Daily Stock Picks Report Archive

November 10, 2008  Monday Evening                                                                                                                            www.TradeStocksAmerica.com

The stock market acted about as expected; it stayed within a range without getting too crazy up or down.  The Dow 30 opened up almost 200 points on the plus side because the Chinese announced a $586 billion stimulus package, then sold off 400 points at one point but ended down  -73 points for the day.  It acted like it was continuing its selling from last Wednesday and Thursday and the charts on the indices look like the market could go either way with more bias toward the downside.

The financials took a hit today with the SKF, Ultrashort Financials moving up 22 points to a high of 153.81.  The IYF, the long ETF in financial stocks should be getting close to a long position on an intermediate or at least a swing trade.  If this gets under $47 the next two days, that would be a good position to gradually buy stock in.

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.  This is the stock that Warren Buffet bought at $119 last month and hit $68.51 today.  This is an excellent stock pick as a long position to start buying gradually in small shares sizes as the stock moves down in the $60’s.  It closed at $71.21 today after reaching $68.51 and I am hoping it gets back into the 60’s tomorrow so I can start buying and holding possibly for weeks.

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.

Note that the oil and gas stocks are doing real well even though oil is at $61 today and went to $59 something last Friday.  The daily charts on these independent oil and gas stocks are still bullish in spite of the price of oil still falling.  If we get some firming of oil prices on the spot market, these would likely move upward along with oil:  COG, EOG, GDP, XTO, NBL, APC and GMXR are still bullish looking daily stock charts.

The housing stocks (BZH, CTX, DHI, KBH, TOL, PHM, LEN, HOV) took a big hit today from 4+ to 16%+ for HOV and BZH.

The market still appears to be in "no man’s land" where it is hard to predict on a short term what the market will do. 

The VIX, Volatility Index moved up 7% today to 59.98.    We should see some continued dropping in the VIX as the stock markets tries to move upward these coming weeks.

Intermediate Trade Positions:  If you still have stocks long and did not sell in this latest rally, be prepared to hold for a couple of months to move to higher highs.  It is a little too late to be selling now.

Swing Trades:  GS, Goldman Sachs is most interesting as a long swing and might turn into an intermediate term position long.

Day Traders/Intraday stock ideas:   The drop and pop pattern that we have been using on the intraday trades should still work well on the long side tomorrow.    These same stocks plus many more should be good candidates of the drop and pop technique for LONG intraday trades with AMZN, AAPL, RIMM, MON, MOS and POT.   FSLR, First Solar should still have selling pressure from the downgrade today so be more cautious going long, allow it to drop further and longer after the opening.  I am looking at SNP, China Petroleum as an intraday trade on the short side but that might be a more advanced one to play.

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.

Last Note:  We are still in a bear market with a strong downtrend.  This recent rally we just had in stocks was just a counter rally within a bear market.  They are powerful and can be very profitable, as you just have witnessed (and hopefully experienced).  We use whatever stock trading technique the market requires from day trades to swing trades (2- days), intermediate trades for months, short selling and long positions.  We can buy stocks, stock options, ETFs or occasionally bonds.

Have a great day and I’ll talk to you this weekend.

Mitch King

www.TradeStocksAmerica.com

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