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The Daily Stock Report 16 Apr

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April 16, 2009 -- Thursday Evening

The market continued to move up today and the buy entry was yesterday and day before for many stocks.  Tech stocks did the best which moved the Nasdaq Composite up 2.7% today with the S&P500 up 1.5% and the Dow 1.2% gain. 

We are getting some early signals that we might be getting overbought.  Look at the Worden’s Telechart T2108 showing that 92.25% of stocks are over the 40 day moving average.  This is the highest reading since May 2003 and then January 2009 a few months ago.  Note the drop in the market from the January 6, 2009 high was 24% with the Nasdaq Composite, Dow30 dropped 28.5% and the S&P 500 dropped 29.5%.  Also watch the VIX, the Volatility index, VIX—X on Telechart.

We should be closely watching the bull run and not try to be going for home runs on profits.  Be focusing on what is happening in the market.  Ask yourself questions these questions in the next week or two:

What type of news is surfacing each day and how is the market reacting to it?

What do the daily charts act like?

What kind of earnings and guidance by companies are being released this season?
What are the economic reports, are they improving and what is the market doing?

My best guess is we have some sort of top next week with a mild pullback as a minimum.   I am concerned about the T2108 chart showing such a high percentage of stocks above the 40 day moving average.  It doesn’t mean that a big selloff is coming but that number usually doesn’t stay up there that long.

Oil index had no change but continues to have slightly lower lows and lower highs.

Intermediate Trade Positions:   The following stocks all look like good intermediate trade stock ideas and any one of them would be worth a small long position.

IBM, International Business Machines   &amp...    &amp... DELETE

UTX, United Technologies    &amp... HOLD

MA, Mastercard   &amp... DELETE

AAPL, Apple Computer    &amp... HOLD

BMC, BMC Software   &amp... DELETE

STEC, Stec    &amp... DELETE

SY, Sybase   &amp... DELETE

RIMM, Research in Motion    &amp... HOLD

DIOD, Diodes (semiconductor)   &amp... HOLD

FCX, Freeport McMoran   &amp... HOLD

BR, Broadridge   &amp...    &amp... HOLD

GS, Goldman Sachs   &amp... HOLD   &amp...

CMG, Chipotle Mexican Grill (McDonalds subsidiary)     SHORT-TERM SELL

TLM, Talisman Energy (Oil & Gas) HOLD

PBR, Petrobras   &amp... HOLD

FXI, Xinhua China 25 ETF   &amp... HOLD

SMH, Semiconductor ETF   &amp... HOLD

Swing Trades:   New Ideas:  Still watching RT, Ruby Tuesday, restaurant chain as potential short sale but not ready.

Day Traders/Intraday stock ideas:   The drop and pop should continue to be very most successful.   The drop has been shallow in the last two days because the market has been bullish and wants to go up but when you see the market correcting, let the stock drop longer before buying.  When stocks start correcting after an extended uptrend like we are having now, the first down days provide the best drop and pop which should be traded on the long side at first.  Hypothetically speaking, if the market turns over and continues down, you should wait longer and longer for stocks to drop in the morning then look for the pop to go long again.   Stay on the long side on the pop but don’t buy late in day.   The banking stocks were strong today on the drop and pop in the first 90 minutes:  BAC, WFC, JPM, C, and USB.  Also look for good intraday trades in FSLR, ICE, BLK, CME, POT, MON, MOS, AMZN, AAPL, BIDU, USB, WFC, JPM and any high volume, high volatility stocks.  You can try using various software programs within your brokerage firm’s trading platform that could provide you the highest beta stocks in order and review those on daily and intraday charts.  The stocks above are just a few of them and this list often changes.

REPEAT:  Many of you have emailed me with questions about not having the $25,000 to do intraday trading.  You can have 3 intraday trades in a 5 business day rolling period without having $25,000 in your account.  Above $25,000 you can do unlimited intraday trades as long as your account equity is above $25k.  You can have swing trades like we have been having the last 2 weeks and make a smaller amount of money, let’s say $10,000, to build up with swing trades.

Thoughts:  Keep steady, calm, decisive, aggressive.  Have no fear and no greed.  Keep looking at what to be doing next in a calm manner.  Don’t focus on the past or beat yourself up what you did or didn’t do or what you should have done.  Just keep playing the next shot, which in this business your next shot could be just sitting on the sideline.

I am still expecting some sort of substantial rally in the stock market sometime this year mostly driven by the massive stimulus that has already been poured into the system plus the planned stimulus package being proposed now.  Longer term though, in a couple years down the road, no doubt the taxpayer is going to have to pay for such the high debt amounts that the US government (and other countries) have taken on.   So tax rates probably will rise in coming years, interest rates will very likely have to rise as inflation surfaces and likely the bear market resumes sometime down the road.  But we don’t have to be stuck in a miserable cycle like most investors.  With the techniques and approach to the market, we will still thrive.

If you have been uncomfortable shorting stocks, which most people are, try to learn this technique, it will be a useful tool in the coming years.

When I list several stocks from the same sector, like the housing industry for example, don’t short all of them unless you are well diversified and it represents a small percentage of your total stock account (in that same account).

Ticker Symbol




GS, Goldman Sachs


Small long position; hold.

IBM, Int’l Bus. Mach


Consider selling long position

RIG, TransOcean


Closed; will look at re-purchasing below 60?

PBR, Petrobras


Gradual uptrend; hold

USB, US Bancorp


Closed short on WFC positive earnings; DELETE

GE, General Electric


No position; watch and wait.

PRU, Prudential


Strong along with other financials today.

AZO, Autozones


Strong uptrend last 2 days; hold if long.

AAPL, Apple Cmptr


Strong uptrend continuing; hold.

BAC, Bank of Amer


Correcting now, no trade except for intraday trading.

SKF, UltraShort Fincl


Could have a move to mid to upper 70’s.

PBR, Petrobas


Small long position; hold

JPM, JP Morgan


Sell tomorrow?

RTN, Raytheon


Looking good, small long position, hold.

ASH, Ashland


Strong uptrend still continuing; small long position ; hold

MA, Mastercard


Should have stopped; hold if long though.

TNH, Terra Nitrogen


Stopped 138

BIDU, Baidu


Very bullish since mid January; hold

CREE, Cree Inc


More upside but too late to buy long.

FCX, Freeport McM


Mild uptrend, new higher high; small long position, hold.

CIEN, Cienna


5% stop triggered on small long position; hold.

GOLD, Rangold


Stopped 45.68

RS, Reliance Steel


Bad sell; look for buy entry point

S, Spring-Nextel


Stay at small position; hold.

MRVL, Marvell Tech


Steady uptrend; hold

ARO, Aropostale


Strong move up; hold if long.

DNR, Denbury Res


Small long position here; hold if long.

STP, Suntech


Closed short.

ASH, Ashland


Small long position; uptrend could continue

SWKS, Skyworks


Small long position; hold

RADS, Radiant Sys


Sold small long position, careful, danger.

AMZN, Amazon


Uptrend resuming; hold

IBM, Intl Business


Not as bullish as other stocks; no position

BIDU, Baidu


Big up day, small long position; hold

SWI (SWING): 2-7 days INT: Intermediate term position 8 days to several months.  Open Price:  price paid on opening long position or price sold on short position.  Bold notes on table above represent changes from previous day.

IMPORTANT:  The notes in this stock list is how I have been writing notes to myself about stocks for 16 years.   They are general guidelines as to how I am approaching a particular stock and conditions may change during the next trading day that may cause a change in opinion before the next evening report is written.

Thoughts:  Best odds only, be decisive, aggressive, mentally flexible, stay in position size, don’t overtrade and wait a little longer to buy and wait a little longer to sell.  You will find that will make you more money on your trades.  Trade what you see, not what you hope for.  Intermediate and swing trades are really important to have trailing stop losses set.

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.  Don’t force anything to work for you, let the setups develop and then take advantage of that.  Be patient.  Stay in position sizes without letting any intraday trade represent no more than 10-15% of your total account value.  As you build your account, your position size percentage should get smaller and smaller to lower your risk.

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

For more tips and information about Selling Short, please check out How to Be a Day Trader.