Daily Stock Picks Report Archive

It looks like my interpretation of how the AIG news was going to affect the market was wrong.  The loan from the Federal Reserve to AIG created more questions and more uncertainty.  And the markets don’t like that.

The stock market went down 449 points on the Dow today as investors tried to digest how the AIG bailout by the Federal Reserve was going to be received by investors.  Plus we have the hangover from the Lehman Brothers bankruptcy being absorbed as well. 

MS, Morgan Stanley and GS, Goldman Sachs were under a lot of selling pressure and the CEO of MS accused the naked short sellers as the cause for the vicious selling in their shares which dropped by as low as 44% at one point but closed at -24.8%.  Usually when blame is cast upon short-sellers, it is usually the CEO that is hiding something negative about the company, usually the earnings, balance sheet or eroding earnings.

GS, Goldman Sachs dropped as much as 35 points today and is being "attacked" as well.  Although these stock charts would normally look attractive to buy with this pattern of accelerated decline and increasing volume, this pattern of investment banks being toppled one by one could result in further declines.

The question has become whether we can trust the financial statements and investments that are held by these investment banks or even money centers.

On top of this news in this sector, it was revealed today after the market that Washington Mutual is trying to sell itself through an auction process being held by Goldman Sachs (GS).  The last time this was tried resulted in a bankruptcy a few days ago (LEH).

I will be very reluctant to buy either MS or GS tomorrow or do any trading on it but will have intraday trades as goals and the charts will have to be really giving you a great signal before entering and exiting.  

I watched Cramer on CNBC even predict these two stocks are probably not done going down.

AAPL, Apple Computer looks really good on the stock chart.  I love buying long a stock  this kind of stock chart pattern, increasing volume and an accelerated price drop each day.  I plan to add to this position tomorrow.

Large and independent oil stocks did start moving today as oil rose about $6.50 per barrel today.

XTO moved a little too far too fast to keep adding to this long position.  That might pull back a few bucks before an attempt to resume the upward movement.  The price of oil pretty much dictates what happens to these energy stocks.  UNG looks like it is setup to move upward

I found a sector that has been moving up these last two weeks, food companies like K–Kellog, GIS–General Mills, HNZ-Heinz & Co., PEP-Pepsico and RAH-Ralston Purina.  It looks like these stocks could keep moving upward.  Keep a stop loss on this group.

Other stocks that I am watching for a potential long purchase are: SYUT, CHK, PTR, and SNP.

Gold went up $90 per oz and set the record for largest increase gold has moved ever in one day.  This is signaling that the market is forecasting trouble after the AIG move.  I am watching NEM, GOLD and GLD etf.

Be careful with the financials the next couple of days.  Keep positions sizes small and gradually enter into them unless you are trading intraday.  Make sure you get your signals from the indicators on the stock charts.  In times of extreme volatility like we saw this week and if you are intraday trading, set your time setting at 3 min or 1 min charts.

Have a great day and keep your stock position sizes small relative to the account size!

Mitch King

www.TradeStocksAmerica.com

Contents:  Stock market education, stock trading strategies, stock picks, market commentary, subscription newsletter.