The major stock market indexes finished near or at their LOD's (low of days) for the session, with volume well above the 50 day average level. The Dow, SP600, Nasdaq, and SP400 all closed below their August lows, giving the indexes a confirmed failure of the 9/6 follow-through. Volume slowed a little on the Nasdaq and rose on the NYSE. This gives the SP500 its third distribution day since 9/6. The SP600 scored its fourth distribution day since 9/6, leading the way down. All major indexes trends are down and most have now broken the August support and trendline connecting the bottom price range since the Arpil/May rally.
Until Hurricane Rita passes the Gulf Coast, this market is held hostage by the possible damage that it will create. It is going to be a very long two days, until it makes landfall, for the stock market. The media is sure to make it feel longer.
Hopefully all the negative news stories out there will lead to a small relief rally, if the worst does not happen from Hurricane Rita. A rally seems reasonable, considering the oversold conditions some stocks have. But just because stocks are oversold doesnt mean they cant get more oversold. Normally when you move down fast like this, a relief rally only relieves some of the downside pressure before heading lower again. Have a method ready for covering some shorts, incase there is a big relief rally or hopefully you are already in cash and are ready to put money to work when this downtrend ends.
In the meantime, there are too many negatives out there to be a hero and buy the indexes. A hawkish Fed, slow growing economy, oil, hurricanes, October, poor consumer confidence, and home prices easing give the edge to the bears for now. As long as the media continues to act like the end of the world is near, you can be sure capitulation will happen eventually. This will help create a real bottom and give us something to really rally off of. When this happens who knows? Until then there is too many ugly charts out there and shorts are working well, so stay cautious.
New Swing Longs: TUG BNI BXC GEPT MTRX SONS SBS MGN ROYL VTO DBLE
Swing Longs Outperforming Market: FLDR RIO ARD HOS FUEL SNG ABIX MNG DESC CHB SPN VGZ ZIGO ECLG SYNC TMM ECTX ININ
New Swing Shorts: CNXS RRGB NYT AFFX PTP AXS CY VFC BLC FCH TSA RPM ANN NXL KNX CRE CNF PP HCC ABCW BXP BRKB RUTH ALLI RUTX LAZ SFC. You better be able to find something to short in this group. They are all broken and should cruise down.
Swing Shorts Outperforming Market: NLC CTRN LNY IPCR HIBB SONC CENT APPB JOE SNS JCP PCLN ANF SPF SHW CAKE TMA ETR SPG BYD ALL FED RYL TRI JWN PPG MNI CTX PGL HMA NWS LVS EMAG
On The Radar Screen: QVDX MSL
All those shorts I have been holding have finally paid off. I finally can sleep REALLY REALLY well tonight. I am not going to lie, the past two weeks have been hairy for me. Now I can start to relax and trim some shorts that have paid off.
I hope everyone is positioned and ready for the worst. When this downtrend is over, the negativity should be so thick that the new longs should provide wonderful gains. Stay vigilant and positive amongst the negativity that the media surrounds us with everyday.
Aloha.
2 comments:
Aloha,
Your statement -- "I am not going to lie, the past two weeks have been hairy for me. Now I can start to relax and trim some shorts that have paid off." -- is confusing me.
Based on your writings, I was under the impression that you are making a big killing on short side as well. I look at your shorts everyday and they are going down by very good numbers. What caused to have sleepless nights when you are already making money? Can you elaborate on your statements?
Marvelous job for the daily commentary. I have one suggestion: I live on East Coast. Can you post your comments by 10pm EST?
BTW, google released they blog search engine and when I did search for "stock picks", your link was on **TOP**. I am happy to see your link for the great service you are doing at no cost.
-Anonymous
I do great on longs and shorts, yes. But you do not see how many I have to cut everyday also.
Remember, I only list the stocks that move up the most. I dont list all the stocks I am selling for cut losses. The past two weeks have been crazy volatile for me. What makes it worse is that I am running money for someone elses account and in a month it has gone nowhere but flat. Which is better than the market but not as good as my personal account. That makes me uneasy.
I wish I could post comment everyday before 10pm EST. But until this is a paid service and I get paid for this excellent service, I write at my own leisure.
When there is big surf, you can be sure I wont be posting much commentary. And if I have a lot of poker tournaments scheduled on a particular day I wont be posting much also. Besides that I post everyday before the opening bell.
For a FREE service that is a great deal!!!!!
If and/or when this becomes a newsletter or I can get paid for my service I will be sure to have everything done before 8pm EST.
Until then my girlfriend, poker, surf, and did I mention poker comes first.
I want to thank you for all the wonderful comments you have left. Please be sure to show this site to all of your investing/trading friends. I really would like to have a large readership one day when I am older. :-)
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