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
2 comments:
Hello Josh,
I have been following your blog from about beginning of June and learnt a lot from you. One thing I noticed is that you had "New Longs" on your lists practically every day since then. In other words the buying has been constant; at times lots of names, other times just 2-3 names, but never one day without new longs. My question to you (as an neophyte in stocks) is how and when do you know it's time to "rest" and stop buying? And also please explain how do you decide to keep buying during market corrections? For example since I follow you we had two periods of market declines in August and September-October, but every day you had new longs on your list. Can you elaborate on this subject? My instinct and inexperience would stop me from buying at some point or another thinking I'm going to loose it all during a decline.
On a different subject, do you ever hedge your portfolio? Do you ever use options in your trading whether for hedging or just to take long/short positions?
Thanks as usual for your kind explanations,
Luca
You know when it is time to rest and stop buying when you run out of money, start going crazy, start neglecting your family, or start going crazy again.
I buy all nice stocks in strong sectors no matter what kind of market. How else you going to get the steals in 2004, homebuilders 2002, and any other big mover. I have been doing this for years now and know stocks break out all the time and the strong ones like PRLS, NDAQ, BOOM, CERS, GMXR, RTSX, RES, BMD, MFLX, DCEL, ANAD, ICON, SIRF, and ASF dont care what kind of market it is. This year and last year were not big bull markets like 2003. Yet, according to my home diary I owned 47 stocks past two years that made 100% plus moves.
The only thing is in down markets you wont have as many longs to work with, you will have cash on hand to wait or short, and you arent going long stocks in bad sectors. If you do that and follow IBD rules of investing you can do well. 3 out of 4 follow market. But I do a damn good job of getting that 1 every once in a while that is a huge gem during a bear market.
I used to use options all the time. But I stepped back. I will use them again I am sure. But for now I like this more. But when I trade options I look at Implied Volatility, price spreads, and only buy in-the-money options. I never gamble...
...Unless I am playing poker and that I should consider giving up. God knows I can't catch a break or have any luck near the end of tourneys or when I am on the bubble of cash prize. You know how many times I finish one or two away from prize money. It is unreal. Completely sick.
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