Tuesday, February 21, 2006

Markets Pullback Across The Board On Lower Volume

Buyers stepped aside today allowing stock market averages to fall across the board. The Semiconductor Index led the way falling 2.2%, the Nasdaq 100 fell 1.2%, the Nasdaq fell .8%, and the SP 500 and 600 fell .3%.

Volume fell across the board as well, indicating funds were not unloading stocks. The past two down days have come on lower volume, which is what you like to see after a follow through by one of the indexes.

The current rally is showing a lack of conviction and it is kind of hard to tell which way this market wants to go. But top stocks with strong fundamentals and technicals have been acting well so that tends to confirm the underlying strength in the market.

That along with my stocks acting well and the indexes mainly holding above their 50 day moving averages has me leaning to the bullish side.

Occasional big hits have happened here and there (today CNTF) but most stocks that have sold off have done so after giving me either large gains or plenty of warning signals to take profits or cut losses. Selling down most of my big winners in February really helped me lock in most gains in stocks like RES BNT MIDD before I had to sell the rest.

So with that we move on to Wednesday's trading. I am going to list the current trends of the market as I see them on the indexes so you know where I stand with the trends. Great luck out there!

SP 400 and 600 -- Long term: Up, Intermediate: Up, Sub-Intermediate: Down, Short term: Up

SP 500 -- Long term: Up, Intermediate: Up, Sub-Intermediate: Sideways, Short term: Up

Nasdaq -- Long term: Up, Intermediate: Up, Sub-Intermediate: Down, Short term: Down

Dow Jones -- All trends: Up

Philly SOX -- Long term: Up, Intermediate: Up, Sub-Intermediate: Down, Short term: Down

Nasdaq 100 -- Long term: Up, Int.: Up, Sub-Intermediate: Down, Short term: Down. Trading below 50 dma.

NYSE: Long term: Up, Intermediate: Up, Sub-Intermediate: Sideways, Short term: Up

New Swing Longs: STKL SMF DCO

Additional Purchase Of Current Longs: CHINA

New Swing Shorts: NONE

Longs Outperforming Market: COGO-28% BOOM-344% PNRG ERS-136% CLZR-35% CKCM ARS-42% ASVI-31% LDSH-46% GMXR-215% PETS-145% MFLX-168% AIX IHS-34% RAIL-62% KEX NNDS STMP-30% ADBE ASF-179% SCHK-28% TRCI WIRE-115% ORA-51% BBD-154% CIB-32% CHE RUSHA MEK MMK QCC ITRN SXC GNBT-30% NVAX RNAI RDCM-37% CHINA CDE PEIX RADN ESLR-109% IDEV DDD-48% CVO-68% GRS-78% SMDI-68% NAK LCAV ECLP SMSI MSPD SPSX-30% ROK AU HSP-32% BE RADS LTRX-37% HEIA

Stocks On Radar Screen: HEB HS MTSX

Disaster Of The Day: CNTF. 18% smack in the face in one day. What makes this worse is that I was long the full line of my original position from 2/2. Looks like today's gain in GNBT is wiped out by CNTF. Oh well, it happens in this exciting game of active investing. What do I do now? Sell it all and move on. It is the only thing you can do. What else should I do? Cry about it? Complain to my friends about it? Hell no. I pick myself up and move on.

10 comments:

Anonymous said...

Nice blog.. What do you think of US Global Investors GROW here?

hang loose

Elliot Corvallis, OR

Joshua_NControl said...

It doesnt look good.

I do like the stock when it comes to its fundamentals. And I did like the stocks chart but after January it has gotten ugly.

It is rallying on low volume and selling off on higher volume. It could be making a base here but if it is it is one ugly base.

My advice would be to stay away from this stock. It is not a chart I would put my money in.

But if you are looking at a long term investment of say three years or more, GROW could be a great stock if they continue to report EPS and sales growth the way they have been the past three years.

Thank you for the very nice comments!

WildStoic said...

Joshua:

How did STKL get on your radar screen? Technical screens or the IBD article on cellulosic ethanol perhaps? Curious to know since STKL is such a stealth stock.

Anonymous said...

any other blogs besides yours that you enjoy?

Anonymous said...

josh, great blog...been a reader for a while. (much more insightful than that bald-guy on cbnc that screams out day trades)...you said on some responses yesterday that you only trade EOD. So to clarify, does that mean that you only buy into new positions at the end of the trading day or do you also put in limit orders for next day open to buy your "new swing longs" ? also how much of a position do you buy when a new position....50% or more or less ?....do you ever miss out on buying within you pivot point by buying at the end of day if the stock has broken out that morning ?

thanks, OR-KITER

Anonymous said...

Big OR following!

Anonymous said...

Thanks for your take on GROW.. I got stopped out of it today. I will see if it forms a nice base over the next 2-8 weeks and maybe revisit it.

I'm curious about your take on energy here. I'll keep checking back.

best,

Elliot
Corvallis, OR

Joshua_NControl said...

hello wildstoic

If you search "how I scan for my stocks" on my blog, you will see how I find my list of stocks to pick from. Usually I get from 70-700 depending on the market and the volume.

Reading the IBD article and also knowing its growth helped. Good stock.
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I dont read any other blogs but I have checked some out. I am very impressed by the work some people put into their blog. I would love to do that too but I don't have the time to do all of that. I have to make money and enjoy Maui! Also having a girlfriend cuts out on the free time.
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After the market closes, if I am not surfing, I will wait two hours so all my EOD data in TCNet is completely updated. Then I start scanning my IBD and scanned stocks. After that I enter market and limit orders on my trading platform. That is it. I wake up in the morning, for about 30 minutes, and make sure everything executed and then I am back in bed.

I never take more than 5% of any one stock. I have a bad track record of piling in to the stocks I think will be big winners that turned out to be crap. So now I buy stocks EN MASSE. Most of the time a buy will not be more than 1% of portfolio. I can hold up to 200 stocks with no problem. I have a win/loss ratio right around 6.5 to 1 and a profit/loss ratio of 36% to 9%. So with these odds, just trading all the great patterns in bull markets and selectively taking smart long positions in the few stocks that work in sideways and bear markets I will outperform most people.

In my IRA I ONLY trade IBD stocks and so in there I have up to 10% or more in some positions. My IRA has never performed better than my regular account. I guess that shows the Hayes and DePorre methods are superior as long as you do this professionally. Obviously, if you are not a pro I dont recommend this. In that case I recommend only the IBD method.
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Thank you everyone for reading. I appreciate all the great and flattering comments. You guys are great. Continued success to you guys.

Anonymous said...

Hi, Josh, first of all a belated happy birthday to you. I wanted your opinion on a few charts.

ARO and AIX - two cup with handles that seem to have support nearby - waht do you think?

How does REGN's pullback look?

What about GIGM? I know you are long this stock - is it setting up as a possible buy?

Thanks in advance. Your blog is great for us readers.

Joshua_NControl said...

ARO and AIX - two cup with handles that seem to have support nearby - waht do you think?

How does REGN's pullback look?

What about GIGM? I know you are long this stock - is it setting up as a possible buy?

ARO: cup way too deep to be classified as cup with handle. And the prior trend is choppy and sideways. Usually, you want a strong uptrend then a cup with handle formation. ARO is not one I would touch.

AIX: I am long this stock already. This chart is better, however this chart is still not a cup with handle. The right side of cup's high is higher than the left side, the base is too deep, and the handle has way too much activity in it. So this can't be called a cup with handle. But I am long this stock and if it bounces here on heavy volume it would make a nice long.

REGN: I am still long. It is fine.

GIGM: Beautiful chart. It absolutely could be. Very nice quiet pullback.

Thank you for the wonderful comments and I wish you continued success.