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
6 comments:
The stock ANX has very low volume. Volatility is .57 which is not a good sign. Why do you believe in this stock?
I never "believe" in any stock. I simply trade the same way I do, every day of the year.
It had a high volume bounce off the 50 dma, after having a previous nice uptrend followed by a low volume downtrend. I dont believe in this stock. It either goes up and I like it or it fails at the 50 dma and I sell.
I had a couple of traders I know in chat rooms recently ask why I liked ONT and DIET (before they moved). I told them, "I dont like either one, unless it goes up."
ANX has created a pattern I have seen MANY MANY times and I am going with the percentages.
Just look at all the high volume up days on the previous uptrend. That is accumulation that can not be hidden. This looks like the resumption of the uptrend. But bottom line is, if it fails the 50 dma I leave with less than a 5% loss. At the same time if it moves higher like the previous uptrend that is a 200% gain.
Being a full-time poker player that knows and understands odds, I will take those odds every day.
Good luck
The bears are quite emotional, as they've been expecting a crash for quite a while. They really got pumped up when the yield curve inverted. As if "Glory, Hallelujah a recession is coming!" Strange to me. Of course, we'll have to wait and see what the inverted yield curve means or doesn't mean.
Low volume. Should be seeing some crazy moves here and there.
Are you talking about August which had high volume which made there be an uptrend in September?
Are you saying if it crosses the 50 MA once, which it is near right now, you will be out? Could it not cross the 50 MA and get a huge bounce?
Read your blog everyday. Thanks for the blog.
Agree, muddog. Whatever happens is cool with me. I just don't understand why they "root" for a recession.
Sick people, bottom line. The perma bears are the most negative and hateful people in the stock market. They say they are realist, I say they are socialist in disguise.
Long Free Capital Markets!!
......................................
I am talking about the previous uptrend. Look at the weekly chart. If it fails 50 dma, that is it, cut your loss and move on. I dont care if it rebounds and goes higher, it should have broken out and worked the first time. If it fails the breakout then goes higher, I will reevaluate.
You have to cut your loss with a cross below the 50dma. It either works or you get rid of it and move on. Dont get married to stocks!
Aloha and great luck
Post a Comment