Tuesday, June 09, 2009

Ten Banks Repay TARP Funds as Quality Growth Stocks and the NASDAQ Take the Lead

Quality growth stocks and the NASDAQ took over leadership today as volume rose on the NASDAQ but pulled back on the NYSE. Volume on the NASDAQ ran higher all day long showing the price action had institutional support. Even more important quality growth stocks emerged once again as leaders in the market. Over on the NYSE volume was tempered by the financials as ten banks are set to pay back TARP money. Reaction was mixed from the banks as it was mostly priced into the market. Overall, notch another positive day for the market.

It was very nice to see quality growth stocks stepup and take over leadership as we need these stocks continue to lead us higher. We have seen a few quality stocks that passed their pivot points on volume. Being able to spot these winners and get in them is what this game is all about. In addition, getting the leaders with size, meaning your position size is a substantial part of your portfolio. For example: if you put on a 1% position, in order for your portfolio to grow 1% that position needs to move 100%. However, having a 10% position to grow your portfolio by 1% all you need is a 10% gain. Remember, this will only work if you are cutting your losses short. By not doing so, you run the risk of completely destroying your trading capital. Position sizing is important when you are in a confirmed uptrend with quality growth stocks are at the helm.

Highlighting cutting your losses, every successful stock market operator always cut their losses short. Many pros often times will cut a position with only a 3% loss. I for one will use anywhere between 3% and 8% cut loss. It is the "art" of managing your portfolio. Factors such as how leading stocks are acting, the overall market, and how the position is acting all go into factoring where I will cut a stock loose. Remember, you are trading to make money, not lose it. The most important part regarding managing your portfolio is cutting your losses short and being prepared to get into a leader.

All positive action occuring in the market with quality growth stocks leading and positive ratios such as the NH vs NL. More importantly, we are seeing excellent opportunities to get long stocks that are the leaders and we are not missing out.

Keep your eye on the ball and stay nimble.

top longs w/ TOTAL returns making money TODAY: ORS 22% AVNR 54% CHLN 48% ISTA 51% SIGA 55% ANV 32% KONG 85% COOL 39% ADAT 25% ASCA 31% ABVT 31% PALM 34% CAST 30% CRAY 30% NAK 21% FIRE 44% ARST 36% NGD 27% CLRT 25% RBY 33%

top speculative longs off the bottom TOTAL returns making money TODAY: TELK 45% RODM 32% CSUN 37% CSIQ 48% IPCS 61% CFW 61% GRRF 87% PWAV 98% AHD 21% TXIC 26% SOL 43% VIT 35%

FREE YouTube video to help teach you how to interpret market action CORRECTLY:

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