Wizard training Course February 12, 2009 Thursday Evening
The stock market was down as much as 247 points on the Dow30 at the last hour and made a last hour comeback after a report of Obama considering making mortgage subsidies to homeowners. A government plan to subsidize troubled homeowner's mortgage payments helped the Dow30 rebound and erase almost all of those losses. The NASDAQ Composite ended up 11.2 or .73%. This shows the market is not totally lethargic and dead but has some buying power and willingness to buy on good news.
It is like a hospital patient who is semi-comatose but can be brought back to life by a defibrillator (heart zapper). The Dow30 was close to a "dropping off point" to the November 21st lows. This isn't just a psychological support line but probably a variety of triggers could occur from margin calls, more redemptions requests that caused a lot of October and November selling, and another cycle of retail investor's fears. But again I say, we can make the most money in any market when we let the group herd follow each other down a path and then we position ourselves to take advantage of that non-thinking behavior.
For those of you who have studied the Wizard Training Course (or are about to), that is the very underlying thesis of the Bullshorts technique and I've made millions on that one technique alone. (Required statement: These results are unique and profits are not guaranteed!) So needless to say, I love group behavior. As a group in large numbers, people are not very smart. But for the prepared individual who is trained to recognize opportunities, the rewards are high.
So to quote myself…. "Money flows to those people who have had the best training, are the most prepared and have the most discipline and they take it from the people who have had the least amount of training, are the least prepared and have little discipline."
Cut and paste this to a new document, enlarge it and tape it to your door or your bathroom mirror. Hopefully this motivates you to study this process of making money in the stock market more diligently and learn about yourself and observe the patterns that help or hurt your trading or investing decisions.
Let's use a little common sense here with these bailouts and government actions. No government is large enough or has enough money to make up for all the mistakes that banks, mortgage companies, and individuals who bought mortgages that could not be realistically be repaid. The very thought that the government could help people pay their mortgages will bring that government to the edge of the cliff along side the people they are trying to rescue. I am not interested in politics but this just makes
no mathematical sense.
The nice little pop we got in all stocks in the last hour which erased the earlier losses the indices were showing is likely going to be just that backing and filling action discussed the last few days. It seems most logical that the market drifts lower when people realize that the government bailing out homeowners would likely not be affordable or be passed into law. Then the details of that kind of plan and the bickering among various politicians and advisors that comes with it will likely splash cold water on the market and then there goes that last hour's gains with even lower stock prices. That is a very likely scenario, the same kind of pattern we have been seeing for months.
The technical indicators are supporting the idea of lower lows and again to repeat yesterday's report, that November 21st lows are probably going to be reached. If the market indices reach that November 21st low and is accelerating to the downside if it passes below and through that number, then we could likely get another very strong rebound that may last days to a couple of weeks that could give us more big profits similar to what we saw in the banks last Thursday and Friday. (Look at BAC, JPM, WFC, and others in your daily charts).
Tomorrow is Friday and it is Russian Roulette to buy stocks to hold over the weekend and with intraday trading SO PROFITABLE right now, that is the area to focus on. For those of you who have had a negative image of "day trading," which is intraday trading or scalping, I would advise you to reconsider. After profit potentials in may stocks like examples below in just ONE DAY, try to open your mind up to this very powerful technique.
MOS 7.25%
MON 3.6%
AGU 6.5%
POT 7.1%
BAC 10.0% late day
HNT 8%
AAPL 3% late day
WCG 4.0%
SGR 4.4% late day
These are just a handful that I followed but many stocks had big profits today using this technique. Bottom line…..we go where the money is and the techniques shift according to the market conditions and over half of the days in the last 3 weeks have had very good to excellent (today was outstanding) trading using the technique shown in the tutorial accompanied with this report. Please take time to atch this tutorial this weekend, maybe on Saturday morning before you start your day.
When the market shifts again to allow reliable, high probability swing trades, then we will shift toward using that technique but right now, we are "in betweenie" good setups for swing trades. When the market stabilizes even more and an obvious trend develops, then the intermediate trading technique will be used. But it is financial suicide to buy tomorrow on Friday and hold over the weekend for very much of your portfolio in percentage terms.
Let's get on with some stocks and how we can make some money.
Oil prices has dropped sharply lower today by another 4.75% after yesterday's 5.6% drop. Light sweet crude oil closed at $34.29. We are right at the support line of the January 20th, 2009 low of $32.60. Keep watching the smaller independent ones like XTO, APA, APC, EOG, COG, HAL and many others are likely to move first before the behemoth ones like XOM, BP, CVX or COP.
Intermediate Trade Positions: New ideas: none
Swing Trades: No new ideas. Recommend to not have a large percentage of your money long or short over the weekend.
Day Traders/Intraday stock ideas: See the list of stocks above for intraday stocks that moved today. Many others had big swings so Friday will likely be another excellent day for big moves in stocks that you can profit using the chart settings and indicators discussed in the tutorial with tonight's report. Keep scanning amongst these and other past favorites for good drop and pop signals.
Keep building your list. Don't just consider going long, learn to short stocks too. We will see profits that can be made both ways. If you are absolutely terrified and emotionally locked up to go short, then wait until you see deep drops (on stocks that don't have disastrous news) and then look for a buy entry signal. That could be called big drop and big pop. Continue to watch ICE, BLK, CME, POT, MON, MOS, AMZN, AAPL, FSLR, BIDU, WFC, JPM and any high volume, high volatility stocks.
NOTES: This isn't the time to "buy and hope." It is the time to use them and lose em. 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.
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
It is like a hospital patient who is semi-comatose but can be brought back to life by a defibrillator (heart zapper). The Dow30 was close to a "dropping off point" to the November 21st lows. This isn't just a psychological support line but probably a variety of triggers could occur from margin calls, more redemptions requests that caused a lot of October and November selling, and another cycle of retail investor's fears. But again I say, we can make the most money in any market when we let the group herd follow each other down a path and then we position ourselves to take advantage of that non-thinking behavior.
For those of you who have studied the Wizard Training Course (or are about to), that is the very underlying thesis of the Bullshorts technique and I've made millions on that one technique alone. (Required statement: These results are unique and profits are not guaranteed!) So needless to say, I love group behavior. As a group in large numbers, people are not very smart. But for the prepared individual who is trained to recognize opportunities, the rewards are high.
So to quote myself…. "Money flows to those people who have had the best training, are the most prepared and have the most discipline and they take it from the people who have had the least amount of training, are the least prepared and have little discipline."
Cut and paste this to a new document, enlarge it and tape it to your door or your bathroom mirror. Hopefully this motivates you to study this process of making money in the stock market more diligently and learn about yourself and observe the patterns that help or hurt your trading or investing decisions.
Let's use a little common sense here with these bailouts and government actions. No government is large enough or has enough money to make up for all the mistakes that banks, mortgage companies, and individuals who bought mortgages that could not be realistically be repaid. The very thought that the government could help people pay their mortgages will bring that government to the edge of the cliff along side the people they are trying to rescue. I am not interested in politics but this just makes
no mathematical sense.
The nice little pop we got in all stocks in the last hour which erased the earlier losses the indices were showing is likely going to be just that backing and filling action discussed the last few days. It seems most logical that the market drifts lower when people realize that the government bailing out homeowners would likely not be affordable or be passed into law. Then the details of that kind of plan and the bickering among various politicians and advisors that comes with it will likely splash cold water on the market and then there goes that last hour's gains with even lower stock prices. That is a very likely scenario, the same kind of pattern we have been seeing for months.
The technical indicators are supporting the idea of lower lows and again to repeat yesterday's report, that November 21st lows are probably going to be reached. If the market indices reach that November 21st low and is accelerating to the downside if it passes below and through that number, then we could likely get another very strong rebound that may last days to a couple of weeks that could give us more big profits similar to what we saw in the banks last Thursday and Friday. (Look at BAC, JPM, WFC, and others in your daily charts).
Tomorrow is Friday and it is Russian Roulette to buy stocks to hold over the weekend and with intraday trading SO PROFITABLE right now, that is the area to focus on. For those of you who have had a negative image of "day trading," which is intraday trading or scalping, I would advise you to reconsider. After profit potentials in may stocks like examples below in just ONE DAY, try to open your mind up to this very powerful technique.
MOS 7.25%
MON 3.6%
AGU 6.5%
POT 7.1%
BAC 10.0% late day
HNT 8%
AAPL 3% late day
WCG 4.0%
SGR 4.4% late day
These are just a handful that I followed but many stocks had big profits today using this technique. Bottom line…..we go where the money is and the techniques shift according to the market conditions and over half of the days in the last 3 weeks have had very good to excellent (today was outstanding) trading using the technique shown in the tutorial accompanied with this report. Please take time to atch this tutorial this weekend, maybe on Saturday morning before you start your day.
When the market shifts again to allow reliable, high probability swing trades, then we will shift toward using that technique but right now, we are "in betweenie" good setups for swing trades. When the market stabilizes even more and an obvious trend develops, then the intermediate trading technique will be used. But it is financial suicide to buy tomorrow on Friday and hold over the weekend for very much of your portfolio in percentage terms.
Let's get on with some stocks and how we can make some money.
Oil prices has dropped sharply lower today by another 4.75% after yesterday's 5.6% drop. Light sweet crude oil closed at $34.29. We are right at the support line of the January 20th, 2009 low of $32.60. Keep watching the smaller independent ones like XTO, APA, APC, EOG, COG, HAL and many others are likely to move first before the behemoth ones like XOM, BP, CVX or COP.
Intermediate Trade Positions: New ideas: none
Swing Trades: No new ideas. Recommend to not have a large percentage of your money long or short over the weekend.
Day Traders/Intraday stock ideas: See the list of stocks above for intraday stocks that moved today. Many others had big swings so Friday will likely be another excellent day for big moves in stocks that you can profit using the chart settings and indicators discussed in the tutorial with tonight's report. Keep scanning amongst these and other past favorites for good drop and pop signals.
Keep building your list. Don't just consider going long, learn to short stocks too. We will see profits that can be made both ways. If you are absolutely terrified and emotionally locked up to go short, then wait until you see deep drops (on stocks that don't have disastrous news) and then look for a buy entry signal. That could be called big drop and big pop. Continue to watch ICE, BLK, CME, POT, MON, MOS, AMZN, AAPL, FSLR, BIDU, WFC, JPM and any high volume, high volatility stocks.
NOTES: This isn't the time to "buy and hope." It is the time to use them and lose em. 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.
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
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