Bulls Battle Bears

Well Wednesday did start off with another rally, but with shorter legs, this one managed only to pull out minimal gains towards the end of the day, but still, for the first time this year, we had a winning streak going on the markets.

Yesterdays monster rally was connected to the fact that (C) was going to be doing better than expected and many people had to cover their short positions. Today, there was not really that sort of mentality but still, the bank sector did lead another gain on Wednesday.

Here is a 1min video on the Market Wrap for March 11th:

Overall, the markets did offer some good plays. If you notice, (BAC) was up early in the day and as its price fell from its peak, (SKF) began to rise, this would have been a good play for today to double dip on the markets.

Personally, I managed to get in for 1000 shares with (BAC) at an even $5 and as the steam pushed it quickly up, I placed a limit sell at $5.41 which was easily reached before falling back down.

Total profit on (BAC) = $410

I wanted to get into (SKF) as soon as I told my position but with the heavy volume pulling (BAC) down before going up again, I felt like I had missed a chance to really pull out a substantial profit (although a smaller one could have been made).

Gold was up nicely again today also with my (AUY) doing well. I have talked about this stock many times and felt it was a good buy with an ability to crack $10/share. It has come down for the last while, but has had the ability to rally.

Monday I did talk about (RIMM) and its chance for a rally after hitting bottom from its fall and the last couple of days has pushed that stock back. I really am kicking myself for not jumping in on the chance to pull out a profit that was destined to take place. So many stocks to choose from at times! For a long position, this stock really has some steam of go back up and a loyal customer base and a iTunes like store for Blackberry products will really start pulling in more revenue.

Also, here is a great video where a floor trader is talking about “dead cat bounces” being the reason for the current rally. He also makes some great general points which can help with your trading strategies:
In the news:
Freddie Mac (FRE), the mortgage-finance company thrust into a leading role in President Barack Obama’s homeowner rescue plans, said it will tap an additional $30.8 billion in federal aid after loan holdings and other assets deteriorated. Link. I was looking to get into this stock when it was around $0.60/share and its down about 30% from that point, hopefully this is an entry point where a position can be put into place for a nice return.

Spending plans that major countries around the globe have put in place to combat the worldwide recession may not have the strength to make it to the late rounds of the crisis, Treasury Secretary Timothy Geithner said Wednesday. Link.

EBay Inc. said Wednesday that it plans for total revenue to increase by as much as 40% over the next few years, with a big component of the gains coming from its PayPal business. Link. EBay has been steadily falling for the longest time and many people have gone elsewhere when it comes to auctions and online marketplace transactions.

Important new short-selling rules. he U.S. Securities and Exchange Commission aims to issue a proposal in April to restore the so-called uptick rule and will look at other ways to address short-selling in the stock market, SEC Chairwoman Mary Schapiro said on Wednesday. Link.

For Thursday, there is really only the financial sector that could pull out a nice gain. For a long position, I am looking at gold again as its still pegged to rise in the coming months and oil stocks (XOM) as the plunge in price today has me comfortable in taking a long position with some of my cash that has been sitting in the money market fund collecting very little interest.

Happy Investing!

Aman, MBA