Incredible Broad Rally on HUGE Volume. Correction Is Over.

What a hectic day today was, with a move into a new place. But who cares about that? Did you see the market? Wow is the only way to describe it.

Despite Katrina and all the horrible scenes coming from the south, the market rallied today across the board and did it on STRONG volume. I guess I should have seen this coming, yesterday, when I saw all the strong stocks show up on my scans after that early reversal from the lows. All the new swing longs that I had as new buys yesterday was the ultimate "poker tell" that something big might be about to happen. And it did.

Stock climbed until the close with the SP600 up 2.1% and IBD up 2.5% to lead the way. The indexes finished the day on volume that was very impressive. So impressive I am repeating myself again. NYSE and SP600 volume was the highest since June and the Nasdaq's volume was above average and higher than yesterdays. Very positive action. It shows that institutional investors went to work and accumulated stocks everywhere. Breadth was positive at around 3 to 1 on the NYSE, and 190 out of 197 of Investors Business Daily industry groups finished positive. Very impressive numbers. And to go along with all these numbers there were a ton of breakouts today in oils, biotechs, semis, and anything building/construction related.

Despite all of this, I heard from a friend today how sick he was of how bad the market is doing. I told him he watches too much CNN and should instead study the markets price and volume patterns. If you do that, days like today will not surprise you. Instead you will be ready for them and understand why they happen.

The constant negative news, terrorism, $70 oil, the Fed, Katrina, and just about anything else the media is droning on makes it appear the sky is falling. Nope. Despite all this terrible news, the SP600 is up 59% since the 2000 top?!?! Some terrible market. The SP500 on the other hand is down 18%. I find this incredible, considering my friends when asked how they think the market has done since 2000 think it is down 50% plus.

Follow the indexes, leading stocks, and sentiment numbers and you will not have to rely on the media to get your market advice. Then too someday you can release yourself from this constant negative tone that I hear and see everyday on TV.

All trends are up: Short term, Sub-Intermediate, Intermediate, and Long term

New Swing Longs: MINI HXM TDW NVR LAF PRAI ABIX CHB FCEL TXI MTZ RMIX ECOL TNB HAWK PYX MCY

Longs Outperforming Market: USLM APT SYNC CLHB IO ASTE ARD RES THE VAS HOS DGIN SIRF ENG SYNM SUPX

New Swing Shorts: ETR ACGL SMTC

Shorts Outperforming Market: CBRL

On The Radar Screen: FSTR DLA FADV CWBS GRVY GV TRCA WEL PLUG VSR PHEL TTES MPR REF

God Bless Everyone In N.O.and The Gulf States

There will be no commentary tonight, due to family and friends affected by flood.

New Swing Longs: HOS ANR WRES ESLR THE SYNM SPN IO NVDA MUSE HC UQM

Longs Outperforming Market: CPST MCEL MII ARD ASEI RES ENER RGEN FDG

New Swing Shorts: SGY HIT AHL MVK CONN

Shorts Outperforming Market: ANF STX CBRL

On the Radar Screen: HOM RTK CWG TESOF

Another Summer Day With Some Wind

The markets showed some nice resiliance by climbing the entire day after setting morning lows. Volume was mixed and not above the 50 dva so not too much to read into today.

There remains plenty of overhead resistance in the short term, along with an established sub-intermediate downtrend. The bounce today did help relieve short term oversold conditions based on the market oscillators. But the market is a bit confusing so not sure which way next direction is.

Natural disasters, crude oil, consumer debt, poor Michigan consumer numbers, housing bubble, and war. It feels like there is plenty of reason for the market to climb the proverbial wall-of-worry but the sentiment readings (AAII, bullish/bearish newsletters, and put/call ratio) are still at either high bullish levels or middle ground. So despite all the negative talk, it doesnt appear to be negative enough to establish much more than a short term bounce from these levels.

So we wait another day and see what tomorrow brings.

Sidenote: Ah Cramer! He is a little late with CPST isnt he? I gave you the reader that stock on 8/23. Guess what stock I sold a quarter of my position of AfterHours thanks to the "gamblers" bidding it up? If you guessed CPST you are right. Now collect your 50% gain in four days and send me a check.

New Swing Longs: IFSIA ASVI PAY FCFS FSTC CGPI

Longs Outperforming Market: CPST MSO SYNP SGDE USLM SPNC PETS LDSH PWR TWTC APT SMBI

New Swing Shorts: HIG MUR

On The Radar: ABIX TOFC FTG SPA DHIL

Aloha from Maui

CONGRATULATIONS EWA BEACH!!!! 2005 LLWS CHAMPIONS

GGGOOOOOOO HHHHHAAAAWWWWWAAAAAIIIIIII'''IIIIIIIII


WOW HOW AMAZING

CONGRATULATIONS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

EWA BEACH 2005 LLWS CHAMPIONS!!!!!!!!!!!!!!!!!!!!

50 Day Moving Average Failures; Light Volume

Even though volume was light a very negative developement occured today. The 50 dma of the Small Cap, Nasdaq, NYSE, and Dow have been recent resistance. The Dow already followed through failing to regain this line and now the rest of the indexes have failed at this line. The close on Friday in the indexes show a confirmed failure to regain the 50 dma and a bearish break of recent support. Their was a slight positive to today's down action. The volume did decrease from yesterday and is well below the 50 day volume average.

While there are still some good stocks out there the better charts are shorts and the market is still acting very poorly. Weak sentiment numbers and Alan Greenspan was the highlights today for the "reason" the markets went down.

I tell you what. I am not sure if anything could happen in the US economy to make people think it is a good economy. For one reason the newspapers and TV are not going to help. Something tells me that if we had a Democrat in the office this economy would be on the front page of every newspaper as "An expanding economy with low unemployment, and tame inflation." Even with oil this high. I am too young to remember, but I am sure if I do some analysis about the media and the economy during the Reagan years I would find the same thing: Constant Negative Headlines.

If you are staying disciplined this year by cutting losses, taking gains along the way, and keeping cash on hand you are probably at worst flat for the year. Which is better than the markets current return of -3% for the year.

Until Labor Day take it easy. You know the market will.

New Swing Longs: SMBI SYNP CTCH NOVA ININ

Longs Outperforming Market: CPST PRLS MSO

New Swing Shorts: CAJ BEV USTR HARB TRMB ENB KNSY STX CBG AACE

Shorts Outperforming Market: CHS WIND WCI HHS MSA FED NCTY

Stocks On The Radar Screen: CTTY PNRG USEY HBE CLDA DLA

Was The Market Open Today?

All I have to say is I hope it isn't going to be this slow next week. If it is, I am not sure how I can come up with anything new to say that I have not already said. It gets old saying the same thing over and over. What have I been saying? Read the last 20 blog post.

At least for a boring day, it was an up day with positive breadth. That is good. And we did not fall on higher oil. Another slight positive. But the most positive aspect about this market is that you can catch up on your sleep. If you can't beat them, join them. Take a nap with the market. It will probably be at the same close it was at today, on Monday.

Now, you want action? Look at the moves today in individual stocks. There is a lot of positive charts out there, even with this boring market. So if you want action, here it is.

New Swing Longs: AMK EME MSO RSYS PANC NEOL TWTC LF CPWR HOMS BRKR FSTF

Longs Outperforming Market: CWTR USLM PESI BMD ANX CRUS

New Swing Shorts: NLC MSA TOL ITRI FITB

Shorts Outperforming Market: NCTY

Distribution Day On Heavy Volume

Another intraday reversal for the indexes show, once again, how weak this market is. Markets reversed hard and volume really picked up as the indexes started their intraday freefall.

This gives the market another distribution day. If you have been reading my blog, you know that caution has been urged for a while now but today was proof positive this market is not done to the downside.

Oil and the Fed Reserve of NY issuing a letter about banks problems with derivatives were the "usual suspects" for why the market fell. No matter what the reason is, make sure you have a disciplined cut loss strategy in this negative news environment.



New Swing Longs: RFMD PSSI SBGI BNN CVTX PESI VCC

Longs Outperforming Market: CPST MCEL MII BCRX

New Swing Shorts: SFC GFIG XLV CBT CHCO NKTR PTR GPN CDE SONC EAT CBRL. The whole restaurant sector broke hard today.

Shorts Outperforming Market: WIND VSTA VRSN

Another Dull Day

The Nasdaq was lower on lower volume and the NYSE was lower on higher volume. Volume was skewed by Lucent's (LU) volume, so not sure you can call NYSE's higher volume a distribution day. No matter what though it was a boring day witht the indexes all changing .05% or less. News of existing home prices falling 2.6% didn't impact the market, because the homebuilders already priced the news in the past three weeks.

It is still hard to tell if this is base building or a possible intermediate downtrend trying to start in the indexes. So play it by year and be prepared for a move in any direction by having strict buy and sell rules.

The good news, besides the indexes being near their 50 day moving averages, is I am starting to find some nice chart patterns in individual stocks again. It doesnt mean a rip-roaring bull is coming back but it does support my bounce theory in the short-term.

Not much else to add today that you can't already read in my past 10 blog post. The indexes sure are not providing any fireworks to talk about.

New Swing Longs: BTUI BCRX IRN CPST COHU GERN MDRX ELX CDN

Longs Outperforming Market: BCON RMD ACR ANX CVO SYNC SUPX FLOW KOPN VAS BBSI

New Swing Shorts: FRO WIND BCF PBT BCR MAA VSTA PLCE

Shorts Outperforming Market: GKIS TTC

On The Radar Screen: PNRG OPTC IIN CTTY RNAI EGBN

Sleep Little Market, Sleep

Another wild and crazy day for the market! Not. Let's see, the past five days, the SP has changed a whole 2 points. And volume has been very low, under the 50 day volume average. I don't know about you but if that isnt boring basing I don't know what is.

We are at the 50 dma for the Nasdaq and today did show an increase in volume for that average. That could produce that bounce I was talking about. But if volume stays this dull on the bounce, I will have to think the bounce will rollover and a break of the 50dma could happen. But I can not predict the future so I will game it both ways.

The market was pretty dull, overall, except the intraday drop off in oil. But that market is so voaltile recently it could be at new highs tomorrow.

The real action came in smaller medical stocks. Eyetech (EYET) was bought by OSI Pharma (OSIP). Not a big deal. But the big deal for me was Panacos Pharma (PANC). Go read my weekend blog. As you can see, I had PANC ready to buy this morning or might have already takend a position in it. Unfortunately, I did the former and not the latter. PANC came up on my screens around 10-11am EST on Friday and I did not act on it at the time. Why? I did not completely fall in love with the daily chart at the time. Only after reviewing the daily at the end of the day did I fall in love with it. Well, when I woke up, the stock was up 55%. Did I kick myself for not buying it on Friday? Yes; just once. Why just once? Because the chart did not look right at the time it came up on my scan, I played my game plan correctly. I risked a nasty reversal that could have really hurt me. You cant predict the future and I had no clue it was going to be up 55% in the morning. So I did everything correct. The chart only looked perfect after the close, after it rose another .06 late in the day to create a very nice chart pattern. So I did everything right. Never get upset about missing the big one. You are going to miss a lot.

New Swing Longs: LDSH ORBK CRUS

Longs Outperforming Market: BCON KNDL DGIN ADST SBTV ACR

New Swing Shorts: PP IPG KSWS

Stock On The Radar Screen: ALO PANC MVCO IRSN PESI KTCC

Aloha from Mauifornia! LOL

End Of August Summer Time Boredom

The stock market averages were basically unchanged today, with some up .1% and some down .1%. Volume came in near the lowest of the year, as we enter the summer. This is your typical summer time August lull until Labor Day.

It appears the sellers took a break and buyers are sitting on the sidelines waiting for one side or the other to take control. In the meantime, however, the markets did reverse intraday today, again. This is like the 3rd of 4th time in the past week this has happened. This is bearish and not bullish. Today's blame is on MRK as the poor drug company was ordered to pay a huge settlement in court on Friday. MRK is appealing the decision. The intraday reversal in the broad index after this ruling indicates sellers are in control of this market, as bad news is bad and good news is not good.

The markets are near their 50 day moving averages. So a bounce is very possible. Price and volume action, however, will let us know which way the market wants to move from this very important support level. If prices rebound on decent volume: Alright. If price breaks down on an increase in volume: Uh Oh. Either way be prepared and have a game plan for both scenarios.

New Swing Longs: CCK EXAR PANC ADSK MII SYNC

Longs Outperforming Market: VRTX NRPH PTG

New Swing Shorts: PPH STJ HRB CHS SCSC MRK PDCO

Shorts Outperforming Market: HIBB

Opportunity Missed: REDF. Had to cut loss, due to rules.

Leadership Changing

The stock market indexes churned today on lower volume. Which is a welcome sign considering all the recent distribution days we have had. However, todays action was still quite negative all around.

There was poor breadth, low volume, and an obvious rotation of money into defensive sectors. Did you see the Consumers, Food, and Tobacco stocks today? I did and the obvious standout to me was MO.

Altria (MO) broke out of a beautiful long term base and Reynolds (RAI) did too. Along with that all the other defensive stocks are setting up in very nice bases. This could give us yet another sign that the current uptrend is in fact over.

This bounce is weak and if it continues it will only provide some protection from all the ugly and sloppy chart patterns on the daily and weekly charts. Most of the old leaders charts are broken and the rotation is obviously into defensive stocks.

Short-term and sub-intermediate trends remain down, the long-term and intermediate remain up.

Keep tight cut losses and new purchases into "dip" stocks very small.

New Swing Longs: MO CHRS CVO

Longs Outperforming Market: RGEN MNTA ASEI ADST

New Swing Shorts: FTD TSA SEE CBT BBG TTC LGBT BKS WMGI

Shorts Outperforming Market: CNTF LEND

Under The Radar Screen: CTTY SYNC GSX SNG OPTC BL

Aloha from Maui

End-Of-Day Reversal Indicates Distribution; Not Accumulation

If the Nasdaq and Dow were up, how could it be distribution? It is distribution cause the markets ran up, topped out, and near the end of the session closed below the intraday support levels. That in itself might not indicate pure selling. The tell then was the volume. Volume picked up over yesterday. Since it initially should look like accumulation, you have to then look at the intraday tape action. And all the indexes closed in the lower half of their daily trading range. Coming off of all the recent distribution days, this is called churning. Churning is when the markets go nowhere intraday on high volume, after suffering some pure distribution days. This now gives the current market four distribution days in six sessions. This should be all you need to know about current market conditions. We are about to hit bear mode for a little while.

More charts blew up today: PLAB and TALX. This along with all the other blow-up stocks I have mentioned should help solidify your conviction to raise cash, keep longs small, and if you are experienced look for some shorts.

Oil fell 2.80 and people were talking about why the market didnt go up. Hello, the market has been rallying thanks to retail, home builders, and OIL stocks. The oil stocks have been your market leaders. When the market leaders crack -- like oil stocks are doing now -- the market follows. So when oil falls, the market will fall. Just like it rose the past 3 years with rising oil prices.

Markets are not bullish right now, no matter how much you want them to be. Be careful out there.

New Swing Longs: VAS MNTA RGEN SUPX ADST ECOL

Longs Outperforming Market: AIX AEIS LOJN KNDL

New Swing Shorts: KMP SMTC TK HURC

Shorts Outperforming Market: PTC EENC CNTF OMM

Aloha from Maui!

Market Finally Cracks; No Surprise Here.

The stock market finally cracked today, on an increase in volume. Indexes fell anywhere from 1.5% to 1.1% with volume rising as the market fell. This is the third distribution day in the last five sessions for the Nasdaq. That is not a bullish situation for anyone looking to purchase new longs, since 3 out of 4 stocks follow the general trend of the market.

What is the good news: The SP600 and Nasdaq are very close to their 50 day moving averages. This would be an ideal place for a bounce. If the bounce comes on lower volume it may not hold and if the indexes break through the 50 day moving average the next support is the 200 day moving average. So a short term bottom may be near. However, a lot of bulls (newsletter survery, AAII poll, and the sheep in #daytraders, #activetrader), ugly charts (DELL, CSCO), topping charts (BCON), and distribution days in the indexes indicate a bounce may not hold.

The next best thing would be a long sideways consolidation lasting a couple of months that breaks out to the upside. That would create tons of beautiful bases in stock charts. Chances of that are low, I would assume, now that oil finally matters.

I would be careful here, if you are buying stocks. The market is not presenting a lot of great charts to buy and stocks like DKS are a dime a dozen the past week. Keep cash high and wait for this downtrend to run itself out.

New Swing Longs: MRY

Swing Longs Outperforming Market: BCON ANX DCEL NR

New Swing Shorts: TWI TJX CATY JCP ANF HIBB EENC BEBE

Swing Shorts Outperforming Market: CKCM AEOS

Under The Radar: ADST TVIA ROS ELT

Very Low Volume Rally

It is difficult to make much out of a day like today. But since that is what I do, I will. The market ended the day higher after spending the early hours underwater. Volume came into the market as it rallied but it was still well below the 50 day volume average. This indicates there was not a lot of enthusiastic buying by larger funds. We will see in the coming days which way the market wants to go.

If you need to read anymore into the markets current condition, read the past five post in the blog. Also remember to keep some cash on hand, while you buy and sell some stocks.

New Swing Longs: MSTR JTX WRES SKX DCGN AEIS

Longs Outperforming Market (up 5% or more): BCON ASEI PRLS SBTV GNSS CUTR TAGS BMD RCCC FLSH

New Swing Shorts: PL CME VLCCF

Helpful reminder: ALWAYS CUT YOUR LOSS, NO MATTER WHAT, WITH A CLOSE BELOW THE OPEN OF THE BREAKOUT DAY. SO BASICALLY IF YOU BUY A STOCK TODAY AND TOMORROW IT REVERSES AND CLOSES BELOW THE OPEN OF THE BUY DAY, YOU MUST SELL NO QUESTIONS ASKED.

Under the Radar Screen: AOB IIN API AEZ

Aloha from Maui

Gap Down, Stay Down

DELL's earnings Thursday night caused the breakdown on the indexes Friday, dropping the Nasdaq by as much as 1.5% intraday. Volume rose on the nasdaq, albeit less than 5%, and dipped on the NYSE. This gave the Nasdaq its third distribution day in past four weeks. While the distribution days have not been climatic selloffs, they are selling stocks none-the-less.

More stocks became casualites in the blow-up category (ie, IPII) and few charts are presenting good buy opportunities. It remains time to keep cash heavy and wait the market out till it decides to make up its mind.

Without a doubt, oil is being linked as the cause for this. I will tell you this, if the market looks ahead by six months, the market is telling us oil at $80 is coming. If the current price action has to deal with the "current" move in oil, then history has folded its hand on its past historical guidance of oil prices and market movements. Which does not surprise me, since there have been so many crazy things that have bucked recent history. Interest Rates not rising on the long end while Greenspan hiked rates is the first to come to mind. But that was due to low inflation--without food, lodging, and oil. Wonder what inflation is going to look like 6 months from now?

The markets are still in a downtrend on the short-term and sub-intermediate trends and up on the long-term and intermediate trends. However, a few more days of distribution, to go along with all of my ugly charts will confirm that we could soon be in for an intermediate correction.

One other item of interest: I did not report Thursday night something that caught my attention. The Investors Intelligent Survey of Newsletter writers shows 59% Bulls and 19% Bears. These two numbers are at extremes and to see people get more bullish the past week as prices drop confirms that there is too much bullishness out there and not enough fear.

If you go back to the April/May bottom and read my blog comments you will see that I saw this pattern IN REVERSE. So while everyone stays bullish at these levels, I remain extremely cautious. Better to be safe and alive, than sorry and broke.

New Swing Longs: BE CAREFUL WITH NEW BREAKOUTS: MDG AAPL NVDA

Longs Outperforming Market: RCCC ASEI CPTV SVR NFLX WHR

New Swing Shorts: CNTF CTHR WPSC CKCM LB TRMM FMD CREE

Small Stocks To Watch: INT WEX ITWO JAMS TAGS CVV OPTC

Market Rebounds On Lighter Volume

Stocks reversed today, across the board, unfortunately volume fell with it. That is the opposite of what you want to see. Yesterday volume rose, markets fell; today volume fell, markets rose. The market was very volatile today going higher, lower, then making a push higher. All of this recent action in the indexes, along with all of the individual stocks BLOWING UP resolves my faith that staying heavy cash is the correct play right now.

Charts have turned choppy, ugly, and down right negative during the past two weeks and today they did not get any better. With fundamentals being the best we have seen in corporate history it reminds me of a history lesson: Technicals and Fundamentals tell you when it is time to buy, Technicals ONLY tell you when it is time to sell. Why? The fundamentals and story is always the best AT the top. Only in hindsight will you know that the earnings were going to top then.

New Swing Longs: CVCO ASEI EPAY ACR KNOT

Also a lot of individual gold charts look great here. Some are a buy now some need pullbacks or more time basing: RGLD GG GLG LIHRY ASA CDE EGO NTO VGZ AUY MNG ASA KGC SLW JRCC GOLD. Keep an eye on the Gold sector; it looks primed and ready to go on a move.

Longs Outperforming Market: BCON INFA PRLS ANX

New Swing Shorts: NAHC EAT VLI RARE TNE

On The Radar Screen: INT WEX

Disaster DeJours past two days: MED DATA. Nothing I could do about DATA, I took my 16% loss from my 7/15 buy. Another reminder why I diversify so much in my accounts with many great looking charts. MED on the other hand shows the importance of cutting all of your loss when the stock closes below the open of the day of the breakout. By cutting my loss by the close after the nasty intraday reversal I took a loss--almost 9% but remember this is on a small portion of my account and risk/reward was there 4/1--but saved myself a total gutting by losing 35% or more on the trade.

Not too many people will talk about their mistakes in the market. I do because I think it is a very healthy and important thing to review BIG mistakes, instead of just talking about all of your BCONs.

The stock market is like poker. Everyone thinks it is easy to enter the WSOP and win 7.5 million dollars. But if you are like me, you will enter over 500-1000 tournaments just to make one final table. What does that have to do with the market? A lot. The psychological strength it takes to continue to battle on has to be enormous to deal with all the bad beats. The same thing applies to the stock market. It takes a lot of time and hard work to consistently make money. Anybody that thought the market was easy and started to buy stocks the past week now understands how complicated and rough the going can be. There are going to be a lot of bad beats in the market but if you are confident and continue to play and study the market you will too make that final table and grab a piece of that 7.5 million dollars.

That doesnt say much about my poker game, btw, losing so many tourneys but if you ever want to meet me in Vegas and go Heads-up or play a ring-game I welcome the challenge. :-) j

ALOHA from Maui

Nasty Intraday Reversals On Huge Increase In Volume

The stock market started off strong and looked to be going higher until around 1PM or so. After that, it was straight down. Volume increased sharply across the board. Marking a nasty distribution day for the Nasdaq and terrible reversals for the other indexes. Even though the NYSE and SP600 were up for the day, the intraday reversal on a big increase in volume might as well mark these as distribution days also.

These kind of intraday reversals can cause major psychological damage in the short term. Therefore, I would sit this market out if you are a new investor or cut your long exposure a lot if still very long. The best thing to do when the market gets like this is to just keep a heavy level of cash or be one heck of a stock picker.

Nothing says that we can not all of a sudden reverse upwards and start this uptrend all over again. But for two weeks now I have commenting on all the bad charts, blowups, lower New Highs on the 52-week high list, bad breadth, and how there is just way too much bullishness out there. Well, it finally hit the whole market today. Now is the time for those perma-bears to now step out of the closet and say I told you so. Yeah, you did... in April and missed out on over 50 stocks that made 100%+ moves since then. Way to go, perma-bears!! :-)

Why did the market reverse? I am sure you think it was oil. No? How about earnings season being almost over. Dont like that? Uhm....summer vacations?? Well, whatever you think the reason was, sadly it was not. The market looks ahead three to six months in advance. The oil, earnings, vacations, or whatever it the reason is not the real reason. We sold off today because some BIG funds do not see value in holding stocks at this juncture. There were more sellers than buyers; bottom line. We can blame oil all we want but on a GDP level we do not consume as much as we used to. Oil is simple the effect not the cause of this market. If oil was $50 today, CNBC would have given you something else to believe. Thanks CNBC!

With the markets up 100%+ since the October 2002 bottom some short term profit taking makes sense. We shall see if we will be up 125%, 100%, or 75% from Oct 2002 bottom, by the end of the year.

Sub-Intermediate trends in all indexes is now down, along with the short-term trends.

Short Term: Down
Sub-Int: Down
Inter: Up
Long Term: Up

New Swing Longs: LMIA RCCC CKH ARS

Longs Outperforming Market: GMXR ASR ELTK TEC USLM

New Swing Shorts (by as close to pivot as possible; NO CHASING): HDL RGS USMO DSL HANS CSCO LGF SNDA CYD. Take a starter position. Then monitor for additional entry or a cut loss.

Shorts Outperforming Market: SNHY

Tiny Longs Worth Watching: MDII MANA GEAC MSON

ALOHA FROM MAUI

Fed Raises Rates Again

For the 10th consecutive time, the Fed has raised rates a quarter of a point. The Fed continues to fight inflation with its gradual steady increases in interest rates. It looks as if there are another two more hikes in store, at least. Best case scenario is seven more hikes from the Fed.

Where do I get that number? Why from Mr. Richard Yamarone of Argus Research Corp. He believes it will be at 5.25% before the Fed declares the fight against inflation is over. That would be great for stocks, if that is the case. Since 1994, everytime the Fed hikes rates the market moves higher and visa versa when the Fed is easing.

The stock market bounced on an increase in volume; not a big bounce, however, and not on a big pickup in volume either. But an increase in volume on a bounce, after a lower volume decline is positive action if we want the market to start to go higher again.

Besides that, stocks were pretty boring today. Small caps lagged again and Big Caps lead. I know it is a common statement but "it remains a market of stocks." There are great stocks out there but not a lot. We shall see what tomorrow brings.

New Swing Longs: UBET WIRE PRM RCOM TFR BTUI SLXP

Longs Outperforming Market (up 5% or more): SYKE OLGR BBD USLM TEC MCF

New Swing Shorts: SNHY PCLN CNO L

Shorts Outperforming Market (down 5% or more): CRYP INPC

ALOHA

Waiting For The FOMC Interest Rate Decision

Nothing has changed today, from Friday. The indexes dropped and volume rolled in lower across the board. Just what you like to see in a normal pullback in an uptrending market.

The first logical support for all the indexes is the 50 day moving average. Since this drop is coming on lighter volume, a nice bounce off that line with a pickup in trade should help give hope that the rally can continue. However, a failure of that average on volume will concur what the recent drops in the leaders (Homebuilders, REITS) have already given--a sell signal. And to be quite honest all of the REITS on daily charts look like short-term crashes. These moves in the past two days, in every stock in the REIT group, are extremely violent to the downside and on heavy volume. Housing slowdown finally??

There is not much more to add to the commentary today. The market drifted lower on light volume, waiting to hear what Mr. Greenspan has to say about inflation, rates, and the economy.

New Swing Longs: MED VC SGRP

Longs Outperforming Market (up 5% or more): BCON!!! MCEL TEC GBND OLGR CPTV ELTK CERS ENTU

New Swing Shorts: SHO ZIPR WCI BMHC and the whole REIT group on low volume bounces to recent breakdowns. Nasty ugly charts everywhere in the REIT group.

Shorts Outperforming Market: INPC ZGEN

ALOHA

Indexes Now in Short-Term Downtrend

Friday confirmed that the recent topping action in individual stocks is signaling for a move down; the SP600 with its 3.8% move lower leads the list. There was negative breadth, all around, and well over 90% of the Industry groups I track were down for the day. That is a poor number.

This could provide a reason for a short-term bounce in the next couple of days. But with all short-term trends being down after such a big run-up from April, more downside action would be welcomed to shake out the new, late longs and create new bases for stocks to breakout of. Another sign of more downside is all the poor looking charts the recent great stocks have turned into. With that too, I am getting a lot more shorts coming up with better risk/reward potential than I have with my longs.

A positive sign that the downtrend might be contained would come in the form of lower volume on the way down. So far, so good, as volume did come in lighter yesterday, for the Nasdaq and NYSE. It seemed as if funds did not dump en mass, and instead focused their selling on the hottest of hot sectors: Homebuilders, Retail, and REITs. The good news is fresh breakouts from first stage bases work well, while breakouts from eratic, sloppy, and late stage chart patterns continue to disappoint after this big run-up from April.

Also one other point: BIDU!!! what is this? 1999-2000. I need more facts before I declare this to be in the bubble category. But it sure does look speculative. YIKES! Stay away, for now, unless you have "inside" information. Which I doubt most of you have.

New Swing Longs: LTON PTG OLGR GBND REDF VSAT TMNG VSAT ASGN DVD. Most of these are very speculative. So keep a good eye on them. Why? Read below.

Longs Outperforming Market (up 5% or more): BCON!!! NRPH CPTV

New Swing Shorts: GKIS TSM GFIG CRYP INPC QSFT ZGEN FHR PSA JOE MAA CQB RWT WPO. Most of the stocks mentioned are REITS. I will not short these boring stocks, but if you do short them it should provide some short term gains.

Disaster Du Joirs of the Week: SCVL PWEI. This is why you watch stocks closely. Even though both BLEW UP, I only got hit with a 4% and a 15% loss respectively. Both dropped over 25% from their highs, but by buying right I ended up with some small bruises and nothing more. They were nice when purchased, now they are trash being taken out. Another great example of why you should never load the boat with smaller less attractive fundamental issues. Cheap stocks always stink, unless they are going up. Cheap stocks are cheap for a reason; they cost what they are worth.

ALOHA and have a great weekend!

Market starts pullback

The pullback I have eluded to may have finally started--It is about time. With the retailers leading the way down, poor breadth, and closing near the lows of the day the indexes looked really weak today. But, all in all, it wasnt that bad of a day. Volume was lower today than yesterday, on the Nasdaq, NYSE, and Dow. However, volume on the SP600 grew as the index lost 1.4%. That is its first distirbution day this month. As the leading index in this rally, it will be important to watch if more of these days pop up to signal if a correction is coming for the index or just a normal pullback.

All trends remain up, since the October 2002 bottom, except the Dow Jones short-term trend which today turned latreal.

New Swing Longs: KOPN SJR ENY CMX NWRE

Longs Outperforming Market: CENT BOOM TRGL

New Swing Shorts:

Slow Market Day

Though it seemed slow, which it was overall, the Nasdaq still traded more shares than yesterday. You could have fooled me, though. Anyways, the markets did not do much today, barely moving .10% up or down. The action in individual stocks however was different today than yesterday. I had to sell down my nicest charts from the rally today and have reduced more positions today that have ran up too much short term.

Small oils were weak today and Gold was strong. Could that mean, with gold rising, that we are going to have inflation? I would think it would start showing up in the data soon, seeing the short and long term bond yields finally start rising. But I am not sure if we are going to get a lot of inflation. At least not the kind seen during the Carter administration. Also, I would think this inflation would cause the Fed to keep hiking rates and that can only be good for stocks. Why? Because, history has shown, since 1993, every time the fed hikes rates stocks rise and when they reduce rates stocks fall. Why? Because the market does the opposite of what you think it is supposed to do.

However, currently, the market is giving poor risk/reward ratio for new positions. Charts are getting sloppy, stocks are slipping a little, and some stocks are going parabolic. This is leaving few stocks at safe buy points. A pullback in the markets would help create good bases for the next round of leaders to break out of. If we will get one, the way this market is acting, I dont know. However, if you must go long now, keep a tight cut loss and dont "load the boat."

New Swing Longs: RGLD ABX ECIL ECTX ANSS ORA

Longs Outperforming Market (up 5% or more): NTES ANX ENG BMD TGE ELOS CTRX GOLD

New Swing Shorts: FRP NLC VNUS WMI PXD

Aloha!

SP600, SP400, RUSSELL Close at HOD

The indexes above closed at the HOD and the NYSE, Nasdaq, and SP500 came very close. Volume increased across the board, a positive sign in an uptrending market. Energy, Metals, Gold, Insurance, and select Medicals were the positive movers today, along with big cap tech. Overall it was a very strong day and there is not a lot of negatives. Unless, you include the small blow ups today (TYC, CNXS, CUTR, etc...) in individual stocks.

Which brings me to my next point. I am seeing some charts getting too extended from their original breakout, along with more minor blowups, than I saw at the beginning of the rally. This makes me cautious on much further upside momentum; but, hey, have I not been saying this for three weeks or so.

No matter, however, you have to go with the trend and the trend is very up. So much up, in fact, that the SP600 and Nasdaq are both up over 100% since the October 2002 bottom. As long as I have charts moving up on strong volume, coming out of sound bases, I will remain bullish. Even though it feels like a pullback is needed.

All trends remain up, since 2002.

New Swing Longs: CPN GOLD NATR GRS GSX ESMC

Swing Longs Outperforming Market (up over 5%): ENG VLFG PWEI TLF BMD CWTR COGT PANL BCON MCEL AMED

New Swing Shorts: IWA MGAM MAS

Aloha!

Low Volume Continues

There, once again, is not much too add to this market after today's session. Biotech, small cap and large cap oil led todays market action with some nice gains. The techs and retails were weak today. Markets remain the same with all trends being up since 2002.

Lots of people keep calling for the markets demise but it is hard to stop momentum no matter how hard you try to talk it down. I am a bit nervous with the amount of small stocks moving higher but I have to remember same thing happened in 2003. Also more stocks trade on the exchanges today than they did 5,10, or 100 years ago.

All trends remain up for all the indexes and until something changes I have to remain bullish. When momentum stalls and we start getting some distribution days on the index then I might listen to the bears case a little harder. But, for now, oil at 62, interest rates, China, terrorism, or whatever it is the bears are worried about does not matter to this market. Therefore, I will continue to ride the trend till the trend reverses and let other people try to predict where we will be a week from now.

New Swing Longs: PWEI TLF BNT SCO ELOS ATLS COGT MNST MCEL VITA LNG ELT PPX

Swing Longs Outperforming Market: XWG BCON GEOI WEL ARD TMY PETS BOOM TALX CTGI SGDE CPTV CUTR CFK ANX NICE IDIX OPMR WVCM TEC VLFG

New Swing Shorts: HRAY VIAC


ALOHA!