
Stock Market Online February 9, 2009 Monday Evening
Stocks seesawed today as investors looked to Washington for direction on the stimulus package vote
that is scheduled for a Senate vote on Tuesday. It is likely we could have a small relief rally if the
Senate approves the stimulus package. The odds favor that the bill gets passed on the first round but
if not, we could get a round of selling that would give us a second helping in the long positions of
some of our stocks on the list below.
BAC- Bank of America and USB-US Bancorp are the only banking stocks from our bank list
continuing the move up from last week. USB didn't move up near as much as the other banks so that
was a hold and BAC was sold on Friday toward the close on Friday.
Since we harvested most of the swing and intermediate trades, it mostly became a target rich
environment for the intraday trades or scalping on our usual list but many more stocks we don't
normally watch were tradable. After any harvest like we just had especially in the banking stocks, it is
best to sit on sidelines watching and waiting for good set-ups for high probability trades. We are
somewhat back in the "no mans land" but the market seems to have a bias toward the bullish side. If
we can get a stimulus package passed and a banking bailout reassured, then investors and money
managers will start ignoring the bad news and look to the future, which is likely to result in an uptrend.
Having a large long position now before the stimulus package vote is not advisable; it is like buying a
stock long on the idea the company beats earnings expectations and that is a dangerous strategy.
Oil prices has drifted slightly lower to $39.69. Losing my patience with USO, US Oil Fund ETF as
I have mishandled this last helping of this ETF.
Intermediate Trade Positions: New ideas: POT, Potash, an ag-chemical had a big swing today
from a high of $95.40 to 87.80. This is the idea we were looking for before considering purchasing
long. Few more days of watch and wait for either a swing or intermediate. Intraday short scalps on
this were outstanding today with almost an $8 potential or 9.1%.
Swing Trades: No new ideas. Still on sidelines.
Day Traders/Intraday stock ideas: Just another outstanding day on intraday trading. Keep
scanning amongst these and other past favorites for good drop and pop signals. We will also see
reversals Continue to watch ICE, BLK, CME, POT, MON, MOS, AMZN, AAPL, FSLR, BIDU, WFC,
JPM and any high volume, high volatility stocks.
NOTES: We are getting higher frequency of bullish days as anticipated and the obvious weeks. Be
patient, use small positions and use wise money management and trailing stops in
intermediate trades.
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, learn to get used to it, this 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).
REPEAT: Keep an eye out for biotechs; they are building momentum and often do well in January.
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.
Current positions are highlighted in yellow.
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 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 tomorrow.
Mitch King
About the Author
For more tips and information about Stock trading online , check out http://www.tradestocksamerica.com/daily-stock-pick-results.php .
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