CR GREATEST HITS©
The markets will be marked by increased volatility. Beware of big swings and playing the middle ground of stock charts. If you are looking to maximize your profits and minimize your risk only buy stocks that are trading above their 20-day-moving-average. Also, only buy stocks or go long on anything on days when the NASDAQ is trading above its 20-day-moving-average, as the NASDAQ will be a more steady market. We see the markets pulling back in June so be careful about being long on too many investments between now and the middle of June. Here is what we recommend to maximize your profit.
(NEWS proof) Go long the DOW at 12,890, go short the DOW at 12,505. Go long the S&P at 1,370, go short the S&P at 1,328. Go long the NASDAQ at 2,888, go short the NASDAQ at 2,804. Look for stocks with good momentum. One way to pick them is stocks that had earnings that were up 70% or more in their most recent quarter. These are the big momentum stocks. Never put more than 5 to 10% of your investment capital into any single trade.
QUESTION: Can you see what it’s going to be that will cause the markets to pull back in June?
ANSWER: Primarily more worries from Europe, as well as poor housing numbers, job numbers and consumer sentiment. The nervousness over retaliatory terrorist strikes won’t help either.
QUESTION: How can consumer discretionary stocks do so well when consumer’s discretionary cash is down?
ANSWER: Much of the volume in the markets is the front-running of stocks by program trading and large traders moving in and out. It’s not the retail investor moving the markets.
QUESTION: What do you see for the banks and the financial stocks?
ANSWER: As long as they receive almost-free money from the Fed and make big interest on it before they have to pay it back, they will continue to show good profits each quarter. It’s the hidden accounting that will eventually bring them down when the support money and quantitative easing stops.
QUESTION: In last month’s CR News Reports© on the Stock Market you said that it’s time to invest in other markets – what markets?
ANSWER: Wireless communications markets in developing companies, not just the providers but the infrastructure companies. Also, oil and energy stocks in the BRIC countries and beverage and snack food companies who are expanding into foreign markets.
QUESTION: Recap the most important points in your message today?
ANSWER: Our message is that it is dangerous to get caught in the middle of a stock chart. Watch for the buy and sell points we recommended.
QUESTION: Why is this information timely?
ANSWER: This information is timely because people are looking to make quick profits and that is the time when they get burned.
QUESTION: Tell our readership the best way to apply this information to their life right now?
ANSWER: If you are a trader enter into new positions a third at a time.
COMMENTARY: One of the hardest things to do when you are looking to make a quick profit is to exhibit discipline in your trading. It is especially hard when there are volatile swings each day in a market. You can be up in the morning and down an hour or two later. If you wait for the correct entry and exit points, you will take much of the stress off your trades and sleep better at night.