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Sterling Weekly for December 1st, 2003

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Over the years, working as a stockbroker or as a professional trader, I have developed what I termed "Rules for Trading." These are 11 guidelines for increasing the profitability of your trading and helping you avoid common mistakes. A complete list of my "Rules for Trading" is available at the following location: Over the course of the last couple of months I have been writing about each of the Rules in the Sterling Weekly to further explain the reasoning behind each of the Rules. In last Friday's edition of the Prime Stock Newsletter I listed the Rules (and the links to the relevant articles in the Sterling Weekly) instead of the regular trading recommendations. I discovered I had written about Rules 2-6, but had forgotten to write about Rule # 1. I am going to cover the 1st Rule for Trading "Never Let a Profit Turn into a Loss!" this week, and then get back on track with the 7th Rule for Trading next week.

The 1st Rule for Trading "Never Let a Profit Turn into a Loss!" is harder to adhere to that it may seems. The reasoning behind the Rule is that many people get emotionally attached to a stock and expect them to move higher than they actually do. Then when they start to move back lower, they hold onto them expecting them to return to their previous highs and continue to hold onto them as they turn into losing positions. The other Rules are extensions of, or build upon this Rule. The other vary obvious problem that the 1st Rule is designed to eliminate, is that if you do not limit and control the level of your loosing trades, ie unprofitable, then a great deal of your profits will simply go towards bringing you back to break even on your overall trading profitability. If you can successfully avoid letting your profitable trades turn into loosing positions then your overall profitability will increase.

Economic Calendar for the week of December 1st, 2003.
DATE Est. Time Release For Actual Consensus Prior Revised From
Dec. 01 ??? Auto Sales Nov.   5.4M 5.5M 5.1M  
Dec. 01 ??? Truck Sales Nov.   7.4M 7.5M 7.4M  
Dec. 01 10:00am ISM Index Nov.   59.5M 57.0M 57.0M  
Dec. 01 10:00am Construction Spend. Oct.   0.7% 0.5%


Dec. 03 8:30am Productivity - Rev. Q3   9.5% 8.3% 8.1%  
Dec. 03 10:00am ISM Services Nov   64.5


Dec. 04 8:30am Initial Claims 11/29   355K N/A 351K  
Dec 05 8:30am Nonfarm Payrolls Nov   110K 150K 126K  
Dec. 05 8:30am Unemployment Rate Nov.   6.0% 6.0% 6.0%  
Dec 05 8:30am Hourly Earnings Nov.   0.4% 0.3% 0.1%  
Dec. 05 8:30am Average Workweek Nov.   33.9 33.9 33.8  
Dec. 05 10:00am Factory Orders Oct.   2.2% 0.6% 0.5%  
Dec. 05 3:00pm Consumer Credit Oct.   $2.0B $5.0B $15.1B  

Prime Update:

Sterling Investment Services is an investment research and money management firm publishing the Prime Stock Newsletter. The Prime Stock Newsletter is a daily comprehensive newsletter that is useful for investors and traders alike. Whether you are looking for short term trading opportunities ranging from day trading to a couple of weeks or if you looking to acquire a long term portfolio at smart entry points. Subscriptions a $30/month. a 3 DAY TRAIL SUBSCRIPTION IS ONLY $4.95 (more).

NEW FEATURE: In the late 90's and into early 2000 I published the Professional Trader's Newsletter, which featured four (4) trading recommendations daily, as well as my nightly review of all the various sector indices. It was from these four (4) recommendations I selected the one I liked the best, as the expanded recommendation for the Prime Stock Newsletter. I have decided to combine the two newsletter formats and add three additional trading recommendations to the Prime Stock Newsletter. The new Prime Stock Newsletter will continue to have a primary recommendation with expanded information and analysis, three additional trading recommendations (the new feature), and my list of stocks with patterns indicating they are moving either higher or lower.

Highlights from Recent editions of the Prime Stock Newsletter
Recommendation Date Entry Point Recent Close or Exit Price Profit* Note
Pacific Healthcare 'PHS' Nov 26 $61.70/share $65.11 close on 11-28 $3.41 Should continue to move higher.
Dick's Sporting 'DKS' Nov 25 $50.20/share $52.58 close on 11-28 $2.38 Should continue to move higher.
Gilead Sciences 'GILD'

Nov 24

$57.00 $59.39, exit on 11-24 $2.39  
* The per share PROFIT is a theoretical calculation based upon the opening price the day the recommendation is published and the intra day high (or low for short sales) on the exit day. The exit day is determined based upon the application of our "Rules for Trading", the implementation of "stops" within our stated policy, and may not reflect the complete or full movement of the underlying recommendation.

The Dow Jones Industrial Average:

Today's Opinion: Closed @ 9,782.46 Last Signal: Called Higher with the close on Nov. 24th of 9,747.79 Current Expectations: I am expecting the Dow Jones Industrial Average to move higher and test 9,858.46 and then 10,043.50

The S&P 500:

Today's Opinion: Closed @ 1,058.20 Last Signal: Called higher with the close on Nov. 24th of 1,052.08 Current Expections: I am expecting the S&P 500 to move higher and test 1,059.02 and then 1,071.23

The NASDAQ 100 (NDX)

Current Opinion: Closed @ 1,424.25 Last Signal: Called higher with the close on Nov. 24th of 1,419.31 Current Expectations: I am expecting the NASDAQ 100 to move higher and test 1,443.13 and then 1,482.81 Longer term I am expecting the NASDAQ 100 to test 1,555.11 and then 1,846.96.

CBOE Ten Year Treasury Index (TNX)

Current Opinion: Closed @ 43.20 Last Signal: Called Higher with the close on Nov. 24th of 4.27 Current Expectations: The TNX should move higher and test 44.12 and then 44.55 on a closing basis.

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Disclaimer: The Sterling Investments series of newsletters is produced by Sterling Investment Services, Inc. All information used in the production has been obtained from sources believed to be reliable and accurate. Sterling Investment Services does not warrant or assume any liability for inaccuracy of the information used to produce our publications. To receive further information on these services please visit our web page at: If you would like to contact us our fax # is (404)-816-8830 Email address is: Sterling Investment Services may hold positions in the securities recommended or may be providing consulting services to the companies mentioned within this report.
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