Stress Test Results

It was announced today that the results of the bank stress test will be released on May 7th. Which might be a good thing for investors and traders who are looking at some more gains this week. The stock markets have been relatively flat today on light volume.
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I’ve been holding on to some of the positions waiting for some sort of sign of a pull back to come. With the news of the stress test coming out on Monday, I was planning to sell out of the remaining positions today, but with the news being pushed back three days, I just might wait till Tuesday.
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One company I’m looking to jump out of is Kinder Morgan Energy Partners (NYSE:KMP). The stock has jumped over 15% the beginning of March. Why I’m waiting to exit the stock is because of the 10% yield I will receive on the dividend. The ex-date is today at the close of the trading day. I feel that it’s been stuck at a resistance level and has stalled. I’m up nicely and will get back in when the markets pull back, taking KMP’s price down along with it.
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I feel that the stress test are going to be negative for the nineteen banks, why else would they delay the results. Of course we should have known they would be for the simple fact of the guidelines put in place by the government. The banks won’t be allowed to count the preferred assets to the bottom line. Without those assets counted, the government will claim that the banks are not well capitalized. If they are considered not well capitalized, the government will not allow them to give back the bailout money, letting the government have some say in what they banks policies and procedures are.
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Keep in mind that the markets have moved up well over 20% in the last two months. We are not out of the woods yet when it comes to the economy. So be prepared for a healthy pull back in the indicies.
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Have a great weekend and happy trading.

Tags: Economy, Getting Started In The Stock Market, Stock market for beginners, Stock market news, Stock trading

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Today In The Stock Market

With a hour left in the trading day, the stock market has been pretty flat. There have been some great gains with a few stocks as well as some big losses in others. That’s typical in any day of trading, but is this a typical day? On a regular day in the markets, yes it is.
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This morning would have been good if I went ahead and bought into some companies that I’ve been looking at, but as I’ve said in the last few posts, I don’t have too much confident in the markets.
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So should I concern my myself with the money I could have made today doing some day trading? No. There will be some great opportunities in the near future for me to capitalize on.
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The agricultural and consumer staple sectors have done good today. It would be nice to see them hold those gains.
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On a typical day we just might see a sell off come in the last hour. If it does, I’ll be ready to buy on weakness.

Tags: How to make fast money, Stock market for beginners, Stock market news

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Will The Stock Market Retest The Lows?

This past month has been great and the way the “experts” are talking, you would think that the bottoms have been found in the stock markets. If we are to learn anything from history, it’s that it tends to repeat itself. During the Great Depression, the markets experienced bull rallies a few times only to reach a new “bottom. The process was dragged out from 1929 to 1932.
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We only started seeing the signs of a downward spin in November 2007. So what makes them think that we’ve seen a bottom? When the S&P 500 hit 741 and started to climb back up, We heard that this could be the bottom. Only to pull back and fall even further to 666. That level was reached on March 9, 2009, a year and five months after it all started. Throughout that time we also were told that the credit crisis and the housing was so screwed up by “improper practices”. How could this all be figured out and solved in such a short time.
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Now we’re hearing reports about how some banks that received government money, are looking to give it back. On top of that Goldman Sachs just reported that they nearly double what The Street had expected. Something doesn’t make sense and because of that, I’m expecting us to see the markets drop back down to the lows of March 2009.
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Another thing to take into consideration is that Barack Obama stated today in a press conference that we will still see an increase in unemployment as well as foreclosures for some time.
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Do I think that the S&P will fall below 666 soon? That I can’t answer, but I can say that it will be down to that level again before the end of the third quarter of 2009.
In the meantime, I’m going to continue to be a trader and not an investor. I suggest you do the same. If you don’t have time to do your homework on stocks you’re going to invest or trade in, don’t jump in right now. You will see that there will be another opportunity to get back in at lower levels.
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Happy Trading

Tags: Economy, Foreclosure, Getting Started In The Stock Market, Stock market for beginners, Stock market news

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Bear Market Rally

What a week this has been for some great gains. Just more to add to the already increasing portfolio since the DOW hit the 6500 range. On March 9th the DOW was at 6547.05. In less than three weeks the market now sits at 7924.56 going into Friday morning trading. I don’t know about you, but if you haven’t taken your profits and locking in those gains, you are just being greedy.
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Everything points to this movement to be nothing but a bear market rally. In the last three weeks the Dow increased 18% while the S&P 500 and the NASDAQ jumped 20% during the same period.
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We are not out of the woods yet. The economy is still in disarray and current Administration doesn’t have all the answers. Whatever the reason for the stock market performance, it’s not going to last or even to be able to sustain these levels. Just because Jim Cramer has stop screaming “the sky is falling”, because he says the “Great Depression II” is off the table. Remember that after the initial crash in 1929 to the actual “bottom” in the stock market, there were quite a few bear market rallies.
Yes, the prices of stocks fell over the long three years, but in between those years there were times when the market experienced a nice 10% to 20% gains in relatively short periods of time, only to drop back down to it’s bottom or even lower levels.
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I’m quite happy with the 22% gains I’ve made this month. I started scaling back my position and taking profits on Monday. The prices of the stocks have continued to climb after I sold many of the shares. I’m not going to get greedy and think about if I didn’t sell any of the shares I would have had more profits than just 22%.
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No one can ever predict a “bottom in the market or in any one stock, the same goes for trying to do the same at the “top”. The whole idea to never buying all your shares at once is to lower your dollar cost average. The idea of scaling out of a position is to secure your profits.
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Be ready for the pull back in the stock market as it’s exactly what I’m expecting to happen in the next three weeks. I’ll pick up the same shares I sold, but at a lower prices.

Tags: Economy, Getting Started In The Stock Market, Government spending, Stock Market, Stock market for beginners

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Momentum In The Stock Market

This past week has been great for profits in the stock market, but only if you get out before the momentum stops and the prices come back down from the profit takers. After the DOW fell below 7000 in the last month, there hasn’t been much of a bright side to making money in the markets unless you’ve been shorting stocks. Of course of you don’t have a margin account, you’re not able to short stocks.
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In the past week there has been great gains a many of the stocks that were beaten up during the fall of the DOW. The only way for you to hold on to those gains is to sell. If you don’t take your profits, then you didn’t gain anything if the prices fall again.
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With what’s going on in Washington, it stands to reason that the upward movement that we’ve just experienced in this week, is just a temporary one. Capitalism is under fire with all the spending that is going on in the government. Many companies are laying off people and it will continue throughout the rest of this year. Even though Caterpillar has announced today that they will be hiring back many of the 2,400 employees that were recently laid off, there are other companies that are not in the same position as them. Caterpillar will be involved in many of the infrastructure contracts that will be created by the stimulus bill.
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If didn’t get into Caterpillar when it fell below $22, then you missed out on some of the great gains that the stock has made. It’s not too late to buy into Caterpillar even at the $26 range. I expect good things for the stock over the next year.
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As for other stocks that have made some good moves over the last week, Sirius XM Radio has moved from their recent low of $0.05 in the latter part of February to where it sits now at $0.3362 per share. I’ve talked about Sirius in the past and still favor the company to come back from their near extinction. With it great move of 43% just today, I will be taking some profits and look to get back in on a pull-back.
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Remember to be aware that the turmoil is far from over and there will be pull-backs on most of these stocks that have had momentum gains. Trade carefully and don’t be greedy.
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Happy Trading.

Tags: Buying penny stocks, Economy, Getting Started In The Stock Market, How to make fast money, Stock market for beginners, Stock trading

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Stock Market Technicals

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I’ve been warning many of my readers that the stock market will take a dive very soon and from the looks of the last few days, that time has come. If you look at stock market technicals, you are aware that the DOW at a level of 7550.00 is a level that would cause many sell-offs to happen.
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Today’s lows of the DOW was 7551.01, which came very close, but not to the point where the sell off would have occurred.
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I said it before and I’ll say it again, you need to keep plenty of money on the sidelines for times like these when the prices for stocks in good companies are at a great “sale” price. These companies are not damaged, just the stock prices are. You need to be ready to take advantage of these buying opportunities to help grow your portfolio during a bad economic down-turn.
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For those of you that have had patience over the last month or so, this just might be the time for you to jump in and build a good solid position in the companies that you’ve been watching. I’ve been holding back in jumping in with both feet and with the stock market down at these levels, it’s hard not to just dive in head first. Of course I won’t involve my emotions in the markets.
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Who knows where the markets will be in a month or two from now. Especially with the fact that Obama’s stimulus plan hasn’t really been accepted by Wall Street and Main Street. On the news of the plan being approved, the Dow has dropped quite a bit. The markets can hit that crucial level of 7550 and all bets will be off, the sell off will begin and it won’t stop until it get to about 7300 basis points. Then again it may just take back off to the 9000 level just like it did not too long ago.
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No matter what, the rest of 2009 is going to be a total washout and the only way to get your portfolio to grow is to make trades when the time is right and then get out while the getting is good. Either way the market may go either way over the next couple of days, you should keep an old saying in mind, ” hope for the best, but prepare for the worst”. This way you’ll be ready without being disappointed.

Tags: Diversified, Economy, Getting Started In The Stock Market, How to make fast money, Stock market for beginners, Stock market news, Stock trading, The Week Ahead

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The Stimulus Plan Doesn’t Stimulate Anything

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Well, it’s been three weeks since Obama has taken office and he’s already having a hell of a time trying to get his administration candidates approved as well as the stimulus package. To top it all off it seems that Wall Street along with Main Street have not confidence in the new President.
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The Dow had a horrible day today because of all the “politics as usual” mentality going on in Washington. The government laid out it plan for the financial bailout which basically told us nothing in regards to specifics. It seems that all that Tim Geithner told everyone was that the government will spend more than $1 trillion in private and public support, but really nothing else.
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Wall Street went on a selling spree to unload many stocks to take refuge in safer investment like gold and bonds. The DOW fell 382 points today which is over a 4.5% drop.
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The Treasury’s plan is to restore the credit markets. To work towards removing the bad assets from the bank’s books. They also state that it would help open the path for consumer and business loans. If it is anything like the first TARP plan, they know that they’re going to spend $1 trillion, but they have no clue as to how they’re going to spend it.
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All I got to say is that after last night press conference and today’s treasury announcement, they’re proving to me that this administration has no idea on how to fix this problem and take care of their lobbyist and other cronies at the same time. It’s sad to think that if they really wanted to end this nightmare of a recession, all they have to do is stop the federal spending, cut the taxes and the rest will take care of itself in a short period of time.
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Why would the government need to raise taxes if they aren’t spending as much money? If they have to cut jobs, so be it. If the corporate taxes were less along with payroll taxes, companies would be able to hire the people they would be laid off from the federal jobs that were cut to save on spending. I’m not a genius, but it doesn’t take a rocket scientist to figure that out. Go to any Ivory league college and ask an economic professor and they will tell you the same thing. The less they spend, the less they will need to raise taxes.
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As for the stock market, the DOW close at 7,888 and at this level it’s nothing but a buying opportunity for traders who are looking to a few good deals. Do your research and buy incrementally.
Happy trading.

Tags: Economy, Financials, Getting Started In The Stock Market, Government spending, How to make fast money, Investments, Stock market for beginners, Stock market news, Stock trading, Treasury Dept.

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A Bad Day In The Stock Market

A bad day in the stock market can turn out to be a great day the next. Then again there’s days like today that can show you that there’s more of these days to come. Either way, you need to be prepared for both.
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A great deal of bad news came out today that confirms that this slowdown as well as the financial crisis will continue for quite a few months. The news of the new homes sales showed that it’s dropped over 14% in November and compared to last year, it fell 44%. This news hit the construction sector for about 6%-8%.
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To add insult to injury, Initial jobless claims revealed a jump in claims to 588,000. I’m sure that we’ll see more numbers like that for the better part of 2009. In this week alone, we’ve heard of other major companies announcing that they too we be having lay-off in the coming months.
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To top it all off, we have this stimulus plan being passed around Washington that will do a lot for America, but not in the way of actually stimulating the economy. I spoke a few weeks back about the expected stimulus bill could mean great things for the alternative energy sector, amongst other things. Well it seems that this bill will not really do anything for the economy for roughly eighteen months. In the mean time, Washington will be going on a spending spree.
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With the way it’s all going in this country, I’ve pulled out nearly 90% of my capitol out of individual stocks and into more sound investments. I’m not even worried that I won’t make any really good gains because of me sitting on the sidelines, instead, I’ll be able to sleep at night better knowing that I won’t be experiencing any big losses. I’ll get back into the market later in the year.
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That doesn’t mean that I’m not continuing to do my research. I still watch and listen to the TV and radio to keep in touch with the latest news. It would be foolish for me to fall out of touch with the economy, but that doesn’t mean that I have to trade stocks. When I started to be interested in the stock market, I would listen to the news to understand the markets, long before I had money to invest. When I finally had the capitol to invest, I was more prepared.
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If you’re one of the many who’ve taken themselves out of trading because of the condition of the economy, make sure you keep up to date with everything for when you decide to jump back in.

Tags: Economy, Getting Started In The Stock Market, Investments, Stock market for beginners, Stock market news, Stock trading

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Stock Market Research Could Pay Off In The Coming ...

It’s only a couple of days before President Bush leaves office and Barack Obama takes over. Typically the stock market have improve to some extent when the new President takes charge, but what are we to expect when it’s Obama’s turn? If you follow this blog on a regular basis, you’d know that doing some stock market research will help you prepare for what’s to come in the next month.
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Obama has been working on his stimulus plan for when he takes office. He’s spoken about the infrastructure needs to stimulate the economy. When a politician talks about infrastructure, he basically is referring to roads, public transportation and things of that nature. It seems that Obama’s plan is more in line to boost the green energy sector to help remove our dependency of foreign oil and to reduse green house gases.
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If that’s the case, then we need to focus on some stocks that could benefit from that type of stimulus plan. From what I can tell he hasn’t really spoken to T.Boone Pickins for some advice on what this country needs to do to remove that dependency. I’m incline to think that Natural gas may not be something the Obama is looking towards to help that along. I will say though that Natural gas has made some nice gains in the last week or two. I have been invested in natural gas for sometime and have prospered from those gains and taken some profits in it, but I do hold some interest in a company that should continue to grow.
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What about solar, wind and nuclear energy? I think in each of these areas that there are some stocks that will benefit from the stimulus plan that will most likely pass once Obama is in office. My advice is to look at the leaders of each of those areas and do your research to see if they can make some gains from the plan.
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The only stock that I will recommend at this time would be a company that I’ve spoken about before on this blog. The company has basically bottomed in the last month or so and I have jumped in and out of it a few times with some good gains.
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The company is Quanta Services Inc. This company will prosper from the plan in couple of different ways. It’s a infrastructure construction company that focuses on alternative energy. It has a strong balance sheet as well as some good guidance for the coming quarter and fiscal year. It’s presence in the alternative energy sector is also strong.
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As always, I will tell you to do your own research to see if this trade is right for you. Later this week I’ll have another suggestion for you portfolio.
Happy trading.

Tags: Alternative energy, Getting Started In The Stock Market, How to make fast money, Stock market for beginners, Stock trading

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Stock Prices Are On The Rise

After the year we had I the stock market, it’s nice to see stock prices on the rise. Today the DOW closed at 9015.10, up 62 points for the day. I know that 62 points isn’t really much, but I’ll take whatever I can get on the positive side.
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Stock prices have been rising steadily since the end of November. The Dow is up 19% since it’s November lows as well as the S&P 500 is up over 24% within the same time frame. I hope to see this continue. Especially after the news of Alcoa’s plans to cut 13,000 employees, roughly 13% of the work force, I look forward to see what will come in the next month.
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it seems that everyone globally has plans to pass out a stimulus plan of some sort. China is now reporting that they will have a stimulus plan of over $600 billion. Germany has released information that they too will have a stimulus plan. Everyone is getting happy with someone else’s money to stimulate their own economy. I don’t know about you, but doesn’t it sound odd?
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With all the news coming out that the U.S. can possibly see the light at the end of the tunnel sooner than expected, many traders are moving their capitol out of the consumer staple and health care sectors, which is what happens once the economy starts to show signs of improvement. To me I think it’s just been a good 5-6 weeks and I’m not expecting miracles of the stock market going up from this point without any temporary set backs and corrections.
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On top of all this news (particularly positive), it seems that another billionaire committed suicide. German billionaire Adolf Merckle stepped in front of an oncoming train in Berlin after leaving a note to the reason of his actions. It’s a shame that these wealthy people end their lives after they lose all their wealth. It just goes to show you that money can only make you so happy. This is the fourth person since September to end their lives because of their financial woes.

Tags: Economy, Stock investments, Stock market for beginners, Stock market news

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