Daily Stock Picks Report Archive

There was no indecision today about the stock market, it was up early and stayed up with little volatility.  Money is pouring into the market now and it could very well continue as a variety of groups of people may be just starting to buy stocks long.  The way the market acted today, it looks like there is a lot of support so expecting a big correction off this rebound we have had this last week is probably wrong.  The buyers are from these groups, some of which we have talked about this last 2 weeks. 

First, the foreign investors have been just as scared as our retail investors were when they bailed out of their US stock holdings the last 2 weeks at the lowest prices of the year (or of the last 4 years).  The smartest money came in the market already (the great traders [like us], speculators and individual investors like Warren Buffet, George Soros, Ken Heebner, Jimmy Rogers and many others) and a lot more money still is moving into the market from mutual funds, pensions, money managers, hedge funds, foreign institutional money, foreign and US retail investors have yet to come in last at which time the market should peak for a period of weeks while we go through what our industry calls consolidation.  That is basically a slight downward and sideways movement until the markets builds momentum to the upside again. 

Surprisingly, it doesn’t appear the market was worried who was going to win the election because Obama has been in the lead from the get-go this morning.  The projections on the electoral votes have been showing all day from the opening of the market that Obama had more than 44 electoral votes over and above what is needed to win (projected).  So it was obvious that the market isn’t worried about that.

This stock market is setting up to be what I described in the last couple of weeks– as stocks move up off a deeply oversold bottom like we had last week, it could easily cause a panic buying condition and stocks could overshoot on the upside as easily as they overshot on the downside.  Everyone is watching how stocks are moving up but they still have a little fear and as stocks continue to move up like this, their fear turns into greed. 

You can clearly see the "V" bottom developing in all the stocks we have talked about in the last few weeks from the sector stocks like ag-chemicals, coal, metals and mining, oil and gas, steel, basic materials, food stocks and this list of highest quality-most profitable list.  Virtually all these stocks are responding in this manner. 

The swing trade idea of shorting some sector stocks for a day or two was clearly not going to work when most stocks opened up (aka gapping up) and continued to move up with shallow pullbacks and higher highs.  The way the market acted today could be good evidence that we have a ways to go on the upside before flattening out or heading down but as we say in this business, trade what you see, not what you expect.

Solar stocks had another big day up with FSLR, ESLR, SOLF, CSIQ and LDK moving up again today anywhere from 6.6% to as high as 16% today alone.    This group has had 4 big days up in a row.  The odds are getting better and better for a nice short sale.  We want to see an increasing volume along with this kind of price climb as well.  ESLR, Evergreen Solar has come from $2.11 last week to a high of $5.72

VIX, Volatility Index continued to go down as the stock market stabilizes and rises in value.  See stock chart on video.  It broke below 50 and reached a low of 44.25 on the index.

Oil prices moved up today 10.3% alone to close at $70.53 per barrel.  This is helping bring up the sectors we have been tracking for weeks (or months actually).  Oil, gas, solar and coal are direct beneficiaries of the oil price moving up.   

HIG, MET and PRU had another day on the upside and are up well over 50% from the low on MET, MetLife. HIG, Hartford is up over 129% in the last 4 days.  PRU is up 78% in the last 3 days as well.  There may be an opportunity to have a short swing trade in this group if these continue to climb.

List of most profitable and highest quality stocks with percentage change up from the low 4 trading days ago through November 4, 2008 close.

Day Traders/Intraday stock ideas:   This pattern for intraday trades of letting stocks drop first in the first hour or so of regular stock market trading and buy long on the reversal was limited to fewer stocks This intraday trading strategy will likely be less effective in the next few days, assuming the market continues to move upward.  The pattern will shift to a more bullish scenario where stocks open up a little and continue to move upward in a steady controlled fashion.  That is what we saw today with more and more stocks.

Remember to wait for a big drop and if this doesn’t happen, shy away from this idea and either look for another stock chart that presents a good setup.  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.

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

Mitch King

www.TradeStocksAmerica.com

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