subject: Buying Stocks Pt 1 [print this page] Daily Stock Report for Friday Morning, November 27, 2009 pt1
Stocks are going to open down hard tomorrow on the news that Dubai is probably going to miss debt payments. They describe it as restructuring but that is essentially defaulting on their debt payments so the world markets at this moment are down sharply.
This is going to re-ignite the financial fears we saw over a year ago but this should be short-lived compared to the USA crash we saw start last year in September-October 2008.
But it may be the excuse the market needs to start selling and capturing the profits made so far this year. There is a big incentive for mutual fund, pension managers and hedge fund managers to take profits especially since we are close to year end 2009.
Japan is down 3.2% and Hong Kong is down 4.84% and the Dow30 futures are indicating a down opening of 2.9%.
This could start a downtrend with this much of a spike down and going into the weekend there is going to be more fear stirring in peoples minds, so Monday could have a follow through on the downside.
Any shorts are likely to accelerate to the downside, like the bullshorts you may have open such as NLST, SEED, NABI, SQNM and even some of you may even have OPTT short. Depending upon how much these drop, Monday is probably going to be the right day to cover unless they drop sharply tomorrow.
Scalping long both the bullshorts and long positions that drop tomorrow is probably not a good idea because there will be too much fear because buying will be muted.
The recently purchased long positions are likely going to be stopped since stop loss limits are usually set just below the purchase price or a trailing stop loss of 5%. This may be a good time to start developing a list of your favorite stocks that have been trending up well these past months that you might have missed on the long side.
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