Daily Stock Picks Report Archive

The financials dropped hard today and the volatile market arrived as expected.  We should see a couple more down days in the financials, especially since tomorrow is Friday and Monday morning should see more selling.  WFC and BAC are the best looking charts for a short that began today.

The airline stocks also dropped nicely and oil hardly rebounded.  It is likely if oil rebounds only for the week or two that I am looking for that the airlines will continue to sell off most of the gain they have seen in the past week or so.  LUV, DAL and UAUA dropped hard.

Like I mentioned yesterday, oil looks like they are going to go up from here for a short term rise within a downtrend.  It should give us a tradable rally.  I don’t see new all-time highs of oil soon but anything could happen with the political unrest and some supply reports or production interruptions could spike oil again.  I am still looking for a technical bounce up from here in the oil sector followed by a substantial retracement back down.  This cycle will take some weeks to a couple of months to complete.

The CVX, Chevron-Texaco looks like it has the most potential on a rebound and I’d stand aside on COP although any oil price rise will bring up the major oil and gas producers together.

You should take note that natural gas prices have gone down from $13.70 to $9.30 in the last 5 weeks.  This has gone down in parallel with oil prices.  Here is a group of stocks that are likely to rebound upward when oil starts moving up.  These are only a few stocks out of many energy stocks.  I’ll try to look for more this weekend but here are some interesting stocks to consider soon:

COG, Cabot Oil and Gas

NXY, Nexen

ATPG, ATP Oil and Gas

GDP, Goodrich Petrol HK.

These are all independent oil and gas companies.  Use Yahoo Finance to get a profile on company and income statements on these.  That is your homework assignment before you buy them long.  I have not done any due diligence on these on a fundamental approach.  I am pointing them out as potential technical bounces, which is my primary focus.

Can you see how the market moves its attention from one focus to another even on the same subject?   For 4 to 5 days the market was excited about the prospects of financials rebounding and there was an over-reaction to the upside and now we saw the beginning of sharp selling in the same sector to the downside.  The market decided to react to the bad news that came from the continued slump in housing sales this morning.  The attention of the market changes from day to day and it’s a financially rewarding challenge to be in sync with the general sentiment of the market.

As you can see, I tend to be more on a shorter time horizon in my "forecasts" from a few days to a few months is about as far as I can see with much certainty.  But even in that time frame you can make tremendous profits as you can see with the last two weeks.  One more thought on this.  You don’t have to have this much profitable trades as we have seen this past two weeks to have a great year. 

You can have a few weeks of outstanding profits, take a vacation for a couple of months and start looking for the next opportunity.  Just several big moves throughout the year can put you far ahead of so-called professional fund managers.  You have a far better chance at making much more money than they could make for you just by learning how the market works, recognizing good opportunities and executing your transactions with discipline.  That is your goal.

The only problem with taking off for months from the market is you will get out of sync with the sentiment of the market (which really represents individuals).  It would be like a professional athlete taking off from his sport for months and expecting to be on top of his game.  But that is what you have me for, lol!

Getting back to the market in general and the financials, we probably won’t see the sell-off that started today reach the previous low we saw on July 15th AND the opportunity to profit is pretty much ending on this drop here.  I think the odds of timing a rebound on this bottom that is coming in the financials won’t be near as strong as the first one like we saw with BAC going from $18.44 to 33.71 in 5 trading days.  But we will play it as we see it.  If there happens to be a really negative news that could cause the market to react again to the downside, then another rebound would be worth buying long but we are a long ways from that-so "don’t try to catch a falling knife" as we say in the business.

GENC dropped hard today like most stocks, as expected.

MKTY continued to drop lower slightly.  The trading volume usually drops off from that peak day a couple of days ago.  From here it usually dribbles downward but I don’t try to milk every dime out of a trade because the risk increases that it could rebound again and erase a substantial amount of your profits.  It looks likely that MKTY reaches the $3-$3.20 range to cover the short with a decent chance of going below $3 next week.

By the way, any target prices I give are guidelines and should not be used to make firm trading plans around.  I am always re-evaluating those targets and change my opinions throughout the trading day.  The Daily Stock Report is a once a day report and can’t take into account all the events that occur throughout the day.  Within 4-5 weeks, I’ll have a real-time trading room available to take advantage of many more opportunities during the day.

TXT went up to $44.59 then dropped over $2 at the close.  If the market wasn’t reacting so negatively today with financials and housing stocks, TXT probably would have continued moving up.  Holding TXT and CEDC could be dangerous, especially CEDC.

AGU, MOS and POT dropped to lower lows today and no doubt a large amount of money is exiting this sector.  It is very likely that this pattern of rotation out of this sector is going to occur over the coming months.  Sectors won’t sell down in a straight line, it is a process like what you see in a daily chart of each of these three ag-chemical companies from mid June to today.  We will continue watching this sector for potential opportunities. 

We will start having you logging into the website with your email address and password to get the reports.  This makes it much easier to for us to manage.  This is the link to subscribe to The Daily Stock Report.  http://www.tradestocksamerica.com/signup.php

I hope you have been making money this past couple of weeks-it has been great trading.  See you this weekend.

Mitch King