The markets were a mixed bag of trading today, with the Nasdaq closing down while the SP600, 500, and 400 finished higher. Big tech stocks like GOOG helped weigh on the overall action of the market today. Volume did pick up across the board, giving the averages their second distribution day in as many days. However, if you look at volume during the advance from October, you will see that the volume on the upside was much heavier than the volume the past two days on the downside. Another positive is the fact that breadth on the Nasdaq and NYSE was positive by 3 to 2 and most stocks acted quite calm on their pullbacks. So overall not that bad of a day.
Today's trading had a fair amount of uncertainty to the action and appeared to be simple profit taking. I know that the past week I took some profits in a some big winners on either climax runs or new highs on low volume. And the stocks I am partialing out of will allow me to have more cash on hand for the new batch of breakouts that will come from the next rally to new highs.
We are still very overbought short term but long term the indexes look great (look at daily/weekly chart going back to 2002)! This uptrend looks fine and as you can see in the daily charts going back to 2002 in the indexes all trends are up in all time frames except the very short term. For the very short term the trend is down. But since 2002, the big bad old primary trend is up to sideways. Slow and steady wins the race.
New Swing Longs: ZEUS RDCM DEPO
Longs Outperforming Market: CNVR-48% CVO-43% CRDN-32% RADN GOL RVSN CMTL MRGE CTLM NNDS SKIL FDRY KPA CLZR ICTG
New Swing Shorts: KERX
Shorts Outperforming Market: APPX ARM POSS
Stocks On Radar Screen: CPL
4 comments:
This has nothing to do with the current market, because it does appear that we are having an expected pullback here, but I was wondering what you look for in short candidates. We've all heard the "weak stocks in weak sectors" slogan of what stocks to focus on. Is it as simple as looking for weak stocks running back up into resistance, whether it's their moving averages or previous bases, on lower than average volume? That's what I have done in the past, with mixed success. Is it important to take profits with shorts much quicker - say 10-15%? Any comments or thoughts would be appreciated. Thanks for the work you do with this blog. I continue to learn a lot.
Is KYPH a buy at 50 DMA or is that a handle i am seeing? BTW, i love the daily posts and i hope you keep writing because i know it is benefiting me and many other people.
If you pick up the book "How To Short Stocks" by William O Neil, I hate to sound like a broken record, you will see the exact patterns I look for in a short. I just want heavy volume failure from the 50 dma after a previous start of a downtrend from a former high flying stock.
Yes it is very important to take profits quickly. I would take the some at 10%, more at 25%, and thank your lucky stars if you can get much more. NOW in markets like 2000 and 2002 this does not apply. I look for the worst stocks with NO earnings that used to be high flyers to collapse at least 75%. So in markets like this 25% is a winner. In markets like 2000 the crap stocks should give you at least 50% before bottoming.
Just study histories biggest losers in William O Neil's book and you will be ONE HUGE step closer to getting it.
Absolutely you could buy KYPH right here with a cut loss with a move below the 50 dma.
Thank you for your wonderful comments. I definitely appreciate it. :)
Post a Comment