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The Daily Stock Report 02 Apr

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April 2, 2009 -- Thursday Evening

It was a strong bull market all day with little selling in all indices.  The Dow30 +2.8%, Nasdaq Composite +3.3%, S&P-500 +2.8% and all three indices made higher highs today.  The Hong Kong market was up 7.4% last night and Japan closed up 4.4% and their market was surging way ahead of ours so they were clearly going to be leading us higher.

Any negative news that would have sent the market running for cover just a month ago has been ignored but the market looked beyond that.  This type of trading action changes the odds toward the long buyers now and virtually all the stocks on the wish list moved up except for MS.  Many of them made higher highs.

The banking stocks didn’t get quite as frisky as the wish list stocks so it seems very possible this group still could turn over but the odds are not quite as favorable as they were a few days ago.  We are at a critical point in time where the market could rollover to the downside OR euphoria takes over and we get a nice running with the bulls.

The odds are shifting toward the bullish case, especially with the wish list stocks since they were on an upward movement and some on a small momentum run.  If there is any news that could jolt the market, it would be the payrolls and unemployment report but that seems unlikely any of those numbers would bring down the market.

Oil moved back up 8.7% today to close at $52.64 on the oil index.  Oil is still tracking in parallel with the market.

Intermediate Trade Positions:   Consider very small long positions in the following tomorrow:  MA, Mastercard

TNH, Terra Nitrogen.

BIDU, Baidu

CREE, Cree Inc

FCX, Freeport McMoran

Keep studying these stocks, charts and fundamentals.

UTX, United Technologies (Swing)

MA, Mastercard

IBM, International Business Machines

TNH, Terra Nitrogen

AAPL, Apple Computer (SWING)

BIDU, Baidu

AMZN, Amazon.com

BMC, BMC Software

RAX, Rackspace Hosting

STEC, Stec (SWING)

SY, Sybase

RIMM, Research in Motion (SWING)

CIEN, Cienna

CREE, Cree Inc

DIOD, Diodes (semiconductor)

SWKS, Skyworks (semiconductor)

UEIC, Universal Electronics

RADS, Radiant Systems (SWING)

SWHC, Smith & Wesson

FCX, Freeport McMoran

BR, Broadridge

GS, Goldman Sachs

MS, Morgan Stanley

MRVL, Marvell Technology

WFR, Memc

S, Sprint

GOLD, Rangold Resources

RS, Reliance Steel & Alum.

CMG, Chipotle Mexican Grill (MacDonalds subsidiary,SWING)

BKE, Buckle Apparel

ARO, Aeropostale

DNR, Denbury Resources (Oil & Gas)

VQ, Venoco (low priced oil & gas)

TLM, Talisman Energy (Oil & Gas)

NOV, National Oilwell Varco

PBR, Petrobras

USO, US Oil Index ETF

DBC, Commodity Index ETF

GSP, Total Return Index ETF

SMH, Semiconductor ETF

REPEAT:  Let market pull back before getting too heavy in LONG positions.  It could take several weeks before this bottom is well established.  Stocks that have been the strongest and pull back the least amount with more of a sideways action are the ones to be watching for long intermediate trades. 

Swing Trades:   New Ideas: 

Cancel this idea:  BIG, Big Lots discount stores. 

Day Traders/Intraday stock ideas:  Friday should have a lot of volatility, many stocks are overbought and could see a nice drop followed by a nice pop.  Stay on the long side on the pop but don’t buy late in day.  Look for Monday being another big drop and pop.  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. 

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

Type

 

Notes

GS, Goldman Sachs

LONG-SWI

Missed bottom 3 days ago; watch and wait.

MS, Morgan Stanley

LONG-SWI

Not interested; DELETE

IBM, Int’l Bus. Mach

LONG-SWI

Missed bottom 3 days ago; watch and wait.

MOS, Mosaic

LONG-SWI

Not interested; DELETE

RIG, TransOcean

LONG-INT

Worth very small long position now; hold

PBR, Petrobras

LONG-INT

Missed bottom 2 days ago; watch and wait.

WFC, Wells Fargo

SHORT-SWI

Holding a little longer to see if short will work.

KEY, Keybank

SHORT-SWI

No trade here; DELETE

USB, US Bancorp

SHORT-SWI

Holding a little longer to see if short will work.

GE, General Electric

SHORT-INT

Holding a little longer to see if short will work.

PRU, Prudential

SHORT-SWI

Reduced short position; holding ½ position short

HIG, Hartford

SHORT-SWI

Still looks weak; hold short

CME, CME Group

LONG-SWI

No trade idea; watch and wait

AZO, Autozones

LONG-INT

Stopped

AAPL, Apple Cmptr

LONG-SWI

Missed bottom 3 days ago; watch and wait.

BAC, Bank of Amer

SHORT-SWI

Holding short to see if it drops; hold ½ to 1/3 short

SKF, UltraShort Fincl

LONG-SWI

Should start moving up a little.

TOL, Toll Brothers

SHORT-SWI

Still holding short

KBH, KB Homes

SHORT-SWI

Close ½ of short position; hold short remaining position

SRS, UltraShort RE

LONG-SWI

Broke below support line; awful chart; more downside

USO, US Oil Index

LONG-INT

Worth small long position now.

PBR, Petrobas

LONG-INT

Try to get lower price to buy, gapped up a lot today

CETV, Central Europ

SHORT-SWI

Not a trade idea anymore; DELETE

JPM, JP Morgan

SHORT-SWI

Stopped; strong reversal; still might turn down

DB, DeutscheBank

SHORT-SWI

Stopped Wednesday; higher high, bullish

WFR, MEMC

LONG-SWI

Dropped below $16 for entry point to buy; hold long

RTN, Raytheon

LONG-INT

Small long position; hold

ASH, Ashland

LONG-INT

Took off without us; nice bull run, could turn into short

MA, Mastercard

LONG-INT

Small long position; hold

TNH, Terra Nitrogen

LONG-INT

Strong uptrend; hold small long position

BIDU, Baidu

LONG-INT

Missed bottom 2 days ago; watch and wait.

CREE, Cree Inc

LONG-INT

Big move last two days; let it pullback some

FCX, Freeport McM

LONG-INT

Missed bottom 3 days ago; watch and wait.

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.

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