Late Day Selloff All But Ends The Possibility Of A Santa Claus Rally

The late selloff helped stocks close near the low of the days with volume coming in lower across the board and well below the 50 day volume average. The blame on this late day selloff was placed on the yield curve as it inverted again today. The inversion was followed by the broad selling which you can't blame market players for doing. The best economic predictor of a recession is an inverted yield curve. However, folks need to remember that not all inversions lead to a recession. 1994 is the most recent example I can think of and I was not even trading then. LOL.

Besides that late day excitement there was a whole lot of nothing going on. There wasn't even a santa claus rally or window dressing to talk about. With that in mind, I might as well take a long weekend vacation. Therefore there will be no commentary this weekend as it is pointless analyzing the trading of the last day of the year.

Happy New Year everyone. I hope 2005 was as good to you as it was to me and here is wishing you a great 2006. Have a great weekend.

Aloha from the most beautiful place on Earth and, once again, HAPPY NEW YEAR!!!!!!

New Swing Longs: ALKS NAK

Longs Outperforming Market: MFLX-138% CERS-121% SUPX-68% MNG-65% TSCM-53% GOL-52% AUY-47% TFR-40% LCRD-37% NXG-27% SPWR-26% DIET KNXA ERS VSEC MDCC FFIV IDSY ONT MNST DDD

New Swing Shorts: NTRI BMHC ELOS

Shorts Outperforming Market: PBCT

Stocks On Radar Screen: IRBT VIMC

Stocks Hold Firm After Yesterday's Sell-off

The markets were up anywhere from .6% to .1% with volume higher on the Nasdaq and lower on the NYSE (However, I notice that IBD says volume was lower on both exchanges). The breadth was almost 2 to 1 positive so it was a decent day overall coming from yesterday's selloff. The strength in Gold and Metal stocks was very nice and those charts continue to look fantasticly bullish for the intermediate term.

The markets are still in a short-term downtrend but looks more and more to just be consolidating, from the previous uptrend, on a sub-intermediate time frame. The upcoming window dressing should start soon and that should be bullish for stocks. I would like to see the market selloff going into January to help build up the bearishness for a real attack on new highs in the new year.

There was not a lot of action today on the indexes and I doubt there will be too much more before the new year begins. However, the upcoming days should be intersting, none the less. But aren't all days in the stock market interesting?

New Swing Longs: DROOY CPST ENER

Longs Outperforming Market: GMXR-185% ESLR-56% REGN-52% MNG-45% AUY-43% MCX-42% LCRD-36% GRS-34% AAI-34% BNT-29% RADN-27% VGZ-27% BEAV-25% ERS TWGP MNST VSEC SAY IDSY GBN KGC HGRD ATHR NEM IED NTO GAIA SPWR

New Swing Shorts: NONE

Shorts Outperforming Market: APOL

Why I Hate Shorting In Bullish Markets: LIN

Stocks On Radar Screen: ALY

Light Volume Holiday Sell-Off Has Bears Claiming Victory. I Beg To Differ, However.

The markets sold off today on volume that was lighter than Thursday's levels but higher than the Christmas Friday trading session. The drop looked and sounded nasty if you watch CNBC and chatrooms. But the indexes are still only in a short-term to sub-intermediate downtrend and there are still plenty of good charts out there. So I am not going to join the bear camp yet. I am cautious, of course, but still not bearish. I have had some stocks blow up but the winners well outpace those occasional blowups. Therefore, until more charts get nasty, I remain bullish and see short-term we are getting oversold on the McClellan index and on a lot of my short-term stochastics settings.

Maybe we do crash due to the inverted yield curve. Somehow, though, I doubt it with the strength of the current economy. This yield curve still looks nothing like the yield curve did in 2000, so I am not sure how we are going to "crash." Yet that is what most bears make this selloff sound like we are about to do. I like to think, maybe, the Santa Claus rally failed because everyone was looking for it. Therefore, maybe the January effect or the January selloff does not happen. Who knows and who cares. The only thing that matters is the market indexes and most of those have very healthy long-term and intermediate trends. The short-term is weak but that doesnt mean it can't right itself. Go back and look at any rally on any index. There are always dips like this. But this is the first in a while I can remember having so many hard-core bears on it.

We shall see what the charts do. If I keep having more CAMD, HHGP, and CTHRs I obivously will have to go bearish. If that happens, I am fine with that. To be honest this rally is long in the tooth, coming from the October 2002 bottom and would not surprise me if we did selloff some. I just don't see this crash or recession happening from the inverted yield curve. And trust me I keep talking about this because this was on TV and chatrooms all day long. Ad naseum.

New Swing Longs: ANX

Longs Outperforming Market: BOOM-348% GMXR-168% SILCF-70% GGR-64% AAPL-60% CBG-59% HITK-52% REGN-50% AUY-41% BSMD-40% AAI-33% IDSY DIET ONT NTO TWGP VSEC RADN VGZ DEZ HSKA

New Swing Shorts: EDE CFFN

Shorts Outperforming Market: WEBX CECO APOL

Stocks On Radar Screen: SEAB SEED SWW

Merry Christmas and Happy Chanukah

New Swing Longs: DIET AVN

Longs Outperforming Market: PETS-104% TSCM-64% GOL-52% MIDD-47% FWLT-31% CRDN-29% PAY-28% BEAV-25% KNXA IDSY PNRG MNST TWGP NSC ATU FFIV WBSN KEYS DHT ONT REGN IINT ASTSF BKHM

Stocks On Radar Screen (May convert one into a long): SCHK WRSP MSPD MTLG NPTH EVST

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Longs I Did Not Buy And Now Have HUGE Gains: STAA COBR

You can't get them all. But sometimes you miss STAA and COBR and get stuck with CTHR and HHGP. You just have to put a smile on your face and show up again the next day and review why you picked two losers and missed two winners.

Merry Christmas Everyone! I will be back full-time again on Tuesday.

Christmas Parties, Christmas Shopping, Doctor Visit, and Poker Tournaments. No Commentary Again. Sorry.

I had no clue I would be so busy today. My apologies.

New Swing Longs: ITRN IDSY ATU FFIV KNXA STAK ONT ASTSF

Longs Outperforming Market: GMXR-170% BCRX-120% RES-106% PETS-100% EMKR-92% ICON-86% LCC-79% ACR-69% NRPH-64% CVO-59% NWRE-57% CBG-56% TSCM-53% MIDD-46% ECLG-42% GOL-42% SMTS-42% LCRD-37% GRS-37% EAGL-34% LDSH-33% AUY-32% FWLT-29% TEVA-27% PAY IHS CIB JBL MDCC CTXS EDS PRTR SWN BEAV WBSN TWGP KEYS SAY LOGI ASTE NSC VSEC ORA WBMD IIJI MRB DEZ REGN ATHR GIGM BKHM LRCX KGC KLIC PPCO NEM GBN MEL TNOX TWLT DDD

New Swing Shorts: KBAY

Shorts Outperforming Market: BAP CNL

Disasters Of The Day: CTHR HHGP

Markets Drift Sideways Ahead Of Christmas

New Swing Longs: SWN WBMD BKHM ATHR CTXS IHS SEED

Longs Outperforming Market: BMD-288% GMXR-155% RES-102% MFLX-99% BBD-86% EMKR-82% GGR-68% IVX-65% NRPH-63% LMIA-53% GES-51% NWRE-50% TSCM-48% MIDD-46% PYX-42% SMTS-41% ECLG-40% GRS-34% LCRD-31% EAGL-31% FWLT-28%

New Swing Shorts: NONE

Shorts Outperforming Market: CNL RSH BAP

Stocks On Radar Screen: DMC STX FFIV DRH MICC ULTI TEN BSQR TWIN

Markets Consolidate It Lighter Volume; Pre-Holiday Trading Coming Up

Today, the waves on the North Shore of Hawaii were going off and I got a little too much sun. I am paddling out early in the morning so I will not have time to write commentary tonight. Double overhead for a couple of hours, twice a day, is a hell of a workout. Here are the sites I check every morning before I paddle out.

www.omaui.com
www.surfnewsnetwork.com
www.hawaiiweathertoday.com

New Swing Longs: IVAC GBN MCF

Longs Outperforming Market: PETS-95% EMKR-74% GGR-61% NRPH-57% PNRG NXTP ANST PRTR ASTE OMCL NOVL DDD DEZ DSGX ORA ICTG

New Swing Shorts: MLM LIN

Shorts Outperforming Market: NCX VRNT BAP RSH

Stocks On Radar Screen: IHS SMDI DPTR ONXX CECX AEY SHOE IGTE IDSY AERTA

Disaster Of The Day: SRLS -- My God did this hurt. I still had 80% of orignial position and woke up to quite a shock this morning as I sold the rest for a 39% loss. It happens. This is a war not a battle. There will always be setbacks on your way to financial victory.

Market Starts Pullback On Mixed Volume

The markets pulled back hard today but did so on a mixed bag of volume. The Nasdaq and SP600 were down 1.3% and the SP500 was down .6%. The volume was lower than Friday's quadruple witching level so that dampens the selling a bit. But since I don't really count the volume on quadruple witching days, I will compare it to Thursday trade. And if that is the case, Nasdaq volume was lower and NYSE was higher. The volume on the Nasdaq was also below the average of the past 50 days, while the NYSE was just a little above average. So not a very traumatic day, even though those bears got loud today. Good!

It was about time to start a "real" pullback and not just the sideways action. We needed a pullback to get the bears confident this is the start to the "crash." So if you have been bearish the past 10% plus move up on the Nasdaq and SP600, congratulations perma-bears. You finally got your big bad pullback. LOL. But if you have been following the trend and making money on the "right" side, you may NOW start worrying if you want to. NOW the bears have a reason to start selling the market. They probably will not be right for very long but the bulls can allow them to have their fun for a while.

Instead of getting involved in the bull and bear debate that I see going out of control everyday in the chatrooms, just follow the price and volume action of the indexes and leading stocks. Your heart and doctor will thank you.

Primary and Intermediate trends: Up

Sub-Intermediate: Latteral

Short-Term trend: Down


New Swing Longs: KEYS DHT AIX GIGM KLIC HGRD TMO CLG

Longs Outperforming Market: RES-101% LCC-71% GGR-50% NWRE-50% LMIA-46% TSCM-45% RTK-42% ECLG-37% BSMD-32% GRS-29% CRDN-25%

New Swing Shorts: RSH CNL

Shorts Outperforming Market: BAP VRNT APOL SYMC SYD NCX WEBX

Stocks On Radar Screen: LEND AZN IHS KNOL ZL MDT TLF CAMT OTE

Disaster Of The Day: FCN. Not really that much of a disaster. Still made 1%.

Quadruple Witching Friday

A busy and eventful week comes to a close, finally. The major indexes scored minor losses today but volume picked up across the board, including a HUGE swell in volume on the Nasdaq. The Indexes were all down, with the SP500 down .3, Nasdaq .4, DOW .1, and SP600 .6. Those mild losses with higher volume gives the market a distribution day. But I never really care to count these days on quadruple or triple witching. The volume usually has NOTHING to do with the day's price action. Since it existed we can count it as a distribution day, but I am putting an asteric next to it.

What I would like to comment on is how many people believe this is the leg up before we "crash". Trust me, I see this mentioned a lot in chatrooms. The Nasdaq has rallied 12%, SP600 12%, and the SP500 9% since the October follow through. So I am not sure how a sideways market means we are about to crash, especially when only one index has seen one day of selling when it closes down more than 1%. Silly bears always so wrong in bull markets. Besides, even if we do have an occasional down day of 1.5% or more and big volume, it is normal in a bull market. It is how many of those happen in a couple or few weeks time. If you see more than one in two weeks then it is something to worry about. Until you see that, ignore the retard bears, and continue to operate on the long side for the best chance of scoring BIG gains.

Are we still extended? Hell yeah. Are there negative divergences in the New High list, breadth, bull/bear newsletter, put/call ratio, and oscillators. Hell yeah. But that happens in bull markets. Those indicators are all secondary to the actual action of the index and until it rolls over I can not be bearish. Even though the indicators are suggesting too many bulls and too much complacency now.

I operate in 4 time frames: long-term, intermediate, sub-int., and short-term. All trends in all time frames are up to lateral. None are in downtrends. That tells you where the momentum is and has been since October.

As I said in the opening, a busy and eventful week has come to a close. Have a great weekend and I will see you on Monday night or Tuesday morning.

Aloha, from the most beautiful place in the world!!

New Swing Longs: DDD

Longs Outperforming Market: GMXR-153% CERS-146% PETS-90% ACR-73% LCC-71% ESLR-70% EMKR-69% CVO-58% CBG-55% HITK-54% OXPS-49% GOL-41% TSCM-38% GGR-36% LDSH-33% AUY-31% FLWT-30% Q-28% GRS-27% AAI-27% LCRD-26%

New Swing Shorts (mental note: Dont over do it, keep it small): PBCT BAP APOL VRNT NCX

Shorts Outperforming Market: ATMI

Stocks On Radar Screen: SMSC BIO NATI FADV EFD MSTR SMXC EXPE PONR OFLX SCMR AVN CH DAKT MDM PRKR

Short-Term Weakness In Small Caps; Big Caps End Flat

The markets kind of had two different heads on it today. One in the Big Cap arena and one in Small Caps. The SP500 and Nasdaq finished down .1% with volume pretty much flat from the day before. However, weakness was obvious underneath as decliners beat advancers around 8-5. The negative breadth is something we should be keeping an eye on as the ratio of decliners and advancers was so negative while market did nothing that it is an eyebrow raiser.

The weakness in the NYSE and Nasdaq really showed up in the SP600. That index was down 1.1% while volume expanded. And looking at my small cap longs I can see that the charts are starting to lose that pretty green look to them.

Still the market is still in a nice uptrend since the rally started and we have barely had any distribution days. So, hopefully, that means this is only a short term pullback before another sustained move higher. The negative divergences I have on my Index charts (TSV, BOP, moneystream, etc.) makes me think it is just a short term negative pattern. No matter what it is just make sure you keep your sell rules very strict and disciplined.

I am still bullish long-term but feel somewhat cautious in the short-term. But, for now, all trends are up in all time frames for the DOW, SP500, and Nasdaq. So I will remain bullish, even though I really did not like the action in Small Caps and the SP600 today. I also had a couple of stocks blowup. So check that out. No one is perfect. That is impossible.

New Swing Longs: PRTR

Longs Outperforming Market: BMD-336% GMXR-151% CERS-139% VRTX-111% PETS-87% IVX-67% HHGP-63% CBG-51% TSCM-33% ELN-29% LDSH-28% TEVA-28% GGR-26% Q-26% AUY-25% BSMD TFSM SAY PNRG VSEC PAY ORA ARDI STXN TLWT IT GHM

New Swing Shorts: SYD ATMI ATVI CERN

Shorts Outperforming Market: ASR

Disaster of the Day: KOSP....Ouch!!! SMSC sucked too but that is only a .50% loss since entry.

Stocks On Radar Screen: UACL AVAN NATI TLF SMXC

Markets Mixed; Short-Term Weakness Seen In Small Caps And Technology

I have to hang up the Christmas light and ornaments all night and all day tomorrow. But hopefully in between that and putting up the Christmas tree I can find time to elaborate on the short-term weakness that I see in the markets.

Side Note: I still don't understand why we put up Christmas trees in Hawaii or much less California or Texas. In my personal opinion, you need either cold weather or snow. And last time I checked you can't have "real" snow without cold weather. Christmas just doesn't feel like Christmas on Hawaii. But I am sure it is the same in California too. But I do understand the importance of the Christmas tree and the manger scene. So, therefore, I do understand why we have it up. But I still think it is odd to have a Christmas tree in Hawaii. Whatever. It makes the girlfriend happy. That is all that matters.

New Swing Longs: PNRG HAWK TXCO NKE VSEC

Longs Outperforming Market: GMXR-149% MFLX-99% PETS-84% MCX-73% HHGP-60% NRPH-54% GES-51% OXPS-50% MIDD-44% SMTS-40% GOL-33% FWLT-30% AKAM-29% TSCM-27% TEVA-25% CLZR TLEO PAY NUHC ORA RTLX SRCL BEAV ROK LIFE EFII RADN ARDI STXN DEPO AXE CDI

New Swing Shorts: ASR CAE

Shorts Outperforming Market: NONE

Market React Well To FOMC Meeting; However, There Was Hidden Weakness

Markets started the day dull, rallied HUGE after the FOMC meeting, and then closed weaker to finish the day pretty much flat to up a little bit. Volume was higher across the board, to go along with higher prices. That was positive but breadth was negative on the Nasdaq. But on the NYSE breadth was positive. Of note, the Russell 2k closed down for the session. But it was barely down. So pretty much a normal volatile Fed day.

The Fed hiked rates to 4.25% but dropped the phrase "accomodative" from its speech. This word has meant, in the past, that more than two rate hikes were coming. With the removal of that word, the market was given a hint the hikes may be over soon. However, we still need more time to digest the Fed talk before we come to any solid conclusions of the most recent meeting.

My account fared rather poorly today. But most stocks remained in healthy technical patterns. So that is very reasurring. However, CUTR should have taught many investors, today, why you have to buy stocks coming out of fresh bases. After readers asked some general stock questions, I gave stocks like CUTR and CMTL positive comments about their companies but warned of new buys in the stocks as both were extended. This is the reason you need to buy from first stage bases and second stage bases only.

Good luck tomorrow!

New Swing Longs: NONE

Longs Outperforming Market: DCEL-222% GMXR-135% RES-102% RTSX-97% SIRF-91% MCX-73% LMIA-64% AAPL-62% HHGP-57% HITK-57% RTK-51% BNT-46% ARS-43% MIDD-41% TFR-37% LCRD-36% ECLG-33% FWLT-30% GRS-26% Q-25% ASTE AMED LIFE CHE FCN ERS BEAV NEM STJ ORA SNTO BGC PPCO IT EFJI NOVL AUY GAIA CLRK

New Swing Shorts: NONE

Shorts Outperforming Market: CECO WEBX

Bulls Are Obviously Still In Control; Bears Can't Do Much At All

A morning gap, followed by a low volume drop gave way to another rally that helped the indexes close pretty much flat to positive on the day. The Nasdaq was up .2%, Nas 100 .3%, SP500 .1%, 600 .2%, and the NYSE .4%. Breadth ended the day positive and there was a good amount of more sectors positive than negative. Volume was also lower across the board; a good sign on a pullback or a flat day.

The FOMC meets for the last time in 2005, tomorrow. Alan and company are expected to raise rates for the 13th time in a row. The action will be listless I am sure, until 2:15pm EST. So expect another quiet day for most of the day followed by the usual FOMC firework display afterwards.

Overall, a nice, quiet positive day. Just what you like to see after a big rally. We shall see what tomorrow brings. Good luck, everyone.

New Swing Longs: FSP EFJI TLWT CLRK HSKA

Longs Outperforming Market: BOOM-358% PRLS-245% CERS-130% GMXR-126% ICON(CAND)-106% RES-101% MFLX-100% RTSX-93% ANAD-90% ASGN-85% PETS-83% SYKE-74% ESLR-73% EMKR-73% SUPX-68% WIRE-66% THOR-62% MCX-62% MSCC-62% AAPL-61% LMIA-60% HHGP-55% BSMD-53% HITK-52% RTK-50% GES-50% CBG-46% SILCF-40% NWRE-39% SMTS-37% TFR-36% TRAD-34% LCRD-32% RNOW-32% FWLT-28% ZEUS-25% CMED ASTE ICTG RWC CHE STMP SMSC ELOS RVSN ERS CWTR BEAV MNST NEM ROK STJ DB ORA OXM CBEY IED TOMO STXN IINT AUY KOSP JBL GRS AU KGC DSGX

New Swing Shorts: NONE

Shorts Outperforming Market: CECO

Stocks On Radar Screen: KLIC MDP WEDX CAMT

The Books You Need To Become A Successful Trader

Before I list these books, I have to tell everyone that I have read many stock market books. Unfortunately, I have not read a new one since 2002. So there may be some current books that are great too, but these are the ones that definitely helped change my trading life.

I can't remember anymore, but I think when I was 18 I was in a major automobile accident and had a very serious injury happen to me. It ended my collegiate sports carreer but helped start a lucrative stock market carreer.

During the time spent in the hospital and at home (home hospital) during the year it took me to fully recover, I purchase over 100 books. Out of those 100 books, I still own all of them. Sadly, if someone could have told me about 90 of them were pure junk and couldn't help me out making money consistently, I would not have bought any of them and would have used the money to invest/trade. Therefore, I would buy just what I list here. I have a bookshelf of books I will never EVER read again, but along with those are these gems that are invaluable and have been read, by me, many times over.

The List:
"Reminiscenses of a Stock Operator" by Edwin Lefebvre --I read this once a year, religiously
"How To Make Money in Stocks" by William J. O'Neil
"How I Made $2 Million Dollars in the Stock Market" by Nicolas Darvis
"Market Wizards (the first one only)" by Jack Schwager
"One Up on Wall Street" by Peter Lynch
"Lessons from the Greatest Stock Traders of All-Time" by John Boik
"Trading To Win" by Ari Kiev
"The Disciplined Investor" by Mark Douglas
"The Stock Trader" by Tony Oz
"Trading For a Living" by Alexander Elder
"How To Trade in Stocks" by Jesse Livermore
"24 Essential Lessons for Investment Success" by William O'Neil
"The Successful Investor" by William O'Neil
"The Master Swing Trader" by Alan Farley
"The Battle for Investment Survival" by Gerald Loeb
"How To Make Money Selling Stocks Short" by William J O'Neil

After just re-looking at my bookshelf, it pisses me off I wasted so much money on the other books. I hope this list helps as it is the "best" of the best. Total book count is 167. LOL. What a waste of money.

If you want another great read that doesn't really help you but is brilliant, I recommend "IBD and the Making of Millionaires" by David Saito-Chung. This is a fantastic look behind the scenes of how IBD became what it is today. Did you know William O'Neil ran this paper for 20 yrs. WITHOUT making a profit. Last year was the first year IBD was in the black. God bless, William O'Neil. I may never be able to thank him personally, as I can't justify the cost for attending a seminar with him present. But, the best way I can think of thanking him is hopefully throwing some business his way.

These books WILL make you a better trader. It is impossilbe to read these books and not be a better trader.


New Swing Longs: SIRI SPWR

Longs Outperforming Market: ASF-165% CERS-119% GMXR-113% RES-96% SPNC-88% ACR-74% IVX-65% WIRE-63% AAPL-60% GES-48% MCX-46% HITK-45% MNG-45% RTK-44% MIDD-41% GGR-31% Q-26% TSCM-26% TEVA-25% ERS MXWL RADS CTHR BBBB BRL ORA ICTG MDCC CHE CLZR ROK ELOS BEAV CBEY GRS NOVL NSTK PGR KGC MDG ELN AMS

New Swing Shorts: NONE

Shorts Outperforming Market: ESL WEBX

Stocks On Radar Screen: FRGO VLG TRLG DIET PMTR OPLK KEP PMID BWEB

Why Holding Shorts Too Long Is Dangerous In Bull Markets: ARM

This Very Normal Pullback Continues

New Swing Longs: KOSP OMCL

Longs Outperforming Market: NDAQ-272% ASF-163% GMXR-109% VRTX-99% RES-94% RTSX-89% ASGN-84% GSX-81% PETS-71% SUPX-67% PWAV-64% IVX-63% BNT-59% HHGP-54% GES-47% HITK-40% MIDD-37% RTK-37% AKAM-36% GGR-31% CNET-29% GOL-29% LCRD-26% FWLT-26% RWC BEAV MDCC CKFR SMSC NNDS NEM KYPH TEVA CBEY ELN Q NXG NTO AU GRS FCN IINT SRA DSGX BSMD

Stocks On Radar Screen: GG RGLD EXP CYTC UEPS XNPT SIL LMNX CGA NADX MDM

New Swing Shorts:

Shorts Outperforming Market:

Markets Continue Pullback

Nothing new to add today. The markets continue the pullback they started yesterday. However, this pullback is not very scary at all and most stocks are acting properly on their pullbacks. The volume was lower or the same to yesterday's total, showing that institutions are not dumping shares at these levels.

I have been concentrating way too much on the stock market recently and am going to take a vacation from my commentary so that I can totally concentrate on my poker play. Because to be quite honest my poker play has turned into junk. I am not sure what is going on but the past month and a half have been terrible. I am running bad and it is starting to bother me. So I am going to concentrate solely on poker the next 5 days then start fresh on Monday. I doubt the market is going to do anything spectacular till then.

If you play poker, you can find me on ultimatebet, fulltilt, pokerchamps, pokerstars, and partypoker as JoshNControl, JoshuaNControl, and SirAloha. You are more than welcome to find me and take my chips. EVERYONE ELSE HAS, you might as well too. :)

New Swing Longs: BGO NTO APAC

Longs Outperforming Market: BOOM-328% BMD-299% CERS-112% GMXR-105% SPNC-91% GSX-78% EMKR-74% ACR-73% PETS-67% BNT-57% PWAV-55% LMIA-53% MNG-47% MCX-45% GES-44% MIDD-37% EAGL-37% TRAD-35% AKAM-35% GRS-29% TFR-28% TIII-27% MRB-26% LCRD-25% ELOS TEVA BEAV FWLT RWK ELN HOMS ACTG GGR BGC AU NSTK IINT NXG DEZ NEM KGC AUY TSCM RTLX DSGX

New Swing Shorts: ESL NTGR

Shorts Outperforming Market: POSS K

Late Day Reversal Raises Short-Term Red Flags

The markets gapped higher in the morning, trended higher all day, and then suddenly reversed on a broad pickup in volume near the end of the day. The markets all ended basically unchanged from down .1% to up .3%. Volume on the Nasdaq was up a little and NYSE volume was lower. But the volume picked up on the downside, as the markets fell late in the trading day.

It was an ugly close but we need the market to pullback if we want the uptrend to remain healthy. Pullbacks is what allows the bears to come out of hibernation and start with the "top" calls. And boy did they do that today. I heard the "top" called a lot today! That is good news, to me, as any further price erossion should convince bears the "crash" is soon to come.

Unfortunately, for them, there are a lot of nice charts still and some new fresh ones popping up in the Precious Metal sector. However, some charts have started to show some distribution. But, overall, most charts remain very green and in solid uptrends. Internet, Computer, Software, Medical, Banks, Insurance, Metals, and Transportation sectors are still the leaders and most of these stocks still look great.

Hopefully, you have been locking in some gains so any reversal that could happen doesn't eat away at all your hard earned profits.

New Swing Longs: NEM MDG AU NSTK TLEO CBEY

Longs Outperforming Market: BOOM-321% ASF-164% BBD-114% CERS-112% ANAD-94% ASGN-90% RES-87% SPNC-73% EMKR-72% SUPX-66% PETS-64% MSCC-63% AAPL-60% SILCF-50% BNT-50% OXPS-47% LMIA-45% GES-44% NWRE-40% MNG-39% MIDD-36% EAGL-36% AKAM-35% GOL-32% MCX-32% ECLG-29% HOMS BSMD TSCM ADBE MDCC BEAV ELOS WBSN SCUR TEVA STJ TSCO ORA RVSN CLZR OXM DB MNST ICTG RWC FWLT AUY LCRD ERS DEZ STEL DEPO KGC ARS SSTI FDRY JDSU UBS RSTI ACTG NOVL NXG IINT CDI DSGX

New Swing Shorts: CECO

Shorts Outperforming Market: SYMC KERX

Stocks On Radar Screen: CPST ASTSF KAL ASYS ANEN

Nice Orderly Pullback On Mixed Trade

Stock market indexes finally rested today, as the indexes sold off early then spent the rest of the day with an upward basing bias. The SP500 was down .2%, Nas. down .7%, SP600 down .5%, and the DOW down .4%. Bredth was 5-3 neg on NYSE and 3-2 neg on Nasdaq. The volume was higher on the SP500/NYSE and lower on the Nasdaq. The higher volume on the SP500 is not a distribution day either. The index closed in the upper half of its intraday range, indicating strong support and finished only down .2%. Overall, the markets enjoyed very healthy pullbacks today.

Pullbacks are what this market needs. It is not healthy to go straight up everyday. These pullbacks help work off the extreme short-term overbought conditions of the market. The profit taking today was healthy and all trends are up. If the selling continues tomorrow, take proper defensive action to lock in partial gains. I don't think anything is out there to stop this trend so stay strong and long till you get a signal to leave this party.

New Swing Longs: ELN RTLX

Longs Outperforming Market: BOOM-313% GMXR-107% BBD-105% ANAD-87% ASGN-86% RES-80% ACR-72% THOR-66% SILCF-48% BNT-44% LMIA-43% MIDD-35% TRAD-34% TFR-28% RTK-26% CTHR CRED SLW STJ CAMP TIII ICTG ELOS MNST CPSI SRCL RADN CKFR OXM CLZR TSCO ROK AKAM NXTP MDCC ASVI AATI ISE RAIL TSCM MRB ERS LCRD AUY ALY ZEUS ACTG PPCO STXN DSGX CDI

New Swing Shorts: AV

Shorts Outperforming Market: NONE

Stocks On Radar Screen: WBMD TS IRBT ASYS MRTN BTM EURO

A Nice Calm Way To Finish The Week

The stock market indexes closed mixed with none of the major averages closing up or down more than .5%. The one standout was the SOX and that was only up .7%. The very nice late day move for the Nasdaq was very strong and bullish, to go along with the positive action late in the Semiconductor index. Volume came in lower across the board also, indicating a nice calm follow through to big day on Thursday. That with breadth being slightly positive finished a nice week for stocks. Not the greatest follow through but a lot better than a reversal on heavy volume.

Nasdaq is at 4 year highs and the SOX is at 1 1/2 year highs. The strong momentum is hard to stop and is just plain smoking right now. The bullish finish to the week was very welcome after the two early distribution days we saw. However the second distribution day was a very weak one to call and obviously was wrong in the end.

All trends are up, except the DOW on a very short term basis which is sideways. A very bullish market and very strong economey.

New Swing Longs: MACR LPSN ISE CDI BSMD

Longs Outpeforming Market: NDAQ-298% PRLS-205% GMXR-99% BBD-97% RTSX-96% ANAD-84% RES-78% ACR-72% SPNC-69% SUPX-62% CVO-58% AAPL-57% CCI-57% OXPS-46% SRLS-44% BNT-41% NWRE-39% MIDD-35% TRAD-32% NSM-30% CNET-28% GOL-26% MUSE-26% LOGI RAIL GGR NOVL RVSN CNXT RDCM STXN PAY WBSN TIII TEVA TSCO VAS STMP SMSC CKFR ORA AH JBL ASPM MINI RWC ASVI CHE RTK SNPS PPCO AXE LCRD RSTI SSTI SRA MECA COHU UBS TESOF

New Swing Shorts: NONE

Shorts Outperfoming Market: APPX ARM

Stocks On Radar Screen: LNG MORN TS ORBT CPL IRBT PMTR AVAN TBIO TWIN

Markets Erase All Distribution Days On Powerful Moves To New Highs

The major market averages scored nice gains today on a broad rally. All indexes rallied 1% or more, on an increase in volume--SOX 4.2%, NAS100 1.9%, SP600 1.8%, SP400 1.6%, Nas 1.5%, SP500 1.2%. The increase in volume, along with a lot of indexes making new highs, erases all doubt that the market was in trouble with the previous minor distribution days the past three days. Breadth was 11-5 on Nasdaq and 10-3 on NYSE, telling the tale of broad strength.

What I found most impressive about todays rally to new year highs on the Nasdaq and Nasdaq 100 was that it started with a breakaway gap in the morning, stayed in a solid uptrend all day, closed near the highs of the day, and did it on an increase in volume. Very bullish. The SP 400, 600 and NYSE closed at all-time highs today, the Nasdaq and Nasdaq 100 closed at new yearly highs, and the SOX closed at 17 month highs. Also, very bullish.

All the breakouts, big gains, and everything rising all over the place can only mean momentum is completely on the bulls side. All but a handful of industry groups rose today, showing that the broad strength squeezed shorts everywhere. No sector was safe for the bears to raid. They (institutions) took them all up, squeezing "the haters and non believers."

Today was the best day I have personally ever had in terms of percent gain and percent of stocks up. If this is a start to another leg of the Oct 2002 bull market, it is going to be a good end to a very good year. I have never owned so many stocks in my life. I don't like it but my style has evolved to this. But if I was trading in 1985 when there was less volume on the market I would have it much easie.................oh wait a minute, I would not of had a computer then and the software would have cost a fortune.

We are so blessed things like IBD, TCNet, and the Internet is around and we get to live to see this technology come about. A very cool time to be alive my friends. And a very bullish time too. Twenty years ago I could not have made a blog or invested in stocks for my future; now I can. Amazingly SICK my friends!!!

New Swing Longs: ASTE FSL HOMS SSTI MXWL PPCO KOPN ROK SRA DSGX APLX MFW

Longs Outperforming Market: BMD-296% NDAQ-277% ASF-168% RBAK-98% GMXR-98% RTSX-95% MFLX-94% BBD-91% SIRF-85% ASGN-79% RES-77% ANAD-76% WIRE-71% EMKR-70% ACR-68% THOR-66% MSCC-63% SUPX-61% CVO-55% AAPL-53% OXPS-45% IIJI-44% SRLS-43% BNT-40% EAGL-37% CPTS-37% MIDD-34% PYX-32% AKAM-31% NUHC-30% VGZ-30% MCX-29% TRAD-28% NSM-28% LDSH-25% CNET-25% ZEUS TIII JDSU TSCM SMSC SCUR AMED ASVI MNST LIFE CMTL SIGI JBL GOL RVSN LCAV SAY SLW AH CKFR VAS KEX MINI ASPM PAYX VIGN BBBB ANST LOGI AUY MNG RTK GRS BGC ARXX AXE LEXR SBAC UBS LWSN CNXT ACTG ARS CAMD RNOW TNOX KPA MRGE CLZR HAIN LCRD MRB UIC TOMO

New Swing Shorts: NONE

Shorts Outperforming Market: APPX

Stocks On Radar Screen: TOD CNTF ZVXI CDI CPL

Due To Technical Difficulties, No Commentary

New Swing Longs: AATI TSCO BGC STXN HAIN GSL

Longs Outperforming Market: BOOM-243% ASF-160% CERS-94% RTSX-92% RES-72% ANAD-66% ACR-65% SYKE-61% CCI-54% THOR-52% SILCF-50% CVO-48% HHGP-47% CPTS-35% CRDN-33% RADN-28% HITK-28% FWLT BBBB VIGN MSCC MDCC LCAV NNDS LOGI CKFR RVSN GOL JDSU EFII TNOX GGR ZEUS MECA SBAC COHU MRGE CLZR KPA DEPO SSY ORA MCX

New Swing Shorts: AYE K FADV

Shorts Outperforming Market: SYMC

Market Pulls Back And Help Work-Off Overbought Conditions

The markets were a mixed bag of trading today, with the Nasdaq closing down while the SP600, 500, and 400 finished higher. Big tech stocks like GOOG helped weigh on the overall action of the market today. Volume did pick up across the board, giving the averages their second distribution day in as many days. However, if you look at volume during the advance from October, you will see that the volume on the upside was much heavier than the volume the past two days on the downside. Another positive is the fact that breadth on the Nasdaq and NYSE was positive by 3 to 2 and most stocks acted quite calm on their pullbacks. So overall not that bad of a day.

Today's trading had a fair amount of uncertainty to the action and appeared to be simple profit taking. I know that the past week I took some profits in a some big winners on either climax runs or new highs on low volume. And the stocks I am partialing out of will allow me to have more cash on hand for the new batch of breakouts that will come from the next rally to new highs.

We are still very overbought short term but long term the indexes look great (look at daily/weekly chart going back to 2002)! This uptrend looks fine and as you can see in the daily charts going back to 2002 in the indexes all trends are up in all time frames except the very short term. For the very short term the trend is down. But since 2002, the big bad old primary trend is up to sideways. Slow and steady wins the race.

New Swing Longs: ZEUS RDCM DEPO

Longs Outperforming Market: CNVR-48% CVO-43% CRDN-32% RADN GOL RVSN CMTL MRGE CTLM NNDS SKIL FDRY KPA CLZR ICTG

New Swing Shorts: KERX

Shorts Outperforming Market: APPX ARM POSS

Stocks On Radar Screen: CPL

Finally, The Pullback Has Started; Volume Came In Lower Than 50 Day Volume Average

There will be no market commentary tonight. The surf was big and fun on our North Shores today (almost double overhead). I surfed a good amount today and don't feel like writing tonight. If the waves are cranking tomorrow, I probably will not be writing commentary tomorrow night. I will be way too tired, like I am tonight.

New Swing Longs: MLR SKIL

Longs Outperforming Market: CERS-92% RBAK-89% RTSX-85% AAPL-46% SILCF-45% BNT-44% OXPS-42% NWRE-41% LMIA-41% GES-40% CPTS-32% VGZ-31% IIJI-25% TIII ISO HEII CAMP LOGI TWGP CNXT PAAS RVSN MEL PEIX

New Swing Shorts: APPX

Shorts Outperforming Market: WEBX SNS ARM POSS COG

Stocks On Radar Screen: APAC SIL NEM

Position Management

This subject is so...subjective that it sometimes is hard to fit all styles into one kind of methodology. So, since I am not a buy and hold guy or a daytrader, I will elaborate on how I hold my stocks. This is in know way the way you should trade. I recommend on holding more than a couple of stocks but to go the extent that I go in "bull" markets should not be done unless you really know what YOU are doing.

The best method I know for holding the right amount of stocks for your personal cash criteria can be found in "How To Make Money in Stocks" by William J. O Neil. You can also find many money management articles in the Investors Business Daily Learning Center found at investors.com.

For my personal style I dont like to hold any stock that makes up more than 5% of my account. That doesnt mean that it cant grow to more than 5% but no matter what I never buy more than that. The reason being is that I have found that whenever I think I have found a big winner, in the past, and have loaded up on them it has never done what I thought it would do. This is just bad luck on my part. I dont seem to be able to outperform the markets by hitting the right MSFT DELL EBAY CSCO BOOM FORD TASR TZOO for a short time frame huge return. So after a lot of trial and error, I have found by buying all the great stocks that breakout from great bases I am able to outperform as long as I have great sell rules to limit damages. Along with that, knowing how to average out of buys can keep me in some big winners like NDAQ BMD ASF this year alone. By averaging out of my winners and cutting my losses quickly it allows me to always have some cash on hand ready to buy the next potential big winner breaking out of a base.

The great thing about this method is how well it can alert you to swings in the market. When the market is in an uptrend and all the sudden I start getting a lot of different sell signals in the longs I have, I know the tides are changing. On the other hand, when we have been in a bear market and I have a lot of cash on hand and all of a sudden stocks start breaking out of great bases on high volume while the market gets choppy trying to find a bottom, I know that a bull market is starting.

The more stocks you hold the more money you need to have. You dont want to own 50 stocks and have only $5,000 in your account. You need $25k at least to hold 50 stocks. That would give you $500 in each stock. That may not sound like a lot but if you trade on a per share basis it is as cheap as can be.

Now, the next thing we need to bring up is those 50 stocks you hold. If you are buying at the wrong time all the time, this method will ruin you fast. But if you have a track record of hitting at least .333 in the stock market, this method will work if your winners are larger by your losers at a 3 to 1 ratio. That is why IBD always says (and newbies YOU ALWAYS SHOULD) cut your losses at 7%. I cant stress that enough. Why? Because normally when I get a stock right a 20% is average. I can get 3 wrong to every 1 right and come out on top. Just like baseball hitters. The good thing about the method and stocks I select has become the fact that I now swing over .600 in bull markets and over .400 in any other kind of market. This ratio, over time, allows me to well outperform any mutual fund over a 3, 5, and 10 year period.

To learn how I find stocks to then employ this kind of management, please read the post called "How I Scan For My Stocks."

There is much more than this that goes into the overall money/position management game. I just thought this would be a great overall place to start. I will reread what I have posted and in the future will add suplements to this post when I feel neccessary.

All questions and comments are welcome. Don't be shy!

Post-Holiday Trading Non-Existant

It is a waste of time trying to analyze a holiday market. Enjoy your Thanksgiving weekend, eat well, and stay safe.

I have written an article on how I scan stocks for purchase, below. There will be others this weekend about money management and selling.

New Swing Longs: NONE

Longs Outperforming Market: NDAQ-320% BBD-87% ANAD-69% AAPL-49% RY-40% AKAM-28% CWTR DEZ NXG PTC GG HEII TESOF CHE LOGI

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Stocks On Radar Screen: STAA CAU AERTA RITA COBR

How I Scan For My Stocks

When I am searching for stocks there are two primary scans I use, after hours. One is a list I have in my TCNet program called "IBD List Combined" and the other one is "Price/Volume."

The IBD List Combined is simply all the stocks the past week from "Your Weekly Review," "Where The Big Money Is Flowing-Daily/Weekly," "IBD 100," "Top Buys Of Mutual Funds Past Month," and "IBD Compostie Top 200." These stocks are all put on one list and scanned for new breakouts after the bell. These stocks are the best of the best and normally when they breakout if you follow the IBD sell rules work quite well. What this list also helps me to do is find potential breakouts that I then place on watchlist on my TWS in IB. These watchlist have alerts set .10 cents above the pivot point of the most recent base and when the stock price crosses that pivot point an alert goes off. That alert will then allow me to pullup current chart of the stock and see if this breaout is on heavy volume. If it does, then I buy intraday, if I am around.

The next scan called "Price/Volume" is a scan I created using criteria from the best stocks with big price runs that I have seen in my life.

The best way to describe this process is by reprinting my submission to TCNEt's Worden Brothers. The orignial can be found on TCNet. I recommend EVERYONE subscribe to this chart package. Just do some research on it and you will see why it is the best.

The Worden Report (Friday, June 3, 2005)

We Dub Thee Sir Aloha

Sir Aloha is another one of those who put their own marks on every concept that they find attractvie, which they then modify to fit their own objectives. This is a characteristic of ALL knights. Sir Aloha's approach is one that will help many develop approaches of their own. We welcome Sir Aloha to the "Roundtable of Knights Who Think for Themselves." The celecbratory bottle of Veuve Clicuot Ponsardin is being prepared for travel. - DW (Don Worden)

Dear Mr. Worden

As a user of TC2005 for at least six years I can honestly say that without your software my success today might not be what it has been. I would like to offer a submission on how to select stocks for purchase during bull markets or, if the investor is experienced, purchase of good stocks in strong sectors in bear markets.

Being an avid fan of historical charts and an avid chart reader, I have noticed the same patterns in charts over and over and over. Being that I have been investing/trading stocks for ten years now I have also seen my fair share of great stocks and their chart patterns. I scan/search around 500 stocks everyday that come up on my PCF (personal criteria formula) easy scans and find that they have a fantastic track record when coming out of a basing pattern.

I look for stocks that have simple characteristics using volume and moving averages. I find technical indicators are just clutter and can give too many false signals that could prevent a trader from earning full potential profits. Below I will list the criteria and the PCFs that I use to put into an easyscan to give the best stocks with the best chart patterns.

First, I want the stock to be up for the day (Price Percent Change today, 0.01 to Max), the stock to be trading above the 50 dma (C > AVGC50), the 50 dma to be above the 200 dma (AVGC50 > AVGC200).

Second, I want the volume to be at least 1.5x the 50 day volume average (V > 1.5 * AVGV50). On one scan I have stocks that have to avg. 100k shares a day for the past 50 days (AVG50 >= 1000). On a seperate one I have one that trades avg. 20k to 100k (more speculative, wider spreads) (AVGV50 >= 200 AND AVGV50 <= 1000).

Now that you have created the scans of the charts you want to look at we need to now look at how to setup your screen.

In the top window I have candlestick price on a log chart, 50 dma, 200 dma.

Second Window: Volume bars and a 50 day volume avg. line.

Bottom Window: BOP and Moneystream.

I love how on small cap stocks that come up on the scan that have proper accumulation/distribution characteristics BOP can be a strong green throughout the base in an uptrending market. ------- I think I should have re-written that to say: I love how green BOP in the base followed by green BOP after the breakout can lead to great price gains in small cap stocks. OH WELL.

The most important part is then knowing your chart patterns. Cup with handlses, saucers, W-bottoms, ascending bases, 50 day moving average bounces, and other historical patterns that the best stocks create.

When combining all these you can find great stocks that will give you better returns than most other stocks in the market. History shows strong stocks get stronger and weak stocks get weaker. Not all the time, but you get my point. -------- That should have said: Strong stocks get stronger in bull markets, weak stocks get weaker in bear markets.

Easy and not too complicated! I have been using this setup for over five years. This is an excellent scan in bull markets to find the best stocks, the leaders in the current or any uptrend environment.

Aloha from Maui,
Joshua

There you go. If you have any questions feel free to post in the comments below.

Next Up: My personal postition management style. This is NOT the best style for almost any trader. It is for experienced traders that know how to handle a lot of positions if he has to. I normally dont hold as many different stocks as I do now. But that is what the market is offering so I do it. I dont deviate from my discipline. Once you do that, you are only going to hurt yourself. Stick to a routine and do it all the time.

Happy Thanksgiving Day Everyone!

There is no commentary tonight as it is unnecessary to comment on pre-holiday trading. I will also not be posting market commentary after Friday's close, for the same reason.

Instead I plan on writing a series of columns this weekend relating to:

My trading: How I scan, setup, etc...

How I got involved in trading: What I am thankful for

Position Management, etc...

New Swing Longs: JBL ISO QSFT ECIL GHM HEII AMS

Longs Outperforming Market: RATE-90% BBD-84% ANAD-64% SPNC-66% RY-36% CWTR CTHR AKAM CHE PTC OXM NXG BBBB RNOW DEZ KPA JDSU ICTG UIC

New Swing Shorts: WEBX POSS

Shorts Outperforming Market: NONE

Stocks On Radar Screen: WZEN ISE MSSR MCBI ARCAF ALNY COBR VLG OSUR

Disaster Of The Day: ALXN. Ouch!!!

Another Late Day Rally, On Heavier Volume, Gives Stocks A Green Close.

THANK YOU EVERYONE FOR YOUR GREAT COMMENTS ON THE PREVIOUS POST. FEEL FREE TO READ MY REPLIES.

The stock market indexes all rose today-SP400/600 up .6% and NYSE/DOW/Nasdaq up .5%- as volume increased to give the markets another minor accumulation day. At first, the indexes didn't really do anything today and it felt like normal pre-Thanksgiving holiday trading until the FOMC minutes came out. After the minutes were released, volume picked up and the markets rallied closing higher on higher volume. Advances on the NYSE was 3 to 2 and on the Nasdaq it was 6 to 5 positive. The usual stocks that are leading this rally helped mark gains again today. Medical, Technology, Finance, Retail, Machinery, and EVEN Housing all rose today, showing where the leadership is. However, the Homebuilders are in late stage bases and besides BZH and MLP I do not like any of them.

The good news today to market participants was the FOMC hinting at an end to rate hikes. Well, goodness, I didn't see that coming. Joking! The market has been hinting at this since October. So this news maybe the news that helps rest this market a bit, since people are excited now that rate hikes are almost over.

Everyone has been expecting a Thanksgiving rally so this news may start a pullback that would help bring in some more bears. Still, it is hard to stop momentum, once it starts. I know I keep saying this but it is very important to look at markets like 94-95, 99, and 03 to see how bull markets act. They don't stop and rest for very long periods of time. I mean, come on, how long have they been saying this current rally is overbought/extended?

Still I did do some selling on some big winners today. For instance, I sold another 1/4 of NDAQ. Why did I sell today? If you look at an arithmetic daily chart for the year, you can see that it is making a parabolic well above its most recent base and it is breaking an uptrend line drawn across the top of the highs going back to February. These are signs to look for, for stocks showing climax tops. This cash on hand now allows me to buy the next NEW breakout.

Tomorrow is for sure to have lower volume. I was wrong yesterday; can I be wrong again? Does it matter? Heck no. Who cares. Thanksgiving is right around the corner. :)

New Swing Longs: FFFL CHE SNTO ZL LCRD

Longs Outperforming Market: NDAQ-305% RATE-88% ASGN-71% RES-69% ACR-65% CBG-48% CNVR-46% AAPL-44% BNT-41% GES-37% RY-36% EAGL-34% IRIS-33% CRDN-31% CPTS-30% NVDA-26% FAST-25% AKAM CHINA SILCF ITRI RVSN ASPM CTHR CWTR TWGP TEVA SMSC ARS KEYS SCUR GG PTC CRED TIII KEX ASVI RADN LOGI ASEI FWLT MGN COHU CTLM CRXL DEZ MU Q SBAC VGZ MRB KPA CALP BWNG ACTG KGC ING NXTP

New Swing Shorts: NONE

Shorts Outperforming Market: SYMC

Stocks On Radar Screen: ATEA SVR GAP CACH GFI

Market Commentary Later--Maybe, If I want to. I can't tell if people are reading this or not.

Not sure why I should even post. I figured after all that writing Friday, I would have gotten at least one comment. You would think my track record and loud mouth would have gotten some attention by now. Oh well. I guess one day someone will wake up and take notice. Until then I will keep writing. But if people don't start offering comments I am going to just post my longs and shorts and how they perform. This makes a good online diary but I already was making one at home for the past 3 years.

If you guys know anyone who outperforms me, let me know. Maybe I am not doing a good enough job. Or if you have suggestions as to how I can possibly get more eyes on my blog, let me know.

Thank You Very Much.

The stock market keeps on moving higher without stopping to take a rest. All indexes rose across the board, though it did come on lower volume - IBD100 1.6% SP600 1% SP400 .9% Nasdaq .7% and NYSE .5% which also made All-time highs. The late move in the final hours of trading today did have volume expanding as it moved higher which gives consolation to the fact that volume was lower than Friday. Friday was also an expiration day that normally always follows with a lower volume Monday. No matter if we go up or down. The fact that volume expanded on the upside as we rallied intraday, along with the ABUNDANCE of charts making strong moves today in my portfolio, shows how strong this market is right now.

The next couple of days is going to get quite boring. I doubt there will be much price movement in the indexes and with the lack of volume there probably will not be a lot of action in a lot of stocks. However, I am sure some fund favorites will get a nice markup in this low volume environment. This is the time of year when people get that "happy" feeling.

One day this market will stop going up and we will have to sell en mass, instead of taking profits on the way up. Until then the Christmas/Hanukkah party has started early and so far this party is rocking!

Interesting Fact of Night: SP600 is up 61% since the March 2000 top!!! As Gary B. Smith said, when referring to the Russell 2000 all-time highs, "what bear market?"

New Swing Longs: TIII STMP PTC ASVI GME.B ALY MMUS SCHN PAAS ALXN GG KGC NXTP ORA

Longs Outperforming Market: NDAQ-285% BMD-265% DESC-178% GMXR-105% WIRE-68% SPNC-63% ACR-61% CMTL-57% ANAD-56% CBG-48% SMTS-43% MNG-42% HITK-41% BNT-40% CNVR-40% UHAL-40% CMED-38% OXPS-36% GES-34% NWRE-34% LMIA-32% EAGL-31% CRDN-29% TRAD-27% CNET-25% PEIX RADS CKCM CWTR RWC SXC WOOF TESOF MRGE HOM MRB AUY SVA TOMO IT CLZR SBAC CDE TFSM NXG GRS TNOX CHRD Q DEZ MU SILCF ICTG CALP

New Swing Shorts: NONE

Shorts Outperforming Market: ARM SYMC

Stocks On Radar Screen: GROW JMBI ARBA EMBT VISG SIFY FUR OCPI

Markets End Week On A Positive Note; 5th Straight Week Up For Nasdaq

The stock market continued its bullish posture, on Friday, with all the indexes finishing higher on an increase in volume. This follow-through from yesterdays bullish day was very positive, especially with the Nasdaq gapping higher at the morning. Holding that gap up was very bullish. Along with the higher volume was pretty good breadth across the board. The Semiconductor Index rallied 2.5% thanks to MRVL which only adds to the momentum we are seeing in tech stocks. That recent strength along with the SP500 joining the Nasdaq in hitting 4 1/2 year highs is a beautiful thing to behold if you are long this market.

The stock market continues to ignore all fears that the news media and bears can throw at it. Any dip is bought and the fact the bears can't get much going to the downside shows you how hard it is to stop momentum once it gets going. This makes it hard for the bears who turn bullish to hop on. They are late and already see big gains in the indexes and stocks they watch and are too afraid to "buy at the top." So instead they do nothing, sit back, and bad mouth the market so they can get a piece of it. So now what do they do (or I heard them start doing today)? They start calling for a top. "The market is up too much, It is way too overbought," is usually what it sounds like. But no matter how loud they say it or how often they say it, you should ignore it. Their "top calling" is good news. That is what we need to keep this market moving to the upside. A heavy level of disbelief.

Granted, the markets have gone up a lot without a rest. But that is normal in really strong bull markets that have the sectors participating in it as we do now. No one said the markets were rational. That is why we go so far up without resting and we, subsequently in the future, always crash. The markets are basically a market of supply and demand. And that supply and demand is dictated by humans who are, by nature, way too overly emotional creatures. So when are money is on the line, most people see either greed or fear and act in accordance. And like a herd of rich preppy teenagers, when somebody is doing something new and cool everyone has to do it. And right now that new and cool thing is buying stocks again.

So if I write all this bullish talk what does worry me then? Not too much. The biggest thing I am worried about right now is the amount of bullishness I hear on CNBC from portfolio managers. But since the average Joe Sixpack that doesn't actively invest in the market thinks we are still in a recession and doesnt realize that the Nasdaq is up almost 100% since the 2002 bottom, I feel confident the bulls will continue to have the upper advantage.

I mean, come on, I dont care how much you hate GWB, the deficit, or the war. That doesn't make you money now to have later on to use the way you want to use it. If it is contribute to a Communist party, pay off your credit card bill, or donate to a world peace cause, you will not be able to do it because instead of taking action and profiting from the trend of the market you sat behind and complained about a wonderful rally happening when the guy you hate is in office. I didn't like Clinton, yet the stock market the Republican congress helped ignite, was good enough for me to profit off of. Oh yeah, and to say that Clinton or Reagan was responsible for the rally in the 1990's is just ignorant. Technology and its leep-and-bounds advances was causing that rally to happen NO MATTER WHAT. The advances that are made in technology, by default, will always allow the market to rally over time. That is why you can go back during any year and 20 years later make money in the stock market, no matter what year you start.

Didn't MSFT just leak a memo about Web 2.0? Has anyone heard of Nanotechnology, Artificial Intelligence, or Broadband? Ah the future looks bright my friends. Until this market turns lower, only a very angry and sad bear can hate this market. I am agnostic on it. But while it moves up I will have my bull cake and eat it to.

Look forward to the comments!!

New Swing Longs: RWC CLZR WLT CEY GGR CHINA CHRD KPA CALP BRCM RADS(if Cramer daytraders don't gap it up too much)

Longs Outperforming Market: NDAQ-267% BMD-244% GMXR-91% RES-66% WIRE-62% SUPX-62% SPNC-60% MSCC-59% ACR-55% SMTS-41% ANAD-39% HITK-37% IRIS-29% CMED-29% LMIA-28% CRDN-27% BNT-25% FAST-25% PTIX HOM OXM NSC VIGN MRGE ICTG TESOF NNDS VAS ASEI MNST STJ SXC CIB ASPM GOL KEX ANST WOOF PAYX IIJI TFSM TOMO STEL MU SVA MNG TNOX RNOW NXG SIGI

New Swing Shorts: SNS

Shorts Outperforming Market: SYMC

Indexes Finish At HOD; Broad Rally On Heavier Volume

Another Accumulation day for the indexes as the SP600 was up 1.8%, the Nasdaq was up 1.5%, and the SP500 was up .9%. Volume increased across the board but was not that much higher than yesterday. However, since volume was up it was an accumulation day. Another sign that there was decent accumulation today was the broad rally in all sectors which gave the market great internal breadth readings on the day and helped the indexes close at their HOD (highs of teh day) - All three indexes.

4 1/2 year high on the Nasdaq and ALL TIME highs on the Dow Transports are pretty amazing considering this economy is supposed to not be in good shape. Well, all time highs in another index along with the SP600 already making all time highs tells me that 10 quarters of 3% GDP growth is pretty good and the economy isnt as scary as the bears like to paint it. Silly bears, your opinions are worthless, unless the market is moving in the direction of your opinions. Since 2002, you have been wrong and at 4 1/2 year highs on the Nasdaq you are still wrong. Facts are for winners (fundamental and technical analysis), opinions are for fools (perma-bears that think Armaggadon is starting tomorrow).

Over three-quarters of my stocks were up on the day and almost half were up at least 1%. It doesnt get much better than this. What makes me more excited about days like this is the fact the indexes were only up .5 to 1.5%. If we would have been up more, I wonder what my account would have looked like. :)

More Commentary Before Opening Bell.

New Swing Longs: CWTR FFIV TFSM DCGN BFR NXG CDE AUY GRS BAM STEL PEIX MRB

Longs Outperforming Market: ESLR-69% NRPH-65% EMKR-60% SUPX-60% ACR-52% SRLS-45% SMTS-39% NUHC-31% OXPS-30% EAGL-30% LTON-28% LMIA-27% CPTS-27% MNG-26% ANST TRAD CMED CKCM NMR GOL NWRE RADN RTK RNOW FDRY SILCF GAIA UIC CVO BNT TEVA CIB MIDD FAST EDS PAYX CTHR SXC HOM KYPH ISIL NSC SRCL VAS ICTG KEX MNST FWLT SVA ANAD SBAC NOVL SSFT Q UBS ING

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

A Day That Really Had No Meaning To It

Today was one of those days it is hard to comment on as there was not much action. The major market indexes basically did nothing today, basically closing unchanged. The good news is that after morning weakness the indexes closed strong. Despite the strong close though breadth was weak all day long and there were more new lows than new highs. That is not positive, no matter how anyone spins todays up close. To go with the bad breadth, the two leading sectors today was Oil and Gold. I am not sure what that means. It is either bullish or bearish. I don't know.

The Nasdaq has been having a hard time getting over that 2200 level that has been acting as resistance for the past 4 1/2 years. That heavy resistance might be the reason we cant get a lot going on the upside right here. Another reason could be that more people are bullish than I thought would be at this point. The way the media rants and raves about the economy ready to explode into a recession, I was stunned to see that for the second week in a row the amount of Newsletter Writers who were bullish increased again to 53%. I definitely would have thought it would fall this week, after all that I have heard on TV, despite what the market has done. 53% bullishness is not extreme but it is close to that 60% level that marks a contrarian bearish position. But these indicators are not the final say. The final say is the price and volume action of the indexes. Until they start breaking down on higher volume, the trend is up and bullish. Just like overbought markets can stay overbought, bullish newsletter writers can stay bullish for a long time before market turns down.

Until the market turns down, the short-term consolidation continues in this very strong, resiliant market. All trends are up in all time frames: short, sub-int, intermediate, and long-term.

New Swing Longs: FDRY SNPS SILCF DEZ(replacing the 1/2 of position already sold)

Swing Longs Outperforming Market: GMXR-89% RES-64% ESLR-64% NRPH-58% SRLS-44% AAPL-40% HITK-34% NUHC-29% UHAL-28% TESOF PTIX ASPM MNST CKFR MRGE MNG DEZ UIC

New Swing Shorts: SYMC BCSI

Shorts Outperforming Market: ARM

Stocks On Radar Screen: SIL YHOO FFIV VLCM CNTF DAKT

A Needed Pullback; Small Stocks Get Hit

The major stock indexes fell across the board today, with the SP500 down .4%, Nasdaq down .6%, and the SP600 down 1.1%. Volume came in higher on all indexes today, giving the indexes either their second or third distribution day since the start of the rally. The consolation prize to todays distribution days is the fact that the volume on the Nasdaq was below the 50 day volume average. However, the volume on NYSE was higher than its 50 day volume average but still below the volume it saw on the upside since the rally began. So there was some light to the day. Another positive is that all indexes still remain above their 50 day moving averages. So that level of support is still there to bounce off of.

This market needed a day to scare the bulls and embolden the bears to push the short side. That will create a healthy backdrop for further upside potential. So the down day was healthy overall and it was what I was asking for. The constant negative news helps keep a less than bullish bias out there so any drop should help the contrarian trader. Slow and steady in an uptrend is much better for long term gains than huge quick burst. Those burst usually end in a big pullback. It is the slow and steady that wins the long race.

I have to admit, though, the selling in some of my small cap stocks was stunning and my account got hit harder than what I thought it should have today. I am partial selling some of my longs with big gains and stocks that are not acting well tomorrow. However, I am not selling a lot, for most of the stocks still have very solid long-term chart patterns.

What happens now is what is important. There is always ocassional distribution days during markets in uptrend but further high volume selling would be problematic and cause a higher level of concern on my part. But if we bounce from here and base a bit I will sleep much easier knowing that the markets uptrend is safe. If we rollover, be ready. You never know what can happen. I really don't think we will, due to the constant negative headlines I see everyday. But I have been surprised by less.

New Swing Longs: TESOF

Longs Outperforming Market: SUPX-56% SRLS-38% PTIX ICTG EMKR MRGE NUHC

New Swing Shorts: WPS EDO ARM

Shorts Outperforming Market: NONE

Stocks On Radar Screen: PTC HRAY NVAX VISG SSTI ELOY PEIX

A Quiet, Listless Day With Little Meaning

The stock market did absolutely nothing today accept consolidate recent gains of the past four weeks. With no economic reports on hand today, that might have been a reason for the lackluster trade. Another reason could just be an extended Veterans Day vacation. Whatever the reason is, it is still nice to see the market pullback on quieter volume (NYSE volume was higher but mainly due to GP).

A nice pullback on low volume or some sideways action would be welcome right here to help set up a nice launching pad for a strong rally. A pullback would also help dampen the bullishness and increase the bearishness which would help support further price advances. The bears have been out heavy the past four weeks yet they have been unable to do anything of significance to the downside. In time they will give up and become bullish, but usually that happens later on in a rally. So until that happens there could be some great stock gains to be made out there.

Even though the market was quiet today it probably will not stay that way. This week is loaded with economic data that should light a fire under this market. With the current seasonality being favorable along with the amount of beautiful charts of stocks with great fundamentals, it appears we could have a nice year-end rally. But no matter what happens just make sure you stick to your buy and sell rules and IGNORE ALL OPINIONS OF CBS, ABC, NBC, PBS, CNN, etc. Those idiots who run those programs and produce those SCARY shows about the economy have never made a dime in the stock market and I gaurantee you they will NEVER make you a dime either. Ignore their negative biased news and concentrate on the facts -- charts, earnings, sales, return on equity, sponsorship, profit margin, etc. That is what makes you money; not the perma-bears calling for a collapse of US economy. How many years have they been on that? I have been trading since 1996 and I remember hearing about it then. Some things never change. THANK GOD.

New Swing Longs: BOT SVA PTIX

Longs Outperforming Market: NDAQ-251% BMD-220% BTUI-108% PETS-95% RTSX-88% SYNC-81% WIRE-61% SUPX-53% MESA-41% AAI-40% SRLS-33% CNET-28% OXPS-28% LMIA-27% EAGL-26% CTHR HOM ASEI CKCM TSCM RNOW CPTS ELOS WBSN DJO LIFE CKFR MNST CMED VAS RSTI CIB ISIL RADN TEVA LCAV BCO ABAX BWNG BVF SWIR OUTL NUHC BNT

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Stocks On Radar Screen: GROW ONCY AVII TIII MED STEL

For A Slow Day, There Were A Lot Of Stocks Showing Great Gains

More Commentary Later:

When you are positioned correctly, days like today kind of sneak up on you. Friday was one of my better days of performance in the markets where almost half of my holding were up 1% or higher.

This market is way overbought and a lot of bears have turned into bulls so I am feeling a bit cautious about a lot of further upside in the short term. However, with how strong the overall big picture of the market is I believe we may get overbought and stay overbought. Also a lot, but not excesive, bullishness isnt necessarily a bad thing. Much of the 2003 rally came with bulls over 50%. It is when they get to 60% it is sketchy. Even then in strong bull markets it dont matter. It happened in 1995 and 2003 and both years saw the Nasdaq make 40%+ gains. Both were long term bull markets that had very little pullback in them. How is that possible you ask? It is because of the fact that these surveys that grab opinions of writers and investors and not the actual data of their trading. They may say they are bullish. But are they invested? And if they are invested are they 100% or 20% invested? That is why in run-away bull markets you can get 60% bullishness among newsletter writers yet have the market rally huge. It is because they are bullish and still have not fully invested themselves. You never know why they did this. Maybe they didnt "believe" in the market, maybe it was "too expensive," or maybe they have certain rules they have to follow. Whatever the reason it doesnt matter, if the markets are ON FIRE. The markets will leave a trail of dust in the paths of the slow-to-act traders.

New Swing Longs: CKCM WBSN KYPH ICTG ING

Longs Outperforming Market: VRTX-97% RTSX-86% BBSI-71% AOB-68% LCC-62% NRPH-58% WIRE-55% SUPX-51% MESA-39% TRAD-30% NWRE-30% HITK-30% CRDN-27% CNVR-26% LMIA HOM VIGN TOMO ERS CPTS MORN MNST NMR CMED BNT LCAV CPSI SCUR EAGL ARS SAY GOL CKFR CIB NNDS TEVA LIFE MIDD DJO SWIR VGZ TNOX BVF WEBM ASPM RSTI NUHC

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Small Cap Stocks On Radar Screen: TIII AKN CSU

It Is Hard To Stop Momentum On The Upside

Markets can travel further and faster than you think. Go back and look at every bull phase of the market past 20 years. You will see during every bull market there were few pullbacks. Momentum once it gets started to the upside is hard to stop. Overbought markets can remain overbought for a long time. So all you perma-bears out there should wake up to reality and realize you are dealing with one of those kind of markets right now. Until this market rolls over you are playing with fire if you are shorting stocks. Remember, three out of four stocks follow the general trend of the market. That trend is long and strong.

If you hate GWB, fine. If you dont like the deficit, fine. I dont either. If you dont like the war, fine. But who cares what we think. The only thing that matters is the facts and as you will see below the facts speak for themselves. This is a great market for longs. Period. There is a lot of money being made on the long side right now. Now is definitely not the time to be bearish.

If anyone is wondering why I am addressing this subject it is because I monitor a lot of chat rooms and I am shocked by the traders who have been trading for 15+ years that still can not read the market and can not seperate their emotions from their trading. After 10 years it still feels like I am in the very first stock market chat room I ever entered. Some thing never change. Thank God!

New Swing Longs: ADP SRCL RSTI ASPM DJO ERS TOMO EMT MEL UIC

Longs Outperforming Market: DESC-184% LCC-60% ACR-48% MESA-37% AAI-35% MIDD-28% OXPS-27% LTON-26% EAGL-25% TRAD CMED LMIA MRGE MNST CRDN FAST LOGI STJ PAYX BNT MDCC SIGI SAY ISIL KEYS HSP CPTS NFLX WEBM Q ABAX GAIA PEGA NUHC

The Stock Market Produces More Big Winners In Individual Stocks

The major indexes continued their march up after going lower yesterday. More sideways action would be great right here to get the bears growling again and help lesson the bullishness of the bulls. But upside action is welcome too as that shows that stocks are very strong. And that can only help your help your bottom line. Breadth was good today and volume was mixed so it was one of those days you can't get too much of a read into. Except to say, that for a market that is supposed to get weak it sure can't mount much of a move to the downside. Maybe that will happen later but for now the trend is your friend. And when your friend the uptrend is around you definitely can make more money with it than you can with your other friend the downtrend. Both are your friends but one is WAY MORE rewarding. What's the most a stock can go down? What's the most a stock can go up?

New Swing Longs: CMED ASEI CTHR LCAV CPTS SMSI WEBM ASML LMIA PEGA KEYS

Longs Outperforming Market: NDAQ-241% BMD-219% DESC-171% VRTX-92% RATE-84% RBAK-72% ASGN-65% AOB-63% SYNC-62% CCI-59% LCC-52% SUPX-48% ACR-46% TFR-28% FAST-25% KG MRGE OXPS VTIV RADN BNT FWLT IIJI ARDI LRCX ABAX SMTX CIB SBAC MCX

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Small Stocks On Radar Screen: TRT ICTG

Markets Take A Rest On Lower Volume

The major market indexes finished down today with volume lower across the board, except on the SP600 where volume did increase but it was not by much. Breadth was negative all day with few groups ending the day up.

The pullback in the indexes was needed today as the markets were getting a bit overbought. A pullback, after this good run, is needed to help create bases in strong leading stocks so that when they breakout they will have a stronger base to launch out of. This pullback also keeps people from getting too bullish too fast and helps bring the bears out of the "I told you we were go lower" camp. With that kind of backdrop it will make it easier to climb that proverbial "wall of worry."

So it was a boring slow day that didn't have much excitement about it besides TOL. The big news was TOL and its earnings guidance and miss. To that news I say: DUH! Every stock in the Homebuilders group started breaking down in July/August on heavy volume. Besides that, Ken Heebner the fund manager for CGM Focus Fund-One of the best funds past 1,5,10 yrs-sold all of his Homebuilder stocks earlier in the year. Why is that a big deal? Because he was buying them in August of 2000 and held them the entire way up. He invest in only the best of the best. He is the best and by looking at the stocks he holds you will see why he is. If you would have invested $10K in CGM Focus five years ago it would now be worth $35K+. What stocks is Ken Heebner buying now? Go check it out for yourself.

New Swing Longs: SMTX SBAC ABAX COHU DDD

Longs Outperforming Market: NDAQ-236% DESC-162% WIRE-63% CCI-55% SUPX-45% LCC-43% ACR-41% NWD ARS VTIV SCUR MDCC RVSN MORN LDSH ARDI ACTG OPTC MECA TFR

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Small Stocks On Radar Screen: ICTG EPAX AABC NTII

Indexes Up For Fourth Day In A Row

The markets finished higher on mixed trade today, with great breadth. Momentum continues to favor the bulls as once momentum starts it is hard to stop. And bullish markets once they become overbought can remain overbought. I bring this statement up because there is a lot of chat room and message board participants calling for a near term top. Uh, maybe, but I recommend those that have www.realmoney.com to read Guy Lerner's article about markets getting overbought and staying overbought. Like in 2003. Does anyone remember that year? Or is our insatiable ADD too severe to remember something that just happened two years ago? Oh yeah. It is.

There are a TON of great looking charts and longs that are acting well. Until that pattern changes I remain long in a Bull Market.

I left out a few sectors yesterday on the leadership board. Here they are:

MEDICAL-PRODUCTS
TELECOM-FIBER OPTICS
COMPUTER SOFTWARE-MEDICAL

Those combined with the sectors in my previous post show you where the REAL leadership is.

New Swing Longs: SCUR NWD TSCM KOPN MECA BWNG LIFE ACTG

Longs Outperforming Market: BOOM-282% NDAQ-229% BMD-202% DESC-140% RTSX-75% MFLX-63% ASGN-57% AOB-53% WIRE-51% SYNC-51% THOR-48% ACR-40% HITK-38% HOM CPSI ITRI BNT ALO CRED EAGL ELOS PAY MDCC FAST NMR VAS CAMP WSTC TAYC CTLM BCO IIJI TQNT ARXX ABMC FIX GAIA

New Swing Shorts: QSFT COG CMCO

Shorts Outperforming Market: ECA

Market Closes The Week The Way It Began: Strong

A lot of sectors have been taking new leadership roles the past three months. So since some of you stock traders have been saying that this rally isnt going to hold. I would like to ask why are all these sectors making big moves the past three months?:

BANKS-FOREIGN
FINANCE-INVEST BROKERAGE
INSURANCE-PROP/CAS
TRANSPORTATION-SERVICES
COMPUTER-MANUFACTURER
INTERNET-CONTENT
TRANSPORTATION-TRUCK
FINANCIAL SERVICES-MISC
ELECTRONIC-PARTS DISTRIBUTOR
COMPUTER SOFTWARE-DESKTOP
COMPUTER SOFTWARE-SECURITY
INTERNET-SOFTWARE
COMPUTER-NETWORK
MEDICAL-BIOMED/BIOTECH
MEDICAL-SYSTEM EQUIP

Do you see that list. Those sectors aren't Gold, Oil, Metals, and Food. It is real leadership in sectors with real long term growth. The fundamentals on some of the companies in these groups are out of this world (ie...GOOG). So until we rollover and make new lows this market looks as strong as a BULL with big giant bloody horns due to the death of the BEARS.

No matter how terrible you think the deficit is, the market currently doesn't care and only cares about what is really important. GDP growth and corporate earnings. And both are rocking! Until that changes all trends are up.


New Swing Longs: OPTC VAS RL ITRI ELOS ARXX ALKS SHPGY PMACA

Longs Outperforming Market: BMD-183% RBAK-80% ESLR-58% LLC-40% AOB-37% GES-34% CRED-30% RADN PETS CAMP CLDN TRAD MRGE MDCC RVSN BBBB BVF CNXT NMR Q ABMC SYNT

New Swing Shorts:

Shorts Outperforming Market: NONE

Small Stocks On Radar Screen: ICTG EMBX ESP

Markets Continue To Move Higher

I took more profits today than new positions. Taking some profits on the way up, after stocks have made 50%+ moves is just a wise thing to do, in strong markets like this. There are plenty of new stocks out there that are ready to replace the PRLS, ASF, BMD, and NDAQs.

New Swing Longs: SXC MORN ICON JDSU TNOX GAIA TW

Longs Outperforming Market: BMD-158% BTUI-89% RTSX-68% ASGN-53% SUPX-41% MESA-35% ACR-35% CVO-35% AAPL-34% GES-29% NWRE-26% TRAD NUHC PETS LOGI FCN FAST PNRA CKFR MRGE CPSI CAMP EDS MU TEVA IIJI IED EAGL BKHM REGN ICGE ISIL BVF RTK LRCX AXE JCDA SYNT ABMC

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Markets Stage A Big Rally On Very Heavy Volume. Most Markets Close Near Their HOD's.

The SP600 was up 2.1%, Nasdaq 1.4%, and the SP500 up 1% for the day. Volume came in much higher than the day before and well above all the indexes 50 day volume average. The markets rallied with great breadth also, with the NYSE having a positive ratio of 3 to 1 and the Nasdaq with positive ratio of 5 to 2. The above indexes have also now all crossed their 50 day moving averages to the upside. Reversing a trend of the previous two months when the indexes would fail at that key line. Also the downtrend line on the Nasdaq chart connecting the tops of the past 3 months has been broken to the upside. Overall a very BUSY and bullish day.

I would prefer to see some nice consolidation right now before further upside. That would help set up some properly formed and pretty bases that would help power a stocks launch. But a coninued move up would be wonderful too as there are plenty of current longs that are breaking out or about ready to again.

Days like today can make a traders year. My year was made today! This is the reason you buy great stocks breaking out of great bases in strong sectors no matter how bearish the crowd is.

Another thing about GDP. GDP has been growing at over 3% for the past 10 quarters in a row. That is extremely strong considering how we just went through a recession. Dont foget, right after the tax cuts in 2003, GDP was 8% higher than the year before. That along with 10 quarters of 3% higher growth is very bullish for the economy and I am not sure why people stress the deficit over the GDP growth. The deficit is very important and we need to get spending under control cause it is out of control. But the current GDP growth we are seeing along with the great earnings show that this economy is strong. How the media likes to scare people out of buying stocks. Even I hate the current spending by the administration but that has nothing to do RIGHT NOW in the stock market. The GDP is way more important.

Silly bears, bearishness is for GWB haters. If you bears could stop hating the President for a little while and instead focus on the facts of the stock market-Tech, Financial Firms, Insurance, and Biotech/Medical stocks leading-you might have been long for the advance also. When these sectors show leadership at the same time that can make for a very powerful rally. I am not sure why or how you could be bearish, after today, if you were bearish still the past week. Remember I was a bear when we were going down but now we are going up. So why fight the trend? Especially when you have all these stocks breaking out and making good moves.

Bottom line: I have never met a "rich" bear.

New Swing Longs: AMED NNDS MOT PNRA HXM CNXT BCO KFRC IDCC Q MPS DB MU BNT TGS LQU ABMC

Longs Outperforming Market(stocks with % show the price performance since initial entry): NDAQ-247% BOOM-245% PRLS-226% ASF-172% BTUI-86% VRTX-80% BBSI-58% ESLR-36% AAPL-36% MESA-34% ACR-33% LLC-31% OXPS-28% FCN SMTS MDCC GOL WOOF SUPX STJ KG CNQR ADSK SIGI CPSI BBBB NWRE OXM FAST HITK MRGE MNST KEX WSTC CTXS RLI TRAD IINT RBAK IVIL LRCX IT PGR RVSN SYNT

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Indexes Consolidate Recent Gains

A minor pullback across the board today on good volume, for the indexes. The amount of charts that came up in the scan indicate to me that the high volume was buying power hidden underneath a heavy market because of DELL being down 8%. So this is no distribution day. Another positive, along with the charts (facts not opinions) is the amount of bears still saying this rally is marked up. We will see in time but for now we are going higher and I see plenty of good charts in Biotech, Tech, and Insurance. Those have some stocks with some HOT HOT HOT growth. So I am not sure why the bears are so negative right now but we will see if their prophecies come true. You know what would be the best? If the market goes sideways right here for a while before going up again. That will ensure the bears will overextend themselves and help launch a powerful rally. But just as cool would be to rollover. Unfortunately, the bears are so negative that it makes me sick. So I hope that doesnt happen. Either way, lets play.

With earnings starting to rap-up and all the bears in the chat rooms and message boards it feels like we might have crashed the past week. Instead we are up from then and still above the October lows. Until those lows are broken it is foolish to be bearish when there are so many good charts showing up.

A history lesson: During seven straight hikes by the Fed from 1994 - 1995, while people were very bearish, the SP 500 looked ahead and rallied 54% from Dec 1994 - May 1996. The Nasdaq rallied 61%. It didn't pay for those bears then and when this raps up it probably wont pay for the bears also.

However, we could rollover and all of this is wrong. Hah! LOL! Then it is time to short.

You have to be ready for anything.

New Swing Longs: GOL BAP MNST LOGI RTLX MDCC CPSI ZUMZ RVSN HSKA RTK UBS NMR

Longs Outperforming Market: ASF-160% PRLS-223% NDAQ-203% BRLC-78% ASGN-45% PETS CNVR OXPS EDS CKFR PAYX ESLR BKHM SHOO GES LWSN

New Swing Shorts: RTI

Shorts Outperforming Market: PRAA

Markets Follow Through On Higher Volume; Too Many Bears Out There

I listened to people all day deny what was happening today, as the market rallied. That is exactly what you want to see at the start of a rally. While this rally may not be perfect, it is a rally none the less.

There are lots of charts to scan tonight that have very nice price patterns. This is a good thing to also see at the start of a rally.

I will try to post more later but I doubt it. Tonight is Halloween and if you have never been to Maui you will not understand why I will not be around tonight. Halloween in Lahaina is the "Mardi Gras of the Pacific." Tons of people walk Front Street for six hours showing off their costumes while partying their behinds off. It is an experience.

So maybe I will be back to give more in depth commentary later. But the odds maker in me prices that at about a 18% chance of happening.

New Swing Longs: CIB MRGE EDS CTLM EAGL SHOO BKHM

Longs Outpeforming Market: ASF-145% BTUI-77% BRLC-68% THOR-46% MESA-32% SRLS-31% AAI-28% HITK-26% NWRE PAY CAMP ANST RAIL SAY TWGP RLI SIGI AAPL ABAX EFII

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

Markets Snap Back; Nasdaq Rallies On Heavier Volume Than Day Before

Not a whole lot to add here this weekend. The markets were wild the past week, yet closed up. Why did I say yet? Did you hear all the negative and ugly talk about the stock market this past week. Sheesh. You could have sworn we crashed last week, YET here we are finishing the week up not down. Forget emotions when it comes to trading. You dont make money with your opinions. You make money with the price bars (or candlestick bars).

The one thing I keep learning every earnings season is the fact I HATE REGULATION FD. This thing is a joke. News being leaked out to favored analyst used to help good traders spot institutional buying and selling before earnings. Now there are blowups and gapups. It is a silly rule that really does nothing but hurt traders who trade for a living. Now if you want my opinion on Sarbanes Oxley, I point you in the direction of the pink sheets. There on the pink sheets you can find this stock called Refco. Good thing Sarbanes Oxley was there to protect investors. PFFFFTTT. Once again, a joke. Crooks are crooks no matter what. No stupid law will stop a crook from being a crook. Instead all the great companies have to spend a ton of money to protect the investor from the Enrons. This stupid law is set up to protect investors? How? Why is an investor investing in a company like Enron anyway. If it looks to good to be true and you cant figure out how they are doing this you dont invest in it. There should be a Sarbanes Oxley law for people who invest money in scam companies trying to get rich. If you are greedy, you get what you deserve. There is a fine line between Capitalism and greed. Greed is the reason so many Anti-American people bash capitalism. Greed is also the reason new traders that get into this game "to get rich" will be gone in three months to one year.

This is a game that works only for the people that love the game. AND I LOVE THIS GAME.


New Swing Longs: AXE WSTC ADP RAIL GMCR

Longs Outperforming Market: KEX SIGI LCC REGN ASF(139%) WES SYNT

New Swing Shorts: XNPT UTHR MOH TU EMAG

Shorts Outperforming Market: NONE

Small Stocks On Radar: ICTG IFO SNTO RLH

Heavy Selling Hits Market But Only One Index Suffers A Distribution Day

Today was ugly, without a doubt. Great heads-up by a couple of readers of this blog. You guys were on it, I was off. I still don't think there is too much downside left with how negative everyone is but I guess we will find out.

Anyways, as for the markets, the techs and small caps got whacked. The SP 600 was down 2.3%, the Sox down 2.7%, and the Nasdaq was down 1.7%. It doesn't get much uglier than that but there was one odd divergence. Volume. Volume was lower across the board, besides the SP 600 which suffered a distribution day. So far price is still rising on higher volume and falling on lower volume. Lower volume doesn't dismiss how ugly today was but it showed that institutions weren't stepping over each other in huge block trades trying to dump their shares. Besides that we still haven't failed the lows of the recent rally so the rally is still technically not dead. Though there is a lot more charts that don't look good at all, so that could change with further selling.

Still the market looks a lot weaker than it did after the close on Monday. The SP 500, 600, and Nasdaq are all trading below their 50 and 200 day moving averages. Also all have recently cracked key support levels at the 200 day moving average. All of those facts show that the market indeed is weak.

What is funny, however, is how much negativity there is out in stock land. Chat room bears are getting more aggresive with their talk and the markets are getting quite oversold again. I have already mentioned the Put/Call, Newsletters, and VIX contrarian readings so I won't go over them again.

I took a small hit today, but oddly most of my swing longs still look pretty good. Looks like October will be a "red" month for me, after all.

New Swing Longs: KEX CKFR RDTA SYNT

Longs Outperforming Market: REGN PRLS(205%) RNWK SWIR

New Swing Shorts: SRDX ERES CNX TRID ROP

Shorts Outperforming Market: PRAA ECA

Small Stocks On Radar Screen: VNX FUR ICTG CWBS RLH

Disaster Long: PPDI (-10% gap down) It happens, in choppy markets

Markets Suffer A Small Distribution Day

Markets finished down on higher volume, though the indexes were only down between .3 to .8%. Higher volume, on a down day, is not something you like to see at the start of a rally but a day here or there with mild declines is normal in most rallies. If the Nasdaq was down 2% today, I would have been worried. But the mild decline looks very normal and nothing to panic over yet.

To give an example of a distribution day popping up after the start of a rally, we can go back to the March 2003 rally. After the 5.9% gain on the Nasdaq giving a follow through day in mid March, the index was hit with a 2.1% drop on higher volume soon afterwards (check your charts). The stock market soon reversed and went on to new highs.

Another thing I want to comment on is the bearishness among traders. Pessimism is getting very thick and redundant in the chat rooms I monitor. Everyone is calling for an outright collapse. My years in the market tells me these guys are ALWAYS wrong. They may be right 6 months from now, but for the meantime the markets are rallying and longs have been very profitable the past week. Another positive development is the Investor Intelligence Survery of Newsletter Writers. The amount of bullish newsletter writers fell for the 5th straight week. This is one of the better contrarian indexes out there and I find it usefull to gauge bottoms when the bulls/bears line gets close to crossing or actually crosses.

I want everyone to understand I am not a raging bull, in this current market. I simply play whatever side the market is favoring. And right now it is the bearish side. Remember, not too long ago I was loaded to the gills on shorts. I favor no side and always find it funny how people can fall in love with the bull or bear side. Both sides are cool with me. But the bears are the most pessimist and angry group of people I have every met in my life. THAT IS THE TRUTH, no matter what anyone thinks. The bears will be bears, I have a feeling for at least another 3 yrs.

New Swing Longs: WOOF SWIR SIGI DIET

Longs Outperforming Market: CRDN RCCC SYNC WIRE PAYX

New Swing Shorts: PRAA ECA

Shorts Outperforming Market: NONE

Small Stocks On Radar Screen: BWCF FLT ACEC JCDA TELN

Markets Consolidate

The markets started the day alright then started to drift down the whole day, until the last hour of the day. The last hour provided a nice rally that left the bears who were calling for DOW -200 quiet and sad. The close in the upper half of the daily range gave the day's action a bullish feel to it. However further weakness would be welcome to get those extra negative bears pumping their shorts harder. That would guarantee a nice rally.

Earnings are good and most companies are having no problem beating expectations. This continues to prove that the economy is still strong and not as weak as the ridiculous bears think. The market could fail to reach new highs and rollover and make new lows, but until that happens why root for it? It doesn't make sense. The big money is made on the long side and their is plenty of money to be made in tech and insurance stocks right now.

So, once again, it is silly and plain stupid to be bearish when the trends are up. Until the trends turn down and these nice charts in tech start failing, I refuse to be "brainwashed" like so many traders I listen to in chat rooms. No wonder this job is easier to those that can take emotions out of the market. Every day I trade I realize why the good traders are good traders. They are able to keep their emotions under control and play the trend no matter what direction it is in at all times.

Great luck and remember: YOUR OPINIONS AND MY OPINIONS ARE WORTH NOTHING TO THE STOCK MARKET. NO ONE CARES AND THE MARKET ESPECIALLY DOESNT CARE. That is the cold hard truth. Our opinions are useless and always will be to the market. What matters is facts and below are the facts.

New Swing Longs: RNOW JDAS

Longs Outperforming Market: ABAX WIRE BTUI PRLS PETS AOB SRLS CAMP ANST HOKU

New Swing Shorts:

Shorts Outperforming Market: DGX

Technology Stocks Are On Fire; Markets Close Higher Though Volume Was Lower

Stock market indexes climbed throughout the session today with the SP600 up 2.2% to the Nasdaq's 1.6% gain. Volume was lower, however, across the board. I would have liked to see volume pick up, but with all the individual stocks moving it appeared institutions did go to work today.

There is a lot of uber-bears out there in the chat rooms I monitor. And they all have great points. From the yield curve about to invert, to inflation, to the new Fed chief, hurricanes, and whatever. But no matter what the worries are out there, which are all excellent valid points, until it actually shows up in the charts it is useless information.

Trust me, I am worried about too many rate hikes but the charts tell me for NOW I should not worry. Who knows maybe the Fed is done. We don't know and it doesn't matter what happens in the future. What matters is what is happening now. Right now, tech stocks and some other sectors stocks are going up A LOT and have very nice charts. These are not ugly breakouts, people.

When the market rolls over I will turn bearish again but for now any bearish argument is pointless and useless if you want to make money. I dont care how much I think the market is going to fall. If the market is going up, I am wrong. Bottom line. And that is the only line that matters if you are a professional stock investor.

With all this bearishness, maybe the market will climb the wall-of-worry to new highs. I would love to see the perma bears squirm some more. I love the short side as much as the next guy but shorts can only fall 99%. Longs, on the other hand, have an unlimited amount they can move on the upside. You can not get a 1,000% on a short, in a bullish market. Much less any market. LOL. Also history shows the market goes UP over time. Not down. Why fight the trend?

Just some thoughts to think about before the bell on Tuesday. Whatever happens, enjoy.


New Swing Longs: TWGP PETS ANST OUTL VIGN FWLT REGN TQNT ARDI TMNG RADN

Longs Outperforming Market: HOM AOB CRDN PMU REDF PRLS SRLS IRIS WIRE SMSC CAMP BTUI SGR CAMD JCOM FLSH PAY NDAQ SUPX NWRE RLI KNOT CTXS VIVO TEVA SAY AH GES OXM MESA MACR NOVL MTN BBSI

New Swing Shorts: DGX

Shorts Outperforming Market: NONE

Small Caps On Radar Screen: CMRO

Sidenote: Amazing day! If you read my previous post you will see I mentioned ending October in the red. Well, if I have one more day like today that will not happen. Amazing what one day can do to your portfolio when you are positioned correctly.

An End To A Very Volatile Week

The stock market indexes basically were unchanged up .8% to down .6%. The mixed day showed the changing of leadership that we are currently going through.

The old leaders-Homebuilders, Oil, REIT, and Metals-mainly reside in the NYSE and are your old Dow type stocks. The up and coming leaders hail from the Internet, Software, Commercial Services, and HMO sector, with most of these stocks trading on the Nasdaq (not all of course, but most). This sector rotation is obvious when we look at the index of the DOW and NYSE which have both failed the follow-through day from Wednesday. They still have not undercut the lows of the short-term rally but failing the follow-through day is very negative for these indexes which house the old leaders.

The good news is the Nasdaq and SP 600 are still holding up from their Wednesday follow-through. And these indexes are offering up the fresh breakouts in the above mentioned new industry leaders. This to me is very positive for a Jim Cramer tech rally into next year. If it happens great, if it does not happen just make sure you have a disciplined cut loss strategy. That way you can live to fight another day if this rally doesnt work out. But not being positioned in the leaders as they breakout because you don't "trust" this market is the silly rationalization that cause many investors to underperform in their portfolio.

I will take my long signals and run with them until they dont work. If this rally fails I will be happy, if it succeeds I will be happy. Why? If prices go lower that will clear out more of the "weak traders" and help create a stronger bottom to help launch the BIG winners. If we go higher now I make money NOW. I can't be bearish on any market that moves up no matter how "smart" I think I am.

Which brings me to my last point. No matter how YOU think the economy is doing, it doesn't matter at all. What you or I think is meaningless and will NOT help you make money. Only reality can make you money. And reality lies in the charts and fundamentals. If both are great and you think the market should crash. Well guess what I will enjoy making money while you cry about how the stock should not be moving higher.

After being a lurker in chat rooms for over ten years I can tell you one thing: There is never a loss for "know-it-alls" that never ever make money but offer opinions all the time. Don't these people have anything better to do? I guess not. Maybe they are just like me and addicted to one of the greatest professions on Earth. Or maybe they made their millions and now would like me to have it. Either way, bring them on more and more. The more that play the higher my pay.

Have a great weekend and I wish you great luck and continued success in the upcoming weeks.


New Swing Longs: RHI SAY CAMD SGR LEXR IINT RNWK CTXS GORX

Swing Longs Outperforming Market: SUPX MESA SMSC TEVA BTUI BRLC FLO WIRE MACR MTN

Small Stocks On Radar: PV BRN TRT KNAP MFW

New Swing Shorts: None. I am sick of destroying my returns trying to play this side. I don't know how well people can possibly be doing in this market on the short side, unless you are in oil stocks. All my gains in all my shorts the past two months have been given back in a matter of ONE WEEK! That is trading my friends. All those homebuilder and REIT short gains I made have been given back thanks to overtrading the past week on the short side. Ten years later, here I am making the same mistakes I made when I started. Funny thing is 50 yrs from now, if I am still alive, I will make these same mistakes. Why?? Because we are working with REAL MONEY. By default that will cause you to make completely ignorant decisions even when you know you should not.

Shorts Outperforming Market: None. I give up on this side, for now. I will wait for a full blown "obvious" recession to hit us before I visit this side again. OK. So I probably will not wait that long. But from now on the whole sector needs to be breaking before I dabble as "hard" as I did with these terrible short trades the past week.

I thought I would never say this, but if it wasnt for my ability to make consistent money playing poker I dont think I would have a pay check to show for the whole month. One thing is for certain: I will be ending the month of October with a loss from over trading. Hey that is my style. Every once in a while you go through this. It happened last year for a couple of months and October is no different to me this year.

Thank God for Poker! ! ! !