Daily Stock Picks Report Archive

The market is ready to go up-it acted much better today even though it ended down 189 points.  It was only the last 15 minutes where it sold off.  The trading action in stocks was much more bullish and even though it was a battle between the bulls and bears, this is the first day I’ve seen in a week that there was even any buying from the bulls.

The buy programs were stronger, the sellers are not as strong and all technical indicators are "screaming" to buy today.  The high in the VIX was about the same as the day before yesterday and even though I have been off a day or two on the exact bottom, the odds are overwhelming that the US stock market (and probably all markets globally) start heading up.  It wouldn’t be surprising to see the Asian markets and European markets tonight start going in the positive after a negative opening.

As I’ve said yesterday, the rise in stocks are going to be so fast, it will catch most people off guard.  So far these past 3 weeks, it has NOT been rewarding to make assumptions and build "positions" to hold for swing or intermediate term holding periods but that strategy is going to start working again. 

If you gradually enter your positions without getting overly leveraged tomorrow you can withstand further drops in the market, although I think we start heading up beginning the next day or two.  The market is still going to be nervous and sensitive to any news that looks threatening but investors are getting used to the various events that have caused this drop in the first place. 

The smart money is bullish now and the dumb money is at the height of their fear and panic.  The main influence that is leftover may be mutual funds having to sell to meet redemption requests, banks selling investments to meet reserve requirements and unsophisticated investors throwing in the towel now and selling stock at the bottom.

It will still be a rocky ride out of this bottom but we should see some strong upward trend overall, in spite of the volatility.

MON, Monsanto had a big swing today from a low of $68.02 and a high of $87.82.  This looks poised to move up now even though it has gained a lot of ground already.   POT, Potash, from the same sector as Monsanto moved up sharply too from a low of $79.94 to $103.24 today.

Other stocks

NBL, APA, EOG, COG, FCL, ACI, CNX, MEE, FCX, SCHN, X, AKS, PRU, AAPL, IBM, UYM, MT, and CMC. 

My favorites are POT, COG, FCL, CNX, FCX, SCHN, AKS, PRU, MT, CMC and IBM. 

IBM released earnings earlier than scheduled and came out aftermarket today.  The stock responded by going up over 5 points or 6%.

If there ever was a time to buy call stock options LONG, this would be the ideal time.  I would set the expiration date for February to give yourself plenty of time.  If a stock price doubles, the option usually increases 7 to 10x.  Also, start with a strike price that isn’t too far out of the money.  So if FCX is $42.60 at the close today, have the strike price on a January or February call option 45 or 50.

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

Mitch King

www.TradeStocksAmerica.com

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