Real Time Stock Trading Advice -pt1

Daily Stock Report for Wednesday Morning, May 5

, 2010 pt1

US stocks sold off sharply to lower lows Tuesday supposedly on fears that other countries will face the same problem as Greece has but it is more likely that investors and money managers are nervous and wanting to capture profits earned. (So much for the forecast that the media wont focus on Greece for a few weeks!)

The old saying to sell in May and go away may be true again this year after a nice 3 month run up and a gain of 13% in stocks from the early February lows to last Mondays high.

The Dow30 was down over 2% Tuesday, the Nasdaq down almost 3%, the S&P 500 down 2.4% and the Russell 2000 was down 3.1%. This is clearly now a top that may last for several weeks and what the typical trading action is a little more selling Wednesday early in the session followed by some buying.

We call it backing and filling with the short term trend in a downward corrective action with lower lows and lower highs on the rebounds. We could even see some more sharp down days like today.

It is confusing for most people to understand what is happening during this action but there is plenty of profit potential especially with the most nimble of traders who are proficient at scalping and swing trading overnight.

There will be more opportunity to buy long again on the next bottom and it will be a challenge again to interpret if we have higher highs and the bull run continues. In the meantime, keep your stop losses set so you dont take big losses or give up much of your gains. If the selling continues, we are likely to be stopped out of more and more long positions, so consider reducing long positions on a rebound in the next few days.

Scalp of the Day: (all eastern times)

KERX, Keryx Biopharmaceutical dropped early and rebounded sharply for a profit potential of 12.1% (yes, twelve!).

These are the kind of trade ideas we will be giving in the Trading Room, which we are in beta testing right now. Put your email address and name on website page to be notified of actual launch date and info.

Mitch King is the founder of TradeStocksAmerica.com. All material presented herein is believed to be reliable but we cannot attest to its accuracy. All material represents the opinions of Mitch King. Investment recommendations may change without notice and readers are urged to check with their investment counselors before making any investment decisions. Opinions expressed in these reports may change without prior notice. Mitch King and/or the staff at TradeStocksAmerica.com may or may not have investments in any stocks cited above before or after this newsletter is prepared. Use the stock table above as a model portfolio of ideas that look attractive at the time of the writing. Comments can be hypothetical in nature. Opinions expressed in these reports may change without prior notice. Disclaimer - Stock investing or stock trading has large potential rewards, but also large potential risk. There is risk of loss as well as the opportunity for gain when buying or selling stocks, bonds, option contracts or engaging in any strategy listed in the Daily Stock Report, The Wizard Training Course, The Trading Room and our seminar or workshops. You must be aware of the risks and be willing to accept the risks when investing or trading in any financial markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell stocks. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

by: Mitch King

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