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
Monday, October 31, 2005
Saturday, October 29, 2005
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
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
Thursday, October 27, 2005
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
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
Wednesday, October 26, 2005
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
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
Tuesday, October 25, 2005
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
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
Monday, October 24, 2005
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.
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.
Saturday, October 22, 2005
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! ! ! !
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! ! ! !
Thursday, October 20, 2005
Market Reverses But Holds Above Yesterday's Low
The market definitely did not act the way I figured it would after yesterdays reversal. This is either a great way to wash out bears and bulls, or the market is one confused son-0f-a-gun. However we are still holding on above the lows of yesterday. So we have not killed this rally attempt yet.
The two failed bounces at support has held up and that is what is needed to create a decent bottom, if we are in fact building one. The one thing, for sure, is that this creates a higher level of bearishness with the wild volatility. This allows the weak holders to sell into the smart money hands and sets a stage for a possible rally.
But with all this possible bottom talk, we have to remember, that the averages are still trading below their key 50 and 200 day moving averages. Along with that, the trend of the 50 dma is down. This adds more pressure to the resistance, as time goes by and price declines. I can not believe I did not mention yesterday that the markets may not rally because of the fact the 50 dma is trending down and the indexes are all trading below this key average.
So it is up in the air. Up or down. I dont know but up is my guess with the reversal we had yesterday. I am not finding a lot of new longs but I think this is because their is an obvious sector rotation happening out there. The top 40 industries in IBD Industry Groups that have moved up the most the past 3 months is a great place to look for the next leading industry.
I left a ton of money on the table today, by covering my shorts in the morning. I could kill myself because as you saw today oil stocks fell quite nicely. I had enough oil shorts along with other shorts that fell over 5% today to make the month quite a nice month. Instead I might end the month with a loss.
Oh well that is trading. I have to keep to my style, because you never know when the market will take off. If I take the week off, I might miss on the "great longs" that come up on my scans. I might miss the next TASR(2003) or LMLP(1999) on the long side. Or miss the next ENGA (2000) or any Airlines (2002) on the short side. That is the kind of money that can make being a trader very rewarding.
Good luck out there!!! We need all the luck we can get.
New Swing Longs: PAYX VDSI ISIL HAR UB
Longs Outperforming Market: NUHC LDSH KNOT BRLC AAPL SUPX THRX
New Swing Shorts: PLCM TLM ECA EPEX BGG PVX BAK USTR RESP SID KCS BTU STLD XRX UTEK NUE CAL
Shorts Outperforming Market: Sadly - None. I covered my new shorts too early and missed out on a LOT of gains. Did you see oil stocks today??
The two failed bounces at support has held up and that is what is needed to create a decent bottom, if we are in fact building one. The one thing, for sure, is that this creates a higher level of bearishness with the wild volatility. This allows the weak holders to sell into the smart money hands and sets a stage for a possible rally.
But with all this possible bottom talk, we have to remember, that the averages are still trading below their key 50 and 200 day moving averages. Along with that, the trend of the 50 dma is down. This adds more pressure to the resistance, as time goes by and price declines. I can not believe I did not mention yesterday that the markets may not rally because of the fact the 50 dma is trending down and the indexes are all trading below this key average.
So it is up in the air. Up or down. I dont know but up is my guess with the reversal we had yesterday. I am not finding a lot of new longs but I think this is because their is an obvious sector rotation happening out there. The top 40 industries in IBD Industry Groups that have moved up the most the past 3 months is a great place to look for the next leading industry.
I left a ton of money on the table today, by covering my shorts in the morning. I could kill myself because as you saw today oil stocks fell quite nicely. I had enough oil shorts along with other shorts that fell over 5% today to make the month quite a nice month. Instead I might end the month with a loss.
Oh well that is trading. I have to keep to my style, because you never know when the market will take off. If I take the week off, I might miss on the "great longs" that come up on my scans. I might miss the next TASR(2003) or LMLP(1999) on the long side. Or miss the next ENGA (2000) or any Airlines (2002) on the short side. That is the kind of money that can make being a trader very rewarding.
Good luck out there!!! We need all the luck we can get.
New Swing Longs: PAYX VDSI ISIL HAR UB
Longs Outperforming Market: NUHC LDSH KNOT BRLC AAPL SUPX THRX
New Swing Shorts: PLCM TLM ECA EPEX BGG PVX BAK USTR RESP SID KCS BTU STLD XRX UTEK NUE CAL
Shorts Outperforming Market: Sadly - None. I covered my new shorts too early and missed out on a LOT of gains. Did you see oil stocks today??
Wednesday, October 19, 2005
Stock Indexes Give A Follow-Through Day On Huge Volume; Cover ALL Shorts
The very emotional and weak open with at one point 3 to 1 negative breadth gradually improved to give us a very volatile day that ended up being a "key reversal" day. The markets ended up 1.3% to 2% today on volume that was 25% higher than the day before. Adding to that, all indexes closed at their HOD (high of day). This follow-through comes on the 5th day of the most recent rally attempt started Oct. 13th. Also, remember, the count of distribution days have been reset with this follow-through. So all those distribution days the past two months are now erased and we are back to zero distribution days.
The talk of the dead-cat bounce being dead after yesterday's distribution day and the new lows in the morning opened up the flood doors of crash callers and blatent panic selling by bulls that thought the "bounce" was officially killed. This in turn caught the short sellers extending themselves too far and caught bulls selling their stock they just bought two days ago. By cleaning out the weak bulls and creating too much confidence in the bears this morning we were able to put in a bottom.
After the small yet none-the-less distribution day of yesterday it appeared the market was going to rollover and make new lows. But just like during the April/May bottom, a minor distribution day was needed to bring out excess pessimism that led to a nice rally. I am not sure how much rally we are going to have but the tepid selling of yesterday being met with the huge rush of big buyers today leads me to believe that we should be able to get some good gains from this.
This follow-through does not guarantee that more gains are for sure to come but no rally has ever started without one. This lifelong poker player will take those "bull" odds anyday of the week.
I covered every single one of my shorts today, taking losses on the most recent small buys and taking long-term gains in all homebuilders and any other stock showing long-term gains.
New Swing Longs: JCOM RLI FCN IMN WES BRLI EFII NUHC
Longs Outperforming Market: BRLC SMTS PPDI ADST LWSN TEVA PRLS OXGN CAMP FLO TAYC FAST PBCT
New Swing Shorts: NONE
Shorts Outperforming Market: There was one outperforming-ZMH. But do you know how many I recently took that I had to cover for a loss? Way more than you would want to know.
The talk of the dead-cat bounce being dead after yesterday's distribution day and the new lows in the morning opened up the flood doors of crash callers and blatent panic selling by bulls that thought the "bounce" was officially killed. This in turn caught the short sellers extending themselves too far and caught bulls selling their stock they just bought two days ago. By cleaning out the weak bulls and creating too much confidence in the bears this morning we were able to put in a bottom.
After the small yet none-the-less distribution day of yesterday it appeared the market was going to rollover and make new lows. But just like during the April/May bottom, a minor distribution day was needed to bring out excess pessimism that led to a nice rally. I am not sure how much rally we are going to have but the tepid selling of yesterday being met with the huge rush of big buyers today leads me to believe that we should be able to get some good gains from this.
This follow-through does not guarantee that more gains are for sure to come but no rally has ever started without one. This lifelong poker player will take those "bull" odds anyday of the week.
I covered every single one of my shorts today, taking losses on the most recent small buys and taking long-term gains in all homebuilders and any other stock showing long-term gains.
New Swing Longs: JCOM RLI FCN IMN WES BRLI EFII NUHC
Longs Outperforming Market: BRLC SMTS PPDI ADST LWSN TEVA PRLS OXGN CAMP FLO TAYC FAST PBCT
New Swing Shorts: NONE
Shorts Outperforming Market: There was one outperforming-ZMH. But do you know how many I recently took that I had to cover for a loss? Way more than you would want to know.
Tuesday, October 18, 2005
Another Obvious Day Of Distribution For The Indexes
Another ugly distribution day hit all the major market indexes. This reversal with such negative breadth does not suggest the recent lows of the recent rally will hold.
More and more charts are breaking down, and now the oils are joining the retail, REIT, real estate, and tech stocks going lower. I am sure a sector rotation will seem obvious soon enough. I do see a lot of nice action in certain medical stocks. I am not sure how bullish that is. My guess is not very.
I dont like the way this market looks and until there is downright capitulation -- put/call ratio 1.2, bullish/bearish newsletter # cross, and a high VIX -- I will bide my time with tiny buys and tiny shorts and keep my cash nice and cozy for better oportunities to ride the wave up.
Good luck out there.
New Swing Longs: BBBB PPDI STJ PBCT
Longs Outperforming Market: LDSH CRED HOM ADST
New Swing Shorts (choose wisely): TRW LSS OMM OXY THO XOM ICUI SLB HYDL APC PPP DSL TRZ DRH
Shorts Outperforming Market: PQE NVR WLS PHM LEN IPCR NAV NJR ALB VCG MAS DUK CNSL
More and more charts are breaking down, and now the oils are joining the retail, REIT, real estate, and tech stocks going lower. I am sure a sector rotation will seem obvious soon enough. I do see a lot of nice action in certain medical stocks. I am not sure how bullish that is. My guess is not very.
I dont like the way this market looks and until there is downright capitulation -- put/call ratio 1.2, bullish/bearish newsletter # cross, and a high VIX -- I will bide my time with tiny buys and tiny shorts and keep my cash nice and cozy for better oportunities to ride the wave up.
Good luck out there.
New Swing Longs: BBBB PPDI STJ PBCT
Longs Outperforming Market: LDSH CRED HOM ADST
New Swing Shorts (choose wisely): TRW LSS OMM OXY THO XOM ICUI SLB HYDL APC PPP DSL TRZ DRH
Shorts Outperforming Market: PQE NVR WLS PHM LEN IPCR NAV NJR ALB VCG MAS DUK CNSL
Monday, October 17, 2005
Markets Close Near HOD; However, Volume Was Much Lower
A nice last hour of the day made for a nice close near the highs of the day for all the major market indexes. Volume was lower, sadly, indicating a lack of institutional investors willing to put money to work. I am sure earnings season has something to do with this.
The very short term trend has turned up but besides that there is not much else bullish about the overall market. Even with bearishness creapin higher, volume is lacking on the upside and breadth is still very poor. With that calling for a bottom here seems way too premature.
Down days on higher volume followed by rallies on low volume is not what you like to see if you are bullish and looking for a meaningfull bottom. Normally the last leg lower will have lower volume and the subsequent up days will have very noticable increase in volume (think March 2003 bottom). Until I see that it makes it hard for me to think any solid bottoming is actually happening currently in the market. We still need more bears in the market, however we are down quite a bit and a relief rally is deserved.
Since it is day four into the most recent rally attempt, we have to now look for a 1.5% move to the upside on an increase in volume. If that happens it will be safe to start looking for great stocks breaking out of great bases. Until that happens, keep cash heavy incase we reverse to new lows.
The markets can follow through out of nowhere. You never know what it will do tomorrow, so stay on top of leading stocks in leading sectors and take your cue from them.
Have a great Tuesday. Goodnight.
New Swing Longs: HOM ALO OXM AH WBMD FWLT NT CAMP
Longs Outperforming Market: KNOT PRLS LWSN BRLC AKAM GES BCRX TSAI THRX
New Swing Shorts: OMI
Shorts Outperforming Market: GPRO QGEN IPCR
Small Stocks On Radar Screen: AKN KNAP
The very short term trend has turned up but besides that there is not much else bullish about the overall market. Even with bearishness creapin higher, volume is lacking on the upside and breadth is still very poor. With that calling for a bottom here seems way too premature.
Down days on higher volume followed by rallies on low volume is not what you like to see if you are bullish and looking for a meaningfull bottom. Normally the last leg lower will have lower volume and the subsequent up days will have very noticable increase in volume (think March 2003 bottom). Until I see that it makes it hard for me to think any solid bottoming is actually happening currently in the market. We still need more bears in the market, however we are down quite a bit and a relief rally is deserved.
Since it is day four into the most recent rally attempt, we have to now look for a 1.5% move to the upside on an increase in volume. If that happens it will be safe to start looking for great stocks breaking out of great bases. Until that happens, keep cash heavy incase we reverse to new lows.
The markets can follow through out of nowhere. You never know what it will do tomorrow, so stay on top of leading stocks in leading sectors and take your cue from them.
Have a great Tuesday. Goodnight.
New Swing Longs: HOM ALO OXM AH WBMD FWLT NT CAMP
Longs Outperforming Market: KNOT PRLS LWSN BRLC AKAM GES BCRX TSAI THRX
New Swing Shorts: OMI
Shorts Outperforming Market: GPRO QGEN IPCR
Small Stocks On Radar Screen: AKN KNAP
Saturday, October 15, 2005
A Lot Of Negative Energy Remains In The Air. Is It Really That Bad Out There?
New Swing Longs: ORCC MACR AZN THRX SLW
Longs Outperforming Market: MGN BCRX CHIC SYS MESA TSAI PGR ASGN
New Swing Shorts: POOL
Shorts Outperforming Market: QGEN PII SONC
Longs Outperforming Market: MGN BCRX CHIC SYS MESA TSAI PGR ASGN
New Swing Shorts: POOL
Shorts Outperforming Market: QGEN PII SONC
Thursday, October 13, 2005
Markets Mixed On Low Volume; No Power To Bounce
I covered a lot of my shorts today that did not work the past two days and continue to hold the shorts that are working. Any short that has not shown me a gain has automatically been completely sold. The ones that have shown a profit from day one will be held for further downside possibility.
The market is due for a bounce but since the volume is light and there is not a lot of charts to pick from I can not see how this could last that long. However, I could be completely wrong. It wouldnt be the first time.
We will see what comes from this lazy bounce by the Nasdaq in the next couple of days. Until then continue to keep cash high and have very tight cut losses on the positions you do take.
New Swing Longs: SMSC FAST LRCX FELE
Longs Outperforming Market: SYS PGR IVIL
New Swing Shorts: QGEN
Shorts Outperforming Market: JRCC CNTF DXCM MT BOL ALDN BUCY DUK VOLVY CNSL
The market is due for a bounce but since the volume is light and there is not a lot of charts to pick from I can not see how this could last that long. However, I could be completely wrong. It wouldnt be the first time.
We will see what comes from this lazy bounce by the Nasdaq in the next couple of days. Until then continue to keep cash high and have very tight cut losses on the positions you do take.
New Swing Longs: SMSC FAST LRCX FELE
Longs Outperforming Market: SYS PGR IVIL
New Swing Shorts: QGEN
Shorts Outperforming Market: JRCC CNTF DXCM MT BOL ALDN BUCY DUK VOLVY CNSL
Wednesday, October 12, 2005
Markets Suffer Another Distribution Day; Getting Ugly Out There
I am not sure what tomorrow will bring but I can say one thing: This market is ugly. Unfortunately, it is not ugly enough to have a long-term meaningful bottom. As each day goes by the charts in my scans get uglier and uglier. I have very few nice charts and the ones I do have are not that nice. The shorts on the other hand have been working really well. That combined with all the fresh charts breaking down tells me that there is more downside to come in the short term.
A bounce should be expected though, since the market can not go straight down. And if it does go straight down, I think we could have an October crash. But I really doubt that is going to happen and see any rally just leading to more selling later on.
How to know when the downtrend is done? Wait for the stock market major indexes to close up, then watch for a follow-through accumulation day in the next four to seven sessions. A follow through day normally consist of the markets closing up 1.5% or more on volume much heavier than day before and the volume also being above the 50 day volume average. If you get that along with a lot of beautiful breakouts on well formed stock charts you will know it is safe for the time being to go long again.
Beautiful green charts is something that is not out there right now and it is going to take some time for those pretty charts to show up again. While that time passes, keep cash high and keep paying attention to the market. That way you will be ready when the market is ready to go into a bullish uptrend.
New Swing Longs: PGR XTXI SSY
Longs Outperforming Market: ADST-78%, TGC-102%, SYS IED ESLR BRLC
New Swing Shorts: DXCM RGLD SINA ALB CRI PQE BHS CNSL
Shorts Outperforming Market: LZB-20%, CNTF-49%, EVVV-25%, LEND-21%, THLD-16%, NAV-15%, RUTX NVR NDE CORS PGL CBL NJR LEE TRID LTM BUCY CMLS BRKL ALDN KERX WLS LEN RAS
A bounce should be expected though, since the market can not go straight down. And if it does go straight down, I think we could have an October crash. But I really doubt that is going to happen and see any rally just leading to more selling later on.
How to know when the downtrend is done? Wait for the stock market major indexes to close up, then watch for a follow-through accumulation day in the next four to seven sessions. A follow through day normally consist of the markets closing up 1.5% or more on volume much heavier than day before and the volume also being above the 50 day volume average. If you get that along with a lot of beautiful breakouts on well formed stock charts you will know it is safe for the time being to go long again.
Beautiful green charts is something that is not out there right now and it is going to take some time for those pretty charts to show up again. While that time passes, keep cash high and keep paying attention to the market. That way you will be ready when the market is ready to go into a bullish uptrend.
New Swing Longs: PGR XTXI SSY
Longs Outperforming Market: ADST-78%, TGC-102%, SYS IED ESLR BRLC
New Swing Shorts: DXCM RGLD SINA ALB CRI PQE BHS CNSL
Shorts Outperforming Market: LZB-20%, CNTF-49%, EVVV-25%, LEND-21%, THLD-16%, NAV-15%, RUTX NVR NDE CORS PGL CBL NJR LEE TRID LTM BUCY CMLS BRKL ALDN KERX WLS LEN RAS
Tuesday, October 11, 2005
New Short-Term Lows For The Indexes
I don't know about you but the market keeps getting uglier and uglier. The good news about that simple observation is it gets us closer to a low.
Unfortunately, I don't see that happening any time soon. I see a fresh new batch of shorts tonight on my scans and know some of these will reap good gains with their TERRIBLE patterns. You don't see charts like this in a bullish market. The trends are down and there is not much us to say besides that.
The bullish/bearish newsletters, put/call ratio, and VIX will give us a clue when the bottom might come and they are telling us there needs to be much more downside before any extreme is put in.
With all the ugly charts, longs I have been selling and trimming, and lack of new buys showing up I think it is safe to say any rally that happens anyway will only be sold.
The damage is all around and it will take time to recreate nice beautiful bases for a successful run to new highs. Until then, relax and keep cash high (unless you are a master short seller).
The market will stop falling one day and launch a great bull again, just like in March 2003. The earnings are too good and the market is not that expensive on a trailing, current, and forward looking P/E base. And like I said before, unless earnings crash-which they are not-the uptrend that will come about from this downtrend (bear) period should produce wonderful gains.
Until then, the market sucks for longs and continues to treat the bears with the spoils of the bulls. But don't take this to mean it is just time to short anything and everything. You have to be selective and be prepared for a big oversold relief bounce at anytime.
Prepare for every situation you can foresee coming and nothing will catch you off-guard.
New Swing Longs: TSAI CHH TESOF
Longs Outperforming Market: NDAQ-185%, TGC-95%, BCRX-88%, ADST-60%, AOB-22%, SYS MESA BRLC VICL MTN
New Swing Shorts: TRID GNSS LTM BUCY CLS CMLS DBRN BCR LEE WFSL NVR BRKL VOLVY ALDN KERX DHI MWIV ISE
Shorts Outperforming Market: TNH-28%, WCI-19%, EVVV-16%, LZB-13%, VCG BOL NAV
Small Stocks On Radar Screen: VLGEA TRT TOD LRP PZA GROW DASTY
Unfortunately, I don't see that happening any time soon. I see a fresh new batch of shorts tonight on my scans and know some of these will reap good gains with their TERRIBLE patterns. You don't see charts like this in a bullish market. The trends are down and there is not much us to say besides that.
The bullish/bearish newsletters, put/call ratio, and VIX will give us a clue when the bottom might come and they are telling us there needs to be much more downside before any extreme is put in.
With all the ugly charts, longs I have been selling and trimming, and lack of new buys showing up I think it is safe to say any rally that happens anyway will only be sold.
The damage is all around and it will take time to recreate nice beautiful bases for a successful run to new highs. Until then, relax and keep cash high (unless you are a master short seller).
The market will stop falling one day and launch a great bull again, just like in March 2003. The earnings are too good and the market is not that expensive on a trailing, current, and forward looking P/E base. And like I said before, unless earnings crash-which they are not-the uptrend that will come about from this downtrend (bear) period should produce wonderful gains.
Until then, the market sucks for longs and continues to treat the bears with the spoils of the bulls. But don't take this to mean it is just time to short anything and everything. You have to be selective and be prepared for a big oversold relief bounce at anytime.
Prepare for every situation you can foresee coming and nothing will catch you off-guard.
New Swing Longs: TSAI CHH TESOF
Longs Outperforming Market: NDAQ-185%, TGC-95%, BCRX-88%, ADST-60%, AOB-22%, SYS MESA BRLC VICL MTN
New Swing Shorts: TRID GNSS LTM BUCY CLS CMLS DBRN BCR LEE WFSL NVR BRKL VOLVY ALDN KERX DHI MWIV ISE
Shorts Outperforming Market: TNH-28%, WCI-19%, EVVV-16%, LZB-13%, VCG BOL NAV
Small Stocks On Radar Screen: VLGEA TRT TOD LRP PZA GROW DASTY
Monday, October 10, 2005
Sellers Start Taking Control After One Day Bounce
After moving higher early in the day, the markets reversed to finish near all of their LODs (low of day). Volume was lower on the Nasdaq offering some comfort to overextended bulls but volume increased on the NYSE giving yet another distribution day to an index that has been under attack by them for three weeks now. Now is definitely not the time to be overextended on the long side with so much clear distribution in the market.
There are still zero positive signs on the horizon, with the ugly technical picture of the indexes along with all the broken charts. That along with the lack of emotional selling could paint for a long slow decline. But we will cross that bridge when we get there.
In the meantime, strength continues to get sold quickly and sellers continue to press it to the downside. That is bearish for the market. Until that pattern changes it is safe to stay defensive and wait for the trend to once again become your friend.
Until then, all news is bad news.
New Swing Longs: MSM NMTI FII VICL GCOM
Longs Outperforming Market: NDAQ-173%, SYKE-64%, BCRX-62%, NFLX-62%, RCCC-60%, APT-59%, CRXL-27%, FDG MGN BRLC
New Swing Shorts: THLD DFG BOL BWA NETL
Shorts Outperforming Market: TOL-20%, PHM-17%, WLS TEN LEN MGA RAS RYL CTX EVVV RUTX
Stocks with percentage after them represents the total profits on original position. The stocks without percentages are either new longs/shorts or have not gone up 25% yet or (for shorts) have not gone down 15%.
There are still zero positive signs on the horizon, with the ugly technical picture of the indexes along with all the broken charts. That along with the lack of emotional selling could paint for a long slow decline. But we will cross that bridge when we get there.
In the meantime, strength continues to get sold quickly and sellers continue to press it to the downside. That is bearish for the market. Until that pattern changes it is safe to stay defensive and wait for the trend to once again become your friend.
Until then, all news is bad news.
New Swing Longs: MSM NMTI FII VICL GCOM
Longs Outperforming Market: NDAQ-173%, SYKE-64%, BCRX-62%, NFLX-62%, RCCC-60%, APT-59%, CRXL-27%, FDG MGN BRLC
New Swing Shorts: THLD DFG BOL BWA NETL
Shorts Outperforming Market: TOL-20%, PHM-17%, WLS TEN LEN MGA RAS RYL CTX EVVV RUTX
Stocks with percentage after them represents the total profits on original position. The stocks without percentages are either new longs/shorts or have not gone up 25% yet or (for shorts) have not gone down 15%.
Dead Cat Bounce On Low Volume
The market stopped the downtrend with its oversold bounce on Friday. Dont get too excited this should just be a small pause before the downtrend continues.
New Swing Longs: CRED PNRG GES IED MTN EE DEZ AU TLWT RL CEF
Longs Outperforming Market: BCRX NDAQ CRXL ADST TVIA NFLX MGN SYS BRLC
New Swing Shorts: JAH ENCY
Shorts Outperforming Market: CHKP JILL
New Swing Longs: CRED PNRG GES IED MTN EE DEZ AU TLWT RL CEF
Longs Outperforming Market: BCRX NDAQ CRXL ADST TVIA NFLX MGN SYS BRLC
New Swing Shorts: JAH ENCY
Shorts Outperforming Market: CHKP JILL
Thursday, October 06, 2005
Market Continues To Weaken; EOD Short Term Oversold Bounce
The major indexes all finished down, again, today. Breath was very poor and volume rose heavily across the board, giving the markets yet another distribution day.
The good news behind this was the oversold bounce we got with about one hour left in the day. This oversold bounce helped relieve the downtrend of aggressive selling pressure, which gives comfort that the bulls can bounce this for a day or two.
But besides that little ray of light, there is nothing else shining out there. Inflation and the Fed going strongly after it and the asset bubble in the housing market is not a good recipe for stocks. So once again keep raising cash and dont be aggressive with any long side trades until the market has given a clear signal the downtrend is over. And just by looking at all the charts out there that have been taken out the past week and the few strong charts that are in decent sectors, I come to the conclusion that a bottom is nowhere near at these levels.
At the same time I am hearing people talk of a "crash" coming. Nope. Sorry. It is not going to happen.
There is too much program trading happening in the stock market to allow that sort of thing to happen. Besides that is the simple fact that stocks are still basically cheap. Unless P/E ratio's start to contract--P/E of SP500 is 18--there is no way a crash is going to happen with stocks this cheap. I believe back in 1987 the SP P/E ratio was around 28 or so. That kind of froth mixed with the current technical situation of then indexes could lead to a crash. But at these levels, I TRUELY DOUBT IT. Also is the fact everyone is talking about a crash. Crashes happen when no one is ready for it. So "Black Monday" probably is not going to happen. LOL.
New Swing Longs: FDG BAB NEM LWSN SYS
Longs Outperforming Market: IRIS AAI SYKE PEP
New Swing Shorts: CHKP CIB GPRO SJT VCP WLS LUFK PETM ADI BJ
Shorts Outperforming the Market: AMHC MTH VLCCF KNXA JRCC EVVV TOL WCG
Small Stocks On Radar Screen: SA
The good news behind this was the oversold bounce we got with about one hour left in the day. This oversold bounce helped relieve the downtrend of aggressive selling pressure, which gives comfort that the bulls can bounce this for a day or two.
But besides that little ray of light, there is nothing else shining out there. Inflation and the Fed going strongly after it and the asset bubble in the housing market is not a good recipe for stocks. So once again keep raising cash and dont be aggressive with any long side trades until the market has given a clear signal the downtrend is over. And just by looking at all the charts out there that have been taken out the past week and the few strong charts that are in decent sectors, I come to the conclusion that a bottom is nowhere near at these levels.
At the same time I am hearing people talk of a "crash" coming. Nope. Sorry. It is not going to happen.
There is too much program trading happening in the stock market to allow that sort of thing to happen. Besides that is the simple fact that stocks are still basically cheap. Unless P/E ratio's start to contract--P/E of SP500 is 18--there is no way a crash is going to happen with stocks this cheap. I believe back in 1987 the SP P/E ratio was around 28 or so. That kind of froth mixed with the current technical situation of then indexes could lead to a crash. But at these levels, I TRUELY DOUBT IT. Also is the fact everyone is talking about a crash. Crashes happen when no one is ready for it. So "Black Monday" probably is not going to happen. LOL.
New Swing Longs: FDG BAB NEM LWSN SYS
Longs Outperforming Market: IRIS AAI SYKE PEP
New Swing Shorts: CHKP CIB GPRO SJT VCP WLS LUFK PETM ADI BJ
Shorts Outperforming the Market: AMHC MTH VLCCF KNXA JRCC EVVV TOL WCG
Small Stocks On Radar Screen: SA
Wednesday, October 05, 2005
All Stock Market Indexes Are In Downtrends; Raise Cash
I have been too busy with persoanl issues to post. But just know the market is very weak and all the indexes have rolled over into downtrends. The downtrends are on a short, sub-int, and now intermediate time frame.
Raise cash and if you know how to short-fire away. I sold down a lot of stock today and will sell some more tomorrow. With that I have also increased my short positions.
Great luck and if you have been reading this blog the past two days should not have come as a surprise.
New Swing Longs: BEAV OXGN PEP MTIX
Longs Outperforming Market: TGC NDAQ SYKE CRDN ANAD CGPI
New Swing Shorts: MGA HBHC NSS TEN MT RDK MON NJR NDE BMY HC TNP KDN DUK CLI CBT JILL NTLI BMO AEE
Shorts Outperforming Market: WMGI LZB PII HDI MTH LEA PHM VLCCF ACAT PGL WNC RMK TMA UTR CBL FO ACS RAS NHP RHD
Small Stocks On Radar Screen: SAVB TRT MGP TOD
Raise cash and if you know how to short-fire away. I sold down a lot of stock today and will sell some more tomorrow. With that I have also increased my short positions.
Great luck and if you have been reading this blog the past two days should not have come as a surprise.
New Swing Longs: BEAV OXGN PEP MTIX
Longs Outperforming Market: TGC NDAQ SYKE CRDN ANAD CGPI
New Swing Shorts: MGA HBHC NSS TEN MT RDK MON NJR NDE BMY HC TNP KDN DUK CLI CBT JILL NTLI BMO AEE
Shorts Outperforming Market: WMGI LZB PII HDI MTH LEA PHM VLCCF ACAT PGL WNC RMK TMA UTR CBL FO ACS RAS NHP RHD
Small Stocks On Radar Screen: SAVB TRT MGP TOD
Tuesday, October 04, 2005
Distribution Day For The Stock Markets Major Indexes
Stock Indexes fell across the board on heavier volume than the previous two days during the EOQ markup. What made the selloff worse is how it started. The markets steadily were marching up till the middle of the day when all of a sudden the selling started, picked up, and never stopped till the close. That gave the feeling of clear institutional selling.
The Nasdaq failed to breakout above its 50 dma which is not very positive, considering how the market is acting recently. With it now failing at this average again, we can assume path of least resistance is definitely down not up for the Nasdaq. As for the other indexes it is still hard to come to a conclusion on them for now, except to say the look very weak.
Raising cash and protecting profits is very important at this juncture right now. Selling longs at first sign of weakness is necessary to preserve cash for better times.
REITS and Homebuilders look like they are ready to rollover AGAIN to the downside. A lot came up on the short scan again today breaking below key support. Since these were the market leaders past three years I dont see how this could be a good thing.
New Swing Longs: IRIS BRL DVA CHIC SWW NT CAMP TEVA ENTG
Longs Outperforming Market: TGC BMD BTUI APT RBA CMED BTJ ASF MESA RCCC BCRX REGN AAI LCC
New Swing Shorts: UTR NHP MAC RAS RMK ANGO CBL
Shorts Outperforming Market: VLCCF RYL TMA RHD NCTY
The Nasdaq failed to breakout above its 50 dma which is not very positive, considering how the market is acting recently. With it now failing at this average again, we can assume path of least resistance is definitely down not up for the Nasdaq. As for the other indexes it is still hard to come to a conclusion on them for now, except to say the look very weak.
Raising cash and protecting profits is very important at this juncture right now. Selling longs at first sign of weakness is necessary to preserve cash for better times.
REITS and Homebuilders look like they are ready to rollover AGAIN to the downside. A lot came up on the short scan again today breaking below key support. Since these were the market leaders past three years I dont see how this could be a good thing.
New Swing Longs: IRIS BRL DVA CHIC SWW NT CAMP TEVA ENTG
Longs Outperforming Market: TGC BMD BTUI APT RBA CMED BTJ ASF MESA RCCC BCRX REGN AAI LCC
New Swing Shorts: UTR NHP MAC RAS RMK ANGO CBL
Shorts Outperforming Market: VLCCF RYL TMA RHD NCTY
Monday, October 03, 2005
A Day Without A Conclusion
Stock indexes opened near their highs for the day, then in very choppy trade moved lower to eventually close near their lows of the day. Neither the bulls nor bears really took control as the indexes ended mixed inbetween .2% points up and down.
The market action was very boring, as far as the indexes are concerned. It appears, for now, that is what we have more of in the future, since both sides have a weak argument. The bulls and bears argument are both boring and getting quite old. Hearing the same arguments day after day gets REAL OLD and helps NO ONE.
On the other hand, the action in individual stocks paints a different picture. As you can see below there is plenty of action in individual stocks. Unless you have HUGE 300 to 1 kind of daytrading leverage on the indexes, stocks is the only place to make BIG money right now (not including smart option trading, of course).
The caveat: They just can not be any stock. You want stocks trading above the 50 and 200 dma, have huge volume surge coming out of a good base, are in a strong sector--top 20% of 3 or 6 month price performance, and PREFERABLY has great fundamentals or a nice turnaround in fundamentals. Of course, there is more, but if you always look at the stocks I take everyday, you will soon be able to see the patterns in them. If you dont know how to find them, remember I wrote a Worden Submission in early June. I am SirAloha.
New Swing Longs: CTHR HDB CMED ABAX PDLI KEM SKIL BRLI JDO RDY ALFA CDMS
Longs Outperforming Market: SMTS MCF(50%) ARD(80%) TGC VRTX(55%) SSFT GMXR(90%) AKAM HOKU MNG FIX ACPW ZIGO DCEL(225%) RG(45%) ANAD DESC(135%) PRLS(135%) MXWL FLSH BMD(130%) SYKE(40%) BVF KNDL(125%) TMWD AAI LCC NRPH(50%) ALSC CGPI BTJ---------A lot of the same names you see everday (stocks up over 40% since original purchase)
New Swing Shorts: RHD DLX ACS
Shorts Outperforming Market: NCTY WCG VLCCF WMAR
The market action was very boring, as far as the indexes are concerned. It appears, for now, that is what we have more of in the future, since both sides have a weak argument. The bulls and bears argument are both boring and getting quite old. Hearing the same arguments day after day gets REAL OLD and helps NO ONE.
On the other hand, the action in individual stocks paints a different picture. As you can see below there is plenty of action in individual stocks. Unless you have HUGE 300 to 1 kind of daytrading leverage on the indexes, stocks is the only place to make BIG money right now (not including smart option trading, of course).
The caveat: They just can not be any stock. You want stocks trading above the 50 and 200 dma, have huge volume surge coming out of a good base, are in a strong sector--top 20% of 3 or 6 month price performance, and PREFERABLY has great fundamentals or a nice turnaround in fundamentals. Of course, there is more, but if you always look at the stocks I take everyday, you will soon be able to see the patterns in them. If you dont know how to find them, remember I wrote a Worden Submission in early June. I am SirAloha.
New Swing Longs: CTHR HDB CMED ABAX PDLI KEM SKIL BRLI JDO RDY ALFA CDMS
Longs Outperforming Market: SMTS MCF(50%) ARD(80%) TGC VRTX(55%) SSFT GMXR(90%) AKAM HOKU MNG FIX ACPW ZIGO DCEL(225%) RG(45%) ANAD DESC(135%) PRLS(135%) MXWL FLSH BMD(130%) SYKE(40%) BVF KNDL(125%) TMWD AAI LCC NRPH(50%) ALSC CGPI BTJ---------A lot of the same names you see everday (stocks up over 40% since original purchase)
New Swing Shorts: RHD DLX ACS
Shorts Outperforming Market: NCTY WCG VLCCF WMAR
Saturday, October 01, 2005
Market Still Cofused But Nasdaq Follows-Through
This "title" line comment is refering to the last two days, since I did not comment on Thursday's market action.
The markets were up .01 to .5% today, with volume lower than yesterday. So there is not much to disect in today's market action. Yesterday, however, was a very good day for the Nasdaq as the index followed-through from a 5% decline. Not quite the decline you like to see before a start to meaningful rally but with the markets strength and all the good stocks I have I can not argue with the trend.
REMINDER: The above paragraph refers to the very short term trend.
The end of the quarter mark-up by mutual funds might have influenced the volume figures on Thursday, but since we dont know we have to go by the facts we have and those facts say the short-term trend has turned up (again).
I am neither bullish or bearish at this point, but I definitely can see how we can go higher with all the negative chatter. But it is starting to feel like that is all the chatter people like to hear. Well not me. And that is why the past two years while market has flatlined I have doubled my portfolio.
Instead of focusing on the negative all the time, you should try to take advantage of the negative situation and find a way to profit from it.
For now, we continue to wait, till an obvious intermediate trend becomes clear. Until then the long side still is providing much better oportunity to make money than the short side. That confirms that this market is still not ready to puke yet. But when it does, I wont hesitate to raise cash and start taking more shots at the short side.
Have a great weekend!
New Swing Longs: CHNL KG CLB GV GGR AKAM LCC CHKP SSTI WPI IT ALSC
Longs Outperforming Market: BMD(100% club) PRLS(100% club) ADSK EMKR VRTX TFSM NFLX SIRF ESLR AAI TMWD MXWL IVIL ENER DESC TRMS HOKU
New Swing Shorts: WAL FRZ PORK VLCM RACK MWIV KNXA RDEN ZNT
Shorts Outperforming Market: RUTX LHCG
Small Stocks On Radar Screen: ARCAF PMBC CTIB STFC BKRS BDMS SDAY IVIS EFJI TIWI SVA ISRL HWK
The markets were up .01 to .5% today, with volume lower than yesterday. So there is not much to disect in today's market action. Yesterday, however, was a very good day for the Nasdaq as the index followed-through from a 5% decline. Not quite the decline you like to see before a start to meaningful rally but with the markets strength and all the good stocks I have I can not argue with the trend.
REMINDER: The above paragraph refers to the very short term trend.
The end of the quarter mark-up by mutual funds might have influenced the volume figures on Thursday, but since we dont know we have to go by the facts we have and those facts say the short-term trend has turned up (again).
I am neither bullish or bearish at this point, but I definitely can see how we can go higher with all the negative chatter. But it is starting to feel like that is all the chatter people like to hear. Well not me. And that is why the past two years while market has flatlined I have doubled my portfolio.
Instead of focusing on the negative all the time, you should try to take advantage of the negative situation and find a way to profit from it.
For now, we continue to wait, till an obvious intermediate trend becomes clear. Until then the long side still is providing much better oportunity to make money than the short side. That confirms that this market is still not ready to puke yet. But when it does, I wont hesitate to raise cash and start taking more shots at the short side.
Have a great weekend!
New Swing Longs: CHNL KG CLB GV GGR AKAM LCC CHKP SSTI WPI IT ALSC
Longs Outperforming Market: BMD(100% club) PRLS(100% club) ADSK EMKR VRTX TFSM NFLX SIRF ESLR AAI TMWD MXWL IVIL ENER DESC TRMS HOKU
New Swing Shorts: WAL FRZ PORK VLCM RACK MWIV KNXA RDEN ZNT
Shorts Outperforming Market: RUTX LHCG
Small Stocks On Radar Screen: ARCAF PMBC CTIB STFC BKRS BDMS SDAY IVIS EFJI TIWI SVA ISRL HWK
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