BAC came from $3.77 yesterday morning and has rebounded up 68% so far.  If the stock goes up on Monday, which is possible of course, don’t let it bother you if you are out of these banking stocks–you are playing the percentages in your favor.  This is NOT a time to get greedy by holding these banking stocks over the weekend.

Have a great weekend and sleep well, lol!

Mitch King

Uncategorized market commentary, stock picks, Stock Trading

January 30, 2009

One of the common mistakes for any investor or trader is to feel compelled to have to be in a stock position in order to satisfy the need to be having a chance to make money in stocks.  There are times when it is best to be out of the market or when the market is in a transition from just finishing a “harvest” to waiting until the market is in a high probability buying environment.  Today and yesterday is such a time.

The sectors that I follow from banking stocks to technology, ag-chemicals, oil & gas, housing, steel, food, retail and others are mostly in “no man’s land” where it isn’t a good time to get long or short because the odds are 50-50 at best.

Discipline yourself to wait until the market or a sector is ready to buy long (or short if that is your orientation).  Take the big money center banks WFC, Wells Fargo, or BAC-Bank of America, or USB-US Bancorp, JPM-JP Morgan the week before last.  I wrote in The Daily Stock Report the high probability set-ups in this sector.  We just finished taking profits in this sector the last few days and now we look for other opportunities that give us high probability of making money but I don’t see many yet.

How about the November 21,2008 bottom in the whole market, not just in one sector but in almost all sectors.  There is an example of an extremely high probability “set-up” to buy stocks long.  Well, you get the idea.  It is discipline and emotional control that keeps you from going into markets like yesterday and today where neither long or short ideas had high odds.

Take care and talk to you soon!

Mitch King

Uncategorized online stock trading, stock market education, stock picks, stock trading strategies