Basically we got 50/50 right now, which is why were under red light. We already have plenty of trades on the table, which are in good shape. When in a congestive period we want to be long but we don’t put on more risk until the market shows a more definitive direction.

The Anthony scale is the most accurate timing indicator created. When it says a stock should move higher, and the stock doesn’t, then that tells me time to not put more trades on, until the momentum returns.

I will put together a focus shopping list for us so we are ready to start booking trades given the chance, but for now, no new trades.—Jon

The funniest part of being a trader as opposed to an investor is you get to trade events that happen week to week. The idea of trading is to keep your portfolio moving upward. Stocks move sideways 70% of the time. We trade in an attempt to avoid this down time, slowly but methodically adding gains to our take week over week.

60% of a stocks movement is the sector it is associated with. Another 30% is technical in nature, more buyers than sellers for a host of reasons. Then there is that 10% of the time that is news driven. News driven is fun, but the shortest lived of the 3 reasons stocks move.

Having a crop report that comes out that is favorable to corn producers, is an obvious tail wind for stocks in the sector. Now we just don’t blindly go pile in to this sector, assuming it will be a winning trade. But, it’s an obvious piece of the puzzle that we put together every week when selecting the focus list stocks.

Bottom line, sometimes the best trades are the obvious ones.-Jon

The headline tonight, “Dollar Tree Stores, Inc. Announces $150 Million Accelerated Share Repurchase”.

Looks like to me DLTR is getting their financial house in order on advice from Goldman, in order to make themselves a more attractive take out target.

My original target price was $39, however we will hold this stock into Merger Monday no matter what the shares do Friday.—Jon

If you refer to my blog last week, we are still under the 1946 trading playbook. The market still looks on track to make a new high, before a confirmed downtrend goes into affect. So far we have made higher lows, and higher highs since the pullback. The best part is the big money players, don’t believe the pullback was deep enough, thus they have money to put to work still.

The market will force their hand if it can hold and continue to work higher. However, we need to do a Generals check in order to confirm out position.

Looking at shares of AAPL, GOOG, CSCO, GS, AMAZON, MCD, you will find most of these shares are at or above their 10 day sma, all above their 200 day sma. This means the market internals are good, and confirm our trading style.

We did get a distribution day yesterday, although event driven, I do have that noted in the playbook as 1 for the bears.--Jon

Here is the headline,” Riviera Holdings rejects riv acquisition holdings' March 26 merger proposal”.

This is one we pointed out last summer when the stock was $18 a share. The CEO got some investors together and got the board to agree to sell him the company at $18 a share.

The largest share holder went nuts saying that grossly undervalued given what comparable land was selling at in Vegas. They placed the value in the mid 30s.

Now, in casinos, by Vegas law you can only own up to 9% of stock unless you have a gaming license. Hedge funds are not into getting gaming licenses, so these guys circled the wagons with some other large shareholders, started buying up the stock, and the fight was on.

Well here we are 6 months later, the stock is $28, and just rejected an offer at for $27 a share, much higher than the original $18 a share offer a few months ago.

I love trading, but part of my enjoyment is bringing you stories like this because I just find them interesting to watch. If a person finds every aspect of this game fascinating, they have a greater chance of success long term.—Jon

Question,” Jon, I know you are the stock market pro and guru and your results speak for themselves! But I can’t understand why you let profitable stocks turn to a lose? I know you gave me the breakdown yesterday, but I still cant see why you would let CMG go all the way down to 62 when you had a profit of 1$? You could have locked in a gain and buy it again at a lower price since it is keeping trend... “

Answer, “I appreciate your question.

What does “profitable stocks” mean? In other words, if we buy CMG at $63, and it moves to $63.10, do we not allow the stock to drop back to $62.95, because it is a “profitable stock”? Be honest, if you bought at $60, sold at $61 to protect profit, but next day stock goes to $63.50, would you have bought it back? If you did, it pops to $63.60 after your pay $63.50, but closes that day at $62.25, did you sell?

Next day goes up $2 to $64.25 only to open the next day down $1 at $63.10, but closes higher at $64.50, because of some news event. Were you able to get in and out correctly?

Every body can trade from yesterday’s news. I have to put the puzzle together to anticipate tomorrow, next week, next month, based on experience, past market history, and current trading indicators.

What data were we working with? Bad Housing number, Bad GDP, rising oil, and a Fed that just last week moved closer to cutting rates. We do not sell stocks going into a Fed statement that indicates they are going to cut rates.

Now we are right using this method, 94% of the time, but not 100%. It might turn out, the right move was to sell CMG, and it won’t be the first time that has happened.”

The stock market makers and our brokers depend on volatility and uncertainty. That is when people make emotional trades, not informed ones.

Money is never made or lost in the stock market, only transferred. Please Don’t transfer your money to the stock gods by trying to trade every point.-- Jon Anthony

We of course have to account for the overall market bias, but I have factored that in to the decision to hold.

Bottom line - If we sell, we don’t have anywhere else to go, but will be tempted to put the money to work. We will not be in position to take advantage of a market up swing.--Jon

The month of March has shown why 95% of people who attempt to make money in the stock market fail. The market is an emotional roller coaster that is very hard for anyone to stomach.

Volatility is how the pros make their money. Brokers and market makers depend on you jumping in and out on every up/down tick, good/bad news. It’s important that we look at the internals, balanced with current news headlines, balanced with historical patterns during a given time frame of the year. Then we look at how our current long positions are acting and reacting in that environment.

You take all that information, and put it into a playbook with several possible outcomes, and your game plan based on which story ending you are seeing.

Now, before we got the last up move, we got a bunch of churn days at the DOW 12,000-12,100 level, just like we are getting now. Since the March 21st follow through, there have been no declines on high volume, or distribution days. Monday, we staged a bullish reversal day, closing at the highs for the day.

Studies of failed rallies over the history of the stock market shows the biggest % that failed, came after a distribution day occurred within 5 days after a big follow through up day. We have not gotten that yet, so playing probabilities and the odds, the uptrend is our friend for now.—Jon

Ok so far after hours we had Oil spike $5 on rumor of Iran and US standoff. Wal Mart CEO Lee Scott said in an interview 2007 feels like a tough year because of rising gas. Sub Prime Home Builders are under investigation.

The problem with things like this is it always happens after hours, everyone tries to sell at the same time in the morning. By the time you can get out that is usually the bottom price.

What ever happens in the morning, do not panic. We own top to bottom, A+ rated stocks. The cream will rise to the top and once clear heads prevail, these stocks will be higher than they are today.

Lets let Bernanke get on the tape, and see what he can deliver. I have seen these markets go up huge when we get a surprise early rate cut, or a hint at one.—Jon

Ok, 3 possibles for HURNs big drop in order are;

Or the Mutual Fund is just raising cash and does so by booking profits on their profitable positions. Again, not a problem, just have to be patient.

In case of door #3, its sucks but it happens. We will make the money back trading other stocks very quickly.--Jon

Moving average battles are as old as the stock market. They are defined areas that big money use to place new bets or take money off the table.

Now, a lot of things come in to play that affect this battle, but bottom line, the more days the bulls can hold the line, the more bullish it is, the more times the line is tested and we fail to hold, the bears win.

Right now we are 50/50 and I am watching to see if Mr Bernanke can be the tie breaker.-Jon

Retail sales came in strong, as we suspected given the shopping that we are seeing at the stores. Consumer confidence came in weak, which conflicts with the retail sales number. This is how the data has been for a while, contrarian. I think the trump card however, is housing for the Fed which points to the need for a rate cut.

Lets hold on today and see if Wall Street is really scared, or big money just trying to get a better price before they move inventory higher.

We are looking for a bounce by end of day to confirm.--Jon

It’s tempting to put a few next number rules in for some of our longs, but we need to let this ride an extra day. The last thing we want to do is chase stocks. We have to front run things, anticipating an outcome, then having that happen is how you trade profitably.

We are looking for a strong consumer confidence number, along with a Fed that is moving towards a rate cut bias. I think housing data puts Bernanke in a box, and forces him to move on rates to avoid a housing melt down, even though inflation data is a little stronger than he would like.

If we don’t get these two things, then that takes us out of the drivers seat, and forces us into cash quickly.—Jon

Today's action has been nice and orderly, a give back day that is not filled with a sense of panic. The reason we went TSI Yellow today is because the odds of the market pushing higher today were stacked against us, after the nice run up last week. Its totally normal and expected to give some back and even healthy to test the 50 day support levels.

I would love to see the day finish green, that will be an obvious buy signal. However, what we have going right now is good as well.

Did you happen to go shopping last weekend? People were out spending money big time. Consumer Confidence seems high to me based on everyone out spending money.

I really don’t foresee any data the rest of the week that will be damaging enough for the bears to run with. We of course will trade things as they are, but as of now, it looks like we are going TSI green on Tuesday.--Jon

A bunch of data coming out this week. As always, the data is not what we are watching, but the reaction to the data. We get housing info on Monday, Consumer Confidence on Tuesday, Durable Goods Wednesday, GDP Thursday, and Personal Income Spending plus Bernanke on Friday.

The DOW sets about 10 points above its 50 day sma, lets see if it can hold that level. If so, we will switch to green light right away. Trading under caution Yellow doesnt mean we dont trade, just means we take fewer trades, more defensive stocks or ones with a catalyst, and keep our finger on the sell trigger ready to go.

Keep an eye on these 4 stocks, ALJ, SPAR, WFR, VRGY. These stocks are good set ups, but under caution Yellow, we do not trade on Mondays. Lets let Monday play out before we take new positions.

Dollar General reports Monday, if Wall Street likes the number, good be good for our Dollar Tree. If the number does not impress, then Dollar Tree probably will take a hit. So, dont over stay your welcome in Dollar Tree if the DG numbers are not favorable. Lets once again put Next Number rule in play for DRYS at $23 a share. If it cant hold that price, we will close our position.--Jon

From sec.gov, "Margin" is borrowing money from your broker to buy a stock and using your investment as collateral. Investors generally use margin to increase their purchasing power so that they can own more stock without fully paying for it. But margin exposes investors to the potential for higher losses.”

Margin issues are not limited to regular guys like you and me. Wasn’t too long ago the CEO of MCI had to sale something like 50 million dollars of stock because of a margin call.

Take a look at this chart of the current margin status for the US market and notice the date of the prior peak;

Now scroll back down and review the 1946 comparison charts to our current market on a previous blog. Even though we are green light, all in trading right now, it is smart when trading stocks to always be looking to make a case for the opposite side of the trade.

This helps remove the emotion from our trading and keep us from being too negative or too positive, either of which can cost big money if were wrong.—Jon

Today’s market action played according to script. It’s very good to get after a big up day, small downside movement. Look for the markets to mark time tomorrow and over the next week as they attempt to clear the 50 day sma hurdle.

The big money is playing hard to get, which works for me just fine. However, this market can be pushed up or down just as easy, so we are ready to play either way.

Looking at today’s movement, all things Petroleum did well today. This is a sector we may want to be over exposed to soon, depending on Hurricane season. Last years no hurricane performance is unlikely to repeat. Big money will front run the season and start placing their bets in these stocks now, before the winds blow.

We are trading under TSI Green, so let’s plan on carrying over existing trades into Monday. Several of our stocks are take over targets, DLTR, YHOO, CMG, and merger Monday would be the most likely day.

I would like to however use next number rule for shares of DRYS, putting our stop price in at $23.—Jon

If you take a look at our stocks today, you will find the high octane, high beta stocks that performed well yesterday, are under performing today along with the over all market. The other side of the table however, slower growth, old school, lower beta plays are advancing well.

I wanted to point this out because it is not an accident that our swing trades are selected in such a way so that we are not over exposed to one group or another.

Even though swing trading is short term, you still want to approach your purchases with balance in mind, just like you would do for a diversified portfolio.

If we got 5 trades on the table for example, and you can only buy two of them, I do not recommend you go with two technology related, or two oil stocks, etc.

Having a bias towards one group of stocks is a death sentence for traders.

We always need to be from the Church of What's Working Now.--Jon

We exited SIMO and ZUMZ shares via Next Number Rule. The MGM downgrade to a sell had no affect, which is always a great sign. Again I look for Bullish Hammers around moving averages on candlestick charts to find good positions for the target portfolio.

The news for YHOO today once again very positive. Looks like they are going after GOOG's YouTube business, but doing it legally. However, it seems like it takes 10 tons of dynamite to move this stock, very sluggish. I project at this point an exit around $34.

The market is taking a break around the 50 day sma, which was expected. Good news, you are not seeing anyone rush for the exits, and the big money has yet to commit. Its amazing how many of these guys got caught on the wrong side of this trade.--Jon

We added shares of BVSN on Feb 6th at $1.49, stock closed today at $4.51. Check this chart, WOW!

The reason I point this out as stated before this list will have some big winners on it. By big I am talking 1000% or more winners. BVSN already up 400% since we put it on the list.

I wouldn’t allocate more than 2% of a portfolio to this list, but putting some risky stocks in your bag can pay off big.—Jon

Next number rule in play again for shares of;

I recommend setting your stop limit sales tonight, that way tomorrow you don’t have to worry with it. The rest of the list is a hold for now.—Jon

I wanted to update you on EBHI, a stock I pointed out a few months ago. When you are building a portfolio, you can really pump up the return possibilities if you add in a stock that fits the following profile;

Time and Time again, this play book works. It has made Gurus out of many Wall Street Managers like Bob Olstein and Peter Lynch, Warren Buffett.

Shares of EBHI, fit the profile.—Jon

We continue to keep an eye on the 50 day, which will serve as resistance or support depending on what happens. (The beauty of chart reading, a predictor of yesterday. This is why we don’t use charts at the Trademechanic to make our stock entries. That’s always 50/50, flip a coin. That’s not good enough odds for me.)

Sorry, got off topic. Here are the numbers we are watching;

Dow 12,471
NASDAQ 2445
S&P 1424.

By the way, our trade decisions are not based on anything the Fed said today or anything somebody says on TV. Don’t concern yourself with all the talk, just trade the reality.

Will the averages hold their 50 day mvas and move higher, or will that be an area of resistance? This is the only question we need an answer to right now.

The reason why, we don’t care about. Taking the emotion out of this game is how we succeed.

Like I always say, the market is the boss, end of game. Doesn’t matter what Jon Anthony thinks should happen.—Jon

Next Number Rule in Play. We will sell the following at these levels:

SIMO—Sell if can not hold $26
ZUMZ—Sell if can not hold $40.32
DRYS—Sell if can not hold $22.35

The other holdings we will continue to hold.--Jon

The Fed of course is all that maters tomorrow. It’s not what he says that matters to us; it’s the reaction to what he says. Now the market tends to give several head fakes before the real trend emerges.

Looking at the NASDAQ, we only need 40 points to re-take the 50 day mva, where program short covering would certainly kick in. So, lets watch that area to see if the index can tag that 2440 level and hold.

We have some profits in our trades, so make sure you close those out quickly if the tape turns negative and the bears get the upper hand.—Jon

The SMH is hitting resistance in the 34.15/34.20 area (includes its 50 sma) -- session high 34.19. Resistance above is at 34.35/34.39 (five day range top/congest). However our Semi SIMO has upped guidance, which guarantee took the shorts by surprise.

As we have been saying all last week and continue to say, we think the first leg of a bottom is in, and you can look for continued upward bias. The best part of all so far has been the chatter I am hearing from traders who are in doubt about this up move, and in particular doubt a recovery in the Semis.

If the Fed delivers like I think he will, we will be good to go for the rest of week. We will plan on closing all in the money swing trades by Friday close.--Jon

Nice move pre-market, will let this one play out through the Fed to see if he can give us even more lift.—Jon

We are seeing some nice open interest for June 15th out of the many calls in shares of CMG, strike price $70.

Also had some good action in YHOO out of the money April 20th calls, strike of $32.50.

Bottom line, got some big money betting these stocks will move higher.—Jon

Last week the only sector that was up on the week was Food stocks, all categories. Food(Restaurant) was up 1.6% on the week.

Monday, we are seeing that trend continue, with CMG and BWLD from our focus list both moving higher by almost 5%. On Wall Street everyone knows the trend is your friend. Right now the trend in Restaurant stocks is up, up, up.

If you are day trading, I would get a basket of these stocks in front of me, and concentrate my funds in this area.—Jon

Markets are broadly higher and holding the gains thus far. As stated all last week, we believe a near term bottom is in, and we should see a retest of the 50 day mva around 12,450, probably this week.

Volume is on the low side, but that will pick up towards the end of the week as traders feel more comfortable this up move can hold.

Don’t be concerned if some of our current trades show near term weakness, that is normal. When you have rebounds, the generals lead the way, stocks like Exxon, Cisco, Wal Mart, Apple, and then the money drops down to the second tier players. So we wont see all of our picks move up at the same time.

I am having some trouble with the voice update system, that is why I haven’t called in anything today. Have put in a trouble ticket to get that fixed.

In our target Price Target Trades Portfolio, Goodyear Tire’s price target was raised today, moving the stock over 5%. CMG is moving up nice today, almost pulling us even. We are looking for that stock to be able to get back to $65 with little problem.—Jon

A well respected market technician brought this to my attention and I wanted to bring it to you for consideration.

Everyone has always been told history repeats, well the stock market is the biggest guilty party of repeating history. This is why we use charts, because certain patterns produce predictive results over and over again.

In this case I need to take you all the way back to 1946.

Here is some data from 1946;
What Things Cost in 1946:
Car: $1,400
Gasoline: 21 cents/gal
House: $12,500
Bread: 10 cents/loaf
Milk: 70 cents/gal
Postage Stamp: 3 cents
Stock Market: 177
Average Annual Salary: $3,150
Minimum Wage: 40 cents per hour

In 1946 Mr. Daryl F. Zanuck, head of 20th Century Fox (movies) was quoted saying: "Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night."

I know, get to the stock market stuff Jon!! Ok lets compare the Dow, 1946 to the Current Dow today to see if we can get a look into the future.

If you believe history repeats, which we know it does,

we can guess that our current market has a shot at making a new high, probably starting this week or next,

before the uptrend is exhausted.-Jon Member Sign Up

If you follow our Under $10 momentum portfolio, you will find shares of BVSN on there. We added the shares on Feb 9th at $1.49, and they have now risen to $2.75.

This company has fallen so far from its glory days in the 90s, when I was trading shares past $80, it is sad. However, just like GOOG today, everyone thought BVSN would set the world on fire.

I dug up what some analyst had to say about BVSN on March 26th, 1999. “SmartMoney pick BroadVision rose after Legg Mason raised its earnings estimate for this year by three cents to 62 cents a share. The firm's forecast is much higher than the consensus estimate of 43 cents a share. "We've been talking to all kinds of companies and more and more people are talking about BroadVision's products," said analyst Pawan Malhotra at Legg Mason. "Demand for BroadVision products is accelerating." He also raised his price target by $15 to $70. However, Kaufman Brothers lowered its rating to Hold from Buy based on valuation. BroadVision shares have jumped 87% already this year. “ Some “SmartMoney”, by, by to your money is all they did for you.

The point I want to make is stocks are not really worth anything, only what the next person is willing to pay for the shares at any given time.

I love a good story as much as the next guy, but I have seen too many “great stories” end up on the pink sheets or out of business all together. You would be wise to steer clear of the hype, sticking with your trading system and rules.—Jon Member Sign Up

DRYS continues to power higher this afternoon after our purchase this morning at $21.35 a share. OMI Corp, another tanker company, has said it will look to possibly sale the company. This is adding fuel to the fire for this tanker sector, a sector that only the Trademechanic has gotten you in just before the take over rumors start to fly.

Once again, our current Swing Trade Portfolio theme is based on Take Over candidates, Technical Set Ups, and Defensive Plays. These are the type of plays that will hold up best in a down market, and offer the biggest opportunity for upside.

It is my job, Jon Anthony, to properly guide us through the tough times and make everyone a profit.

The free trial is ending soon and the 1st and best investment decision one must make is; where will my money advice come from that offers the best possible return, with the least possible risk.

Stay or go, we do with you the very best.—Jon Member Sign Up

Looking at some Institutional Ownership for CMG Chipotle and I see a famous Billionaire that has made his living trading markets around the world, George Soros.

Bio, “George Soros is a Hungarian born billionaire investor, philanthropist and author. The American businessman was once known as "The Man Who Broke the Bank of England" after speculating on the Pound Sterling, believing it was overvalued. Soros earned himself 1.1billion US dollars from the deal in 1992. George Soros is also a generous philanthropist, giving away millions of dollars every year to the poor and disadvantaged of the world. He also has numerous critics in both finance and politics. George Soros was born in Budapest, Hungary on August 12, 1930. In 1947 Soros fled the Soviet Union Communist occupation of Hungary and arrived in England. He then went on to study at the London School of Economics and graduated in 1952. Soros then emigrated and settled in in the United States of America in 1956. Upon moving to America, Soros set up an investment fund that went on to create his massive fortune. It was his intention to simply support his love of writing from his Wall Street earnings, but his well timed investment decisions saw his wealth increase dramatically each year. The Quantum Fund, went on to become one of the most successful managed investment funds ever, with a more than 30% increase annually over a 30 year period. Soros also gained many critics along his path to financial success. Through his International currency speculating he was once given the nickname of "the man who broke the bank of England" from a deal that earned him more than one billion US dollars. He has also been accused of negatively affecting the Malaysian ringgit during the Asian financial crisis through his aggressive currency speculation.”

Everyone likes to rub elbows with the big dogs. Trading shares of CMG, puts you in some successful company.—Jon Member Sign Up

Currently we are long in the areas of Food(Restaurant), Internet(media/search), Transportation(mining and minerals), Retail(Discount).

I wanted to point out that even though these trades are swing trades, we purposely divide them out between many sectors so we don’t have too much exposure to one sector if it goes bad.

The only differences between Swing Trading and Portfolio investment is time horizon, and the amount of gains we are looking to achieve per trade. The idea with Swing Trading is to pump up our yearly returns by booking smaller gains per trade, but booking many more trades, thus greatly increasing the returns.

Diversity and fundamentals are the first place to start in selecting swing trades, the same when selecting portfolio picks.—Jon Member Sign Up

Need to call your attention to the Casino Area. A bunch of A+ rated stocks in this sector have made 7-15% corrections or more and are testing their 50 day mva. We are seeing a bullish hammer in many of the shares.

Don’t forget to check out the Target Trades Portfolio in the members area for specific stocks in this group we are trying to get long and their price targets.—Jon Member Sign Up

First don’t forget, this blog section will move under the members area by April 10th and only be available to members.

The market continued to put in a sound base this morning, while attempted to scare the weak hands. This week has seen a total of around 400 points on the downside, yet here we are close to where we started.

All week long the Trademechanic has been keeping everyone positive on the market and calling the bottom. Going into next week, we got Mr. Bernanke on the tap and that will be the only thing that matters.

I am going to say right now, everyone who is short, hoping for a bone from the big guy is going to be in a world of pain.

The odds favor either good news, or great news from Mr. Fed, which I am hoping will put us in a position to unload our Current Swing Trades and start to get some QID in house for insurance.

Please don’t forget our new Price Target Portfolio located in the members area. We will trade these stocks with 3 target price levels, 15%, 25%, 40% return.

In case you were not aware, this is the exact matrix Wall Street uses for their upgrade targets and program trading. (There I let the cat out of the bag and didn’t charge you for it—HooYA! That’s my new word-KIDDING.)

Hope you are doing and well and hope you will continue to trade with us. We truly will help you avoid the many mistakes and land mines that will quickly take your hard earned money.—JonMember Sign Up

We have seen weeks of churning and consolidation and better plan on more of the same all the way through the summer months. Having said that, each day that we flush out the weak hands, gets us one step closer to squaring our current positions with a profit, and able to put on some short side protection.

Once the path of least resistance changes to up, the big money will step in and run the shares higher fast.

I am watching for DOW 12,400-12,500 as an area where we can take a position in the QID.

We are still able to add 1 more pick on the long side, because we were able to close FORM last week with a $200 profit.

I know the wins are a little tougher to come by right now, your patience will be rewarded. Patience is the one thing, the stock market always rewards.—Jon

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Well the big 500 down surprise day over 2 weeks ago continues to haunt us at this point. Because it came in an unusual way, everything ok today, 500 down next day with no catalyst, it caused us to be longer on inventory than we would normally be.

Our stocks are holding up very, very well and today’s sell off is again the phenomenon of selling leads to more selling, in spite of any news or reason.

Hang in there, sleep well, this will play out given us a chance to square up soon and move on.—Jon

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The stock market game is not easy. It helps to have somebody who has been around the block a few times, looking out for you. Its no different than anything else you do in life, like work on a car, getting a new job, it helps to have experience in your corner.

This game is so full of sharks, and land mines, it is almost impossible for the average guy to make money.

Do me a favor and pull up a chart of NEW New Century while you are reading this. Now, click on analyst upgrades and downgrades.

On Feb 13th Stifel Nicolaus Upgrades NEW: Stock drops big. On Feb 23rd UBS Upgrades the stock: Stock drops big. Finally March 1st Bear Stearns Gets into the action and Upgrades the stock, now NEW is worthless.

My question, are these “pros” this stupid or are they trying to salvage something for their institutional clients at our expense? The sad thing is, this happens time and time again on Wall Street.

Everyone has to get their stock information from somewhere. I use several paid scanning services to get my list down to the few 100 stocks. Then I use my patent pending trading formula, developed over a decade of trading, to present the final focus list to you for review.

Our business is to help you be successful and we spend almost 24hrs a day, 7 days a week to accomplish that. It takes that type of commitment to make it in this game.

We do appreciate you trading with us, and if you stay or go, I do only wish you the very best.—Jon

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Looks like the Oil Refiners have taken out their 5 day high and continue to power higher. Got to love the action given oil moved lower last week, and started lower this week.

Our refiner WNR is putting in another great up day. The fundamentals here as mentioned on the focus list are not good at all, so don’t over stay your welcome.—Jon

The battle for our living room continues and AT&T seems to be the smartest player on the block. There is no question the Internet and Television are heading for the wedding chapel some day, especially with the demise of analog by 2009.

The internet keeps grabbing more and more of the advertising dollar and it wont be long before its common to use the internet on your TV to order a pizza. However, in order to deliver these bundled services, you need content and a network capable of doing it.

AT&T, Comcast, Dish, DTV already have half the equation, but it would take decades to build the content half from scratch.

Bottom line, to complete the vision, I don’t see anyway around buying the content and there is only 1 candidate that will get you there fastest, YAHOO.

This section will move to the member’s area soon, don’t forget to register at Member Sign Up

—Jon

I will blog on this a few times just so everyone knows what this list is. The Price Target Trades area will be stocks that I feel offer a favorable risk/reward to the mid term investor who prefers to take down shares, and hold until a defined price target is achieved or stopped out at a specific stop loss level.

We will stalk these shares looking for a good entry point, which will be on a pull back, same as our swing trades. I will continue to add the stocks in as “wish list” with target buy price. Then once we are hit, I will put the price target on them we are looking for, which will usually be 7-15% profit from buy price.

I would like to turn these trades as fast as possible, so our money is not sitting idol for too long, but keep in mind, we might hold one for 2 months or longer if need be.

The amount of picks on this list will not be limited, so it will be important to purchase only shares of companies you feel the most comfortable owning in any given time frame, considering the market back drop.

Once we have the forum going, we can also discuss the pros and cons of each one, and any other stock you might want to look at.

Second, we should have the voice updates starting tonight or tomorrow. This will be a picture of a trader that you click on, and he talks with my voice about what ever topic we are interested in.

This is a fun tool for members and it allows me to call in updates if I am not at a trading desk close to a computer.

All of this will under the members area, including this blog, so please sign up in order to have access. Member Sign Up

In case you have not registered, CNBC is holding a Million Dollar Challenge for some lucky winner to win 1 Million Dollars.

Doesn’t cost you anything to play and we sure would love to see a Trademechanic member WIN! Don’t forget to play.—Jon

“Under the terms of the deal, which includes roughly $30 million of debt assumption, Dollar General's shareholders will receive $22 in cash for each share of Dollar General common stock they hold, a premium of 31% over its $16.78 closing share price on March 9.”

This news is giving a nice lift to DLTR from our focus list, TMTI ranking 7. My take this weekend on this sector was very positive, but that the sector is fully valued.

However, with a 31% buyout of DG, I may have under shot a little. I originally put the value of DLTR at $43. I think we have to consider that low now, and put the value closer to $47-50 a share.—Jon

The focus list is complete with TMTI rankings and commentary. Starting this week the list however will not be sent via email or any trade alerts. All information is posted in the members’ area that is close to completion.

All alerts and updates, blogs, will be posted there, and you will be alerted to the changes via email, but will have to log in to see them. At this time, I am not sure if a general temporary password has been set up for everyone or not, but if you don’t get an email from us, drop me a line at jon@trademechanic.com with your preferred username and password, and I will pass it on for you.

This week begins some earnings repots from some big Financial Firms plus we will see data released on retail sales, industrial production, consumer sentiment, regional manufacturing data, business inventories, import and export prices, and few other numbers.

Remember the market is under a negative bias, so it wont take much to push us back down to DOW 12,000 or down to the 200 day mva of 11,800. Don’t kid yourself in to thinking we are going to making new highs, the probability of that is about a 5% chance.

The only 2 scenarios we are looking for at this time are do we go up and hit 12,500, the 50 day mva, before continuing lower, or do we go on down to the 200 day mva, and get a bounce. –Jon

The street is using this contract re-work with AT&T as a tool to try and scare out weak hands in order to get the shares at a discount.

This news is a non-event, just normal business negotiation and not in any way responsible for today's decline.

This stock needs to find a bottom, before it can move higher and this is just a step in that process.

There are a lot of big money players that want in and its their job to get the shares at the best possible price.--Jon

“March 6th -- Bank of America (BAC) this morning launched a $20 billion program to fight global warming over the next decade by financing companies creating low-emissions technology, lending money for green building projects and creating the ability for customers to trade carbon credits.

The bank will spend $18 billion on commercial green lending and finance while another $2 billion will be spent on consumer programs and efforts to reduce the greenhouse gas emissions and environmental impact of its own operations.”

So what kind of companies are Bank of America looking at? According to Mr. James Mahoney, BOFA Director of Public Policy, “I think technology companies with innovative products, utilities that are investing in green technology and green energy sources will benefit. I think for that matter, so will coal companies that are looking to introduce new ways to reduce greenhouse gas emissions in the years ahead.”

The “Going Green” trade continues and looks like it has staying power. We will keep this in mind as we prepare our shopping list every week.—Jon

FORM is moving nicely on low volume, which is what we are looking for. Most new investors look at volume backwards of the way they should view it.

Volume is a maker of tops and bottoms. So in the short run, which is the time frame we generally deal in, a stock that is up on heavy volume, would be an indicator of a top.

Our original price target area in FORM was $44.80 to $45.00. If we can cross $45 on less than average volume, this says the shorts have not covered, and the stock can move higher. If the stock can get over $46 by Friday, I see a nice short cover, as they will not risk being long into the weekend.

However, if volume is running above average today, we will most likely close the position by the close. So far, that doesn’t look like the case.

We want to close this trade by end of day Friday, either way, if possible.--Jon

I posted on this last week, but I want to keep putting it out there so everyone is looking for the same thing. At Trademechanic, we are in this together, thus we manage a portfolio together. We are not going to give you 7 stocks you need to know every single day, that are only going to move lower and take money from you by the trading gods.

That’s why no focus list this week, that’s why we have not sent any trade alerts. We are short term Swing Traders, but with a long term portfolio building view. To successful, there are times in the market to be 110% invested, and other times you have to pick your spots.

This is what bottoms look like:

Until you see this, the bottom is not in. However, if markets stabilize, then you can trade to the long side, but we don’t want to take on more inventory until we can lighten up on what we have, unless the situation is so compelling we have to act.

We will have a focus list for next week as it seems for now, the big selling is done. Once earnings kick in, that will be the next catalyst to move us lower.--Jon

In all my years watching the stock market, I have not seen the market timing indicators flip flop as quickly as I am seeing right now.

The next day after the indicators showed the market as over bought, we dropped over 500 points. Now, to the day the indicators show over sold, we rally up.

If you haven’t been in this game a while, you might look at that and say, what’s the problem, the timing indicators are working perfectly. That is exactly what’s scares me, it all seems to perfect.

I am looking for a set up that we might be able to make a fast dollar on before the close Friday. That is with the understanding that at least one of our long positions we currently have will be closed with a profit.—Jon

As stated previous, you really have to pick stocks here because all sectors are getting beat down. Today our picks are performing very well and unlike the broader markets that are down big, we are not.

A confirmed rally is 3 up days in a row. As of right now, we don’t know if today is a dead cat bounce, or the snap back we have been looking for. This is what needs to happen.

If we get this, stocks are ok to hold into weekend.

If we don’t get exactly what I just described, we will book profits if given the chance before Friday.--Jon

According to Jeremy Siegel at the Wharton School of Business University of Pennsylvania, over the last 100 years stock markets decline:

We have to go back to 2001 9/11 before we find the last one, so we were over due. It’s important when trading to know your history, so you can make informed trade decisions.—Jon

Out of a 10,000 stock universe, only 40 stock candidates are coming back as tradable. This furthers the case I was making against jumping in to historically safe stock purchases.

I am still looking to add one more trade hopefully before we get a rebound, but for this coming week, we will not have a focus list.—Jon

Lately I have watched a famous Wall Street TV personality tell his viewers that the first thing they need to do to protect them in a market like this is buy stocks that you find at the grocery store. Companies that make Ketchup and Cigarettes, companies that also pay a nice dividend.

On another show; I see the pros telling us we need to be long Gold and Oil. Again, flight to quality with good dividends. Now, all these guys are well meaning, but to be a trademechanic, requires us to look under the hood at the nuts and bolts to find some real answers.

First, no sectors were up this week. The worst sector this week, GOLD, down 9%. Right behind GOLD, you guessed it, FOOD(Supermarkets), down 6%. So clearly, so far, this flight to safety has resulted in no less than a 6-10% loss of investors’ money in 1 week. None of the companies mentioned on these stock shows will pay you enough in a dividend to get that back.

The second problem with this strategy, is when the snap back happens, it for sure will not be these companies that lead the way. In fact, I would be willing to bet these TV pros, that these stocks will lag favorite names such as GOOG, AAPL, CSCO, etc.

Bottom line, it is going to come down to good stock picking, not sector ideas, or things that worked in 1987, that will get you through this blood bath. We have to evaluate each stock on its own, against the backdrop of the market with the question, are we close to a bottom yet, and is it safe to wade back in? This is the strategy we are currently following.—Jon

Sometimes the market can be like watching paint dry and today is for sure one of those days. The ASIA markets did not give us a push as I had wished they would. Traders seem content to watch this thing drag lower until we retest Dow 12,000.

Keep in mind, markets make about 4 bottoms before the finally bottom. This is just Level 1. You can expect 3 more of these, each getting worse as the Summer rolls on.

However, you have to put on a few trades before the snap back, otherwise you don’t get in. With a 5% decline, I am comfortable that we are somewhere near the first bottom.

This time is different than normal, as we didn’t get any warning shots first. Just up one day, then down 500 points the next, with no reason. Anticipating a decline was close, I tried to at least have us in stock I felt did not have much down side risk.

We have added 1 more with FORM to our trade list, and will step in next week adding in 1 more stock.

After that, we will wait for the Market to snap back so we can ring the register. At that time, we will add in the QID as a hedge against our long positions for the rest of the summer.--Jon

Looks like as of now, we are going to search for the first bottom again. I really feel DOW 12,000 will be defended, but of course I have no way to know for sure.

We may have put our toe in the water a few days early, but the stocks we are in technically look fantastic considering the downward pressure that has been applied.

Normally, you have to jump in a little early, because when they force the shorts to cover and run the stocks back up, it happens so fast you cant get in.

We waited for the market to pull back 5% before making entry, so that usually is a good spot for the first leg of a pull back.—Jon

I have talked about how we always are watching to see what type of market we are trading in. Are we trading the market that says; bad news is good news, and good news is fantastic news? Or, our we trading the market that says; great news is bad news, and bad news is the end of the world.

It is important that you are working from the right playbook, in order to quarterback the right plays.

Here is a headline from tonight,” Shares of satellite provider EchoStar Communications Corp. rose sharply on Thursday after the company's report of fourth-quarter earnings, which reflected stronger subscriber growth than many analysts had anticipated.”

In a tape like we have had this week, normally you could expect the market to sell these shares, no mater the news. But that didn’t happen.

One stock doesn’t tell the whole story, but I like the first chapter.—Jon

Just in case you did not get the Trade Alert, we will be going long shares of FORM at market if the NASDAQ can move to green by end of day.--Jon

There seems to have been a big hurry to get this market down to 12,000 to see if that will hold. Smart money will always run the sell stops until everyone is stopped out, before they will step in and put money to work. You have to reach a level of panic, to get the weak hands to flush out, so one can take the market higher for an easy 5-10% profit.

You will know the first bottom is in when we open down over 2%, and finish the day in the green. That’s is what we are watching for.--Jon