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

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

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

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

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

New Swing Longs: ALKS NAK

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

New Swing Shorts: NTRI BMHC ELOS

Shorts Outperforming Market: PBCT

Stocks On Radar Screen: IRBT VIMC

Stocks Hold Firm After Yesterday's Sell-off

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

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

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

New Swing Longs: DROOY CPST ENER

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

New Swing Shorts: NONE

Shorts Outperforming Market: APOL

Why I Hate Shorting In Bullish Markets: LIN

Stocks On Radar Screen: ALY

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

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

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

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

New Swing Longs: ANX

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

New Swing Shorts: EDE CFFN

Shorts Outperforming Market: WEBX CECO APOL

Stocks On Radar Screen: SEAB SEED SWW

Merry Christmas and Happy Chanukah

New Swing Longs: DIET AVN

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

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

New Swing Shorts: NONE

Shorts Outperforming Market: NONE

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

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

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

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

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

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

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

New Swing Shorts: KBAY

Shorts Outperforming Market: BAP CNL

Disasters Of The Day: CTHR HHGP

Markets Drift Sideways Ahead Of Christmas

New Swing Longs: SWN WBMD BKHM ATHR CTXS IHS SEED

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

New Swing Shorts: NONE

Shorts Outperforming Market: CNL RSH BAP

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

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

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

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

New Swing Longs: IVAC GBN MCF

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

New Swing Shorts: MLM LIN

Shorts Outperforming Market: NCX VRNT BAP RSH

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

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

Market Starts Pullback On Mixed Volume

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

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

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

Primary and Intermediate trends: Up

Sub-Intermediate: Latteral

Short-Term trend: Down


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

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

New Swing Shorts: RSH CNL

Shorts Outperforming Market: BAP VRNT APOL SYMC SYD NCX WEBX

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

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

Quadruple Witching Friday

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

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

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

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

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

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

New Swing Longs: DDD

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

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

Shorts Outperforming Market: ATMI

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

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

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

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

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

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

New Swing Longs: PRTR

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

New Swing Shorts: SYD ATMI ATVI CERN

Shorts Outperforming Market: ASR

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

Stocks On Radar Screen: UACL AVAN NATI TLF SMXC

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

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

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

New Swing Longs: PNRG HAWK TXCO NKE VSEC

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

New Swing Shorts: ASR CAE

Shorts Outperforming Market: NONE

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

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

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

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

Good luck tomorrow!

New Swing Longs: NONE

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

New Swing Shorts: NONE

Shorts Outperforming Market: CECO WEBX

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

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

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

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

New Swing Longs: FSP EFJI TLWT CLRK HSKA

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

New Swing Shorts: NONE

Shorts Outperforming Market: CECO

Stocks On Radar Screen: KLIC MDP WEDX CAMT

The Books You Need To Become A Successful Trader

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

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

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

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

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

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

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


New Swing Longs: SIRI SPWR

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

New Swing Shorts: NONE

Shorts Outperforming Market: ESL WEBX

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

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

This Very Normal Pullback Continues

New Swing Longs: KOSP OMCL

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

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

New Swing Shorts:

Shorts Outperforming Market:

Markets Continue Pullback

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

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

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

New Swing Longs: BGO NTO APAC

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

New Swing Shorts: ESL NTGR

Shorts Outperforming Market: POSS K

Late Day Reversal Raises Short-Term Red Flags

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

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

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

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

New Swing Longs: NEM MDG AU NSTK TLEO CBEY

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

New Swing Shorts: CECO

Shorts Outperforming Market: SYMC KERX

Stocks On Radar Screen: CPST ASTSF KAL ASYS ANEN

Nice Orderly Pullback On Mixed Trade

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

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

New Swing Longs: ELN RTLX

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

New Swing Shorts: AV

Shorts Outperforming Market: NONE

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

A Nice Calm Way To Finish The Week

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

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

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

New Swing Longs: MACR LPSN ISE CDI BSMD

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

New Swing Shorts: NONE

Shorts Outperfoming Market: APPX ARM

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

Markets Erase All Distribution Days On Powerful Moves To New Highs

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

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

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

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

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

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

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

New Swing Shorts: NONE

Shorts Outperforming Market: APPX

Stocks On Radar Screen: TOD CNTF ZVXI CDI CPL