It is with great excitement we welcome a new year, 2009!
We look forward to returning to the markets January 5th to start a new year of trading.
If you are interested in our real-time class on Monday, Tuesday and Thursday mornings, to discuss market conditions, things to watch for, and your stock ideas... join us each week at the following link....
REAL-TIME DYNAMIC TREND CLASS LINK, chick here and bookmark it
URL="http://metastock.acrobat.com/dynamictrend"
The Week Ahead (Jan 12-16, 2009)
Stocks in the coming week will start to navigate a mine field of fourth quarter earnings reports and economic data, none of which is expected to be good. U.S. stocks appear "defensive" as investors are worried about the economy and grim outlook for corporate profits.
Earnings season kicks off lightly this week with the release of earnings from Alcoa (AA) on Monday.
There's a stream of economic data in the week ahead that will paint more of the picture of the fourth quarter's decline.
Monday (Jan 12)-- Earnings (Before): MTB, Charles Schwab (SCHW); (After): AA, Other: JP Morgan Healthcare Conference.
Tuesday (Jan 13)-- Earnings (Before): STT, INFY Eco: US Trade Balance, Treasury Budget Other: Mosaic Investor Meeting
Wednesday (Jan 14)-- (Before) AMR (AMR); (After) Xilnix (XLNX); Economics: Retail Sales (Dec.), Business Inventories, MBA Mortgage Applications, Crude Inventories; Other: Goldman Sachs Energy Conference
Thursday (Jan 15)-- Earnings (After): Intel (INTC), Genentech (DNA), Teekay Shipping (TK); Economic: PPI, Philly Fed, Jobless Claims
Friday (Jan 16)-- Earnings (Before): PPG Industries (PPG), FHN, Sony (SNE), Johnson Controls (JCI); Economic: CPI, University of Michigan Consumer Confidence
Tues, Jan 13 Early Morning Class Follow-Up-- The day trades in the E-mini ES, YM, NQ worked well yesterday, and it looks like the day-trade room shorts we reviewed this morning have a much better chance of working out later this afternoon as we suggested. Will try to attach those trades here later today....
Wed, Jan 14 Early Morning Market Observations--
1. The DT Shorts are working well since I returned Monday.
2. Day-traders be aware, this morning the overall market bias is down. Price movement down is picking up a little a little bit of steam, making it easier to stay Short recently acquired Short positions.
3. I covered part of a small hedge a couple weeks ago. As of now I only have 100 shares left of the UltraShort Dow 30 ETF (DXD).
4. The DJ Industrial will not stop now until it tests 8,000 again. (It currently is at 8,267.38)
5. I will post later today some of the DT trade ideas we have recently discussed so we can see a picture of what is going on in these stocks or indexes.
6. As I said Monday, I felt January would be a "defensive" month where no trader or investor will be willing to establish a new position where they maintain great confidence or conviction in it. (If you are a Bull, you have to stay conservative, cautious and careful this month.)
7. Some areas we have discussed such as the Energy sector, some select stocks will be the only place where we will find some success buying for small rallies this month. I took a small Feb Call position in an energy stock a couple weeks ago based on this logic.
Earlier this week in our Monday and Tuesday morning live class, we discussed the day trading behavior of the market and we showed the current E-Mini Index day-trades going on at that time. Below is a follow-up on this.
Since I am currently own 100 shares of the ProShares UltraShort Dow30 ETF (NYSE symbol = DXD) I have been using the Dynamic Trend E-Mini day-trade Shorts to guide me in managing my positions money management. We discussed Monday how to just drop an incremental trailing stop rather than close out the Monday and Tuesday Short-- if we had gone Short at the top like I had done via the ETF instrument. At this point I would do a very simple strategy of dropping the trailing stop lower once we test the 8,000 area in the dow, for example. If you are anxious to stay Short you don't lower your trailing stop as much. If you are just happy for a good seven day decline profit that is getting closer and closer to a daily chart support, you would, in all probability, be willing to have been stopped out for whatever gain you have accumulated so far during this decline. You do this because, as Jim Cramer reminds us, "pigs can get slaughtered." Depends on how much you want to milk this Short for every cent you can get out of it. My analysis suggests the true, major, very best key support area on the daily chart hasn't totally be tested... but ... we did finally hit 8,000 as I said yesterday was where it was heading next.
My guess (update) is that the DJ Industrial will have one more day of weakness to come before the Shorts will start covering more for the weekend. That is a better day to 'time' this decline being completed or ready for a bigger rally later tomorrow.
Over the weekends I often will review the previous weeks action, then seek out a plan of action for the next week. Since we have monday off I will do most of my work then to come up with more ideas but for now I have decided to analyze a little more the following groups or individual stocks to see if they offer good trade setups: AUY, REFINERY stocks, AIRLINES, AIR, TRA, mygn, ESI, LLL, LMT, TM, AEM, ENR, ILMN, APOL, CAL, LCC, RIMM, GDX, AWH, WNR, TSO, SUN, HOC, MRO, sto, pbr, banks still weak or defensive, EW... I saw one solar stock that looked interesting but cannot remember the symbol now so will look at them Tuesday morning again, auxl, hrs, blud, sqnm, HON, unh, glw, M, ibm, mon, mos, rio, gt, GFI, atvi, gs,
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Monday: Martin Luther King Day-- Markets Closed
Tuesday: Earnings- AMTD, FRX, JNJ, STT, CSX, IBM, RF, SU, CREE; Other- Inauguration Day
Wednesday: Earnings- ABT, BNI, COH, NTRS, USB, UAUA, AAPL, EBAY, UTX, STX; Economics- Mortgage Applications, NAHB Housing Market
Thursday: Earnings- BK, CIT, FITB, JNS, KEY, LMT, LUV, STI, POT?, SHW, UNH, UNP, AMD, COF, GOOG, MSFT, PBCT, , MTB, NOK, EXC; Economic- Bank of America REIT Summit, Housing Starts, Building Permits
Friday: Earnings-GE, SLB, XRX, HOG,
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Friday, Jan 23 Early Morning Update-
Looks like the likelihood of Dow 7,500 is becoming a very real possibility in the near future. This morning we broached 8,000 again and currently stand at the 7,854 area.
We have new leadership in Washington. The stock market decline has basically paused since November/December as the market makers waited patiently for insights how the new administration would proceed in trying to solve our national and international financial problems. It appears the 'fear' clock may be activated again and anxiety could be returning. There is a limit to patience. The Bear market decline will not stop forever. The risks are still high and the new leaders need to get re-focused on the urgency of the matter.
I said earlier this month I felt January would be a tough month. I am still picking up those same impressions. The negative psychology permeating the country and world now is going to continue to weigh down market advances for a while longer until significant federal stimulus policy is enacted or more hope is restored.
Wed, Jan 28, 2008 MORNING UPDATE...
Today is the first day the DJ Industrial pivoted upward to extend the past seven trading day range. Today's uptick could signal the end of the decline or it could suggest the decline to 7,500 is going to take more time and not happen right away?
Depends a lot on if President Obama's stimulus plan can win the House vote today or soon?
1:25PM UPDATE-- Looking more and more like the stock market wants to extend its gains today... it made a possible little breakout move today on the DJ Industrial, for example. Willing to stay long if day-trading today....
Fri, Jan 29, 2009 MORNING UPDATE...
Possible short setup in Newell Rubbermaid (NWL)... if it breaks one more time downtrend continuation very possible.
Black & Decker (BDK) gaped lower two days ago and toop out the last low on an earnings warning. Odds favor a downtrend continuation in the near-term. Monitor it for a possible Short setup. Today is a the 2nd day of its breakdown.
Take a look at Fortune Brands (FO)... Very similar downtrend pattern to BDK but it has not yet taken out its last $30 low... but... if it trades like BDK... odds favor it could be coming. Be a little more conservative trying to enter any possible Short setup, at least until a breakdown continuation occurs.
Starwood Hotels & Resorts (HOT) is breaking down again. If you are interested in the Starwood Hotels & Resorts (HOT) SD Short setup just now getting triggered, you might consider combining the PB with the SD if you want to keep riding this downtrend as long as you can. The SD target will be hit quickly but the PB gives you additional possible targets to consider if you can devise your our trailing stop strategy. Basically, as long as HOT cannot rally above $18.50, odds are very good this downtrend continues for a while longer.
10:25am update--
Warning to those interested in buying Genentech (DNA)... The lower-quality SB Short setup trade is working very well today. Effective today those interested in buying this stock in the near future should now reconsider and hold up, at least until a triple bottom formation gets identified. For now, the bias now is to try and identify a Short setup in the near-term.
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3:45PM UPDATE -- I cannot believe it! I even commented a week ago last Friday that I thought the DJ Industrial was heading lower to test the next lower 7,500 support. After all this time in January where I bought ETF's that basically Shorted the market, I recently got myself "snookered" into thinking we were basing out and building a bottom. All I can say is shame on me. I should have stuck to my convictions and keep selling the rallies. It seems like making money going Short continues to be easier than trying to keep picking bottoms.
While, we have a few moments before January trading is over. What do we do now? I say watch very closely to see what happens the first three trading days of February. The way I feel right now it wouldn't surprise me we end up at 7,500 in the Dow Industrial sooner rather than later. We still have a lot of earnings coming out next 2-3 weeks. It doesn't look like Wall Street is getting optimistic about the rest of this earnings season.