It was the same stuff as last week as stocks ran out of steam, after the early morning gap, and reversed to close with small gains. The SP 400 was up .4%, the SP 500, SP 600 and Nasdaq were up .2%, and the Dow Jones was basically unchanged. The blame of the day went on oil prices, bond yields, and AMD as the cause for the early morning reversal.
Volume came in lower which is very disappointing for the bulls. Lower volume and a gap reversal in the morning can only be taken as a sign the markets big boys are not in any hurry to bid stocks higher. The advance/decline line stayed positive after the reversal as leaders beat decliners by an 8.5-7 margin. Small consolation to an otherwise poor day.
The tech leaders from the October rally and the Semiconductors are still struggling and not participating in the rally we have had the past two days. That along with the lack of strong chart patterns and no new longs today gives me reason to watch the market very closely here. It is already under pressure and the failure of this bounce to produce anything special should be enough reason for new traders to start selling laggards. This was suggested over the weekend by a smart trader and I concur newbies should sell the weak stocks. However, I would hold the winners that are still acting well and not showing any signs of damage.
My new longs should have better starts than what they are having. I should have a lot more BEL, NENG, ISV and WDHD acting stocks than what all these new buys are producing. This along with the previous paragraph just shows how crazy the market is right now. It isn't weak enough to give up on it yet or strong enough to get behind. It just is.
Good luck and I will see you tomorrow for more of the same stuff.
New Swing Longs: NONE
New Swing Shorts: NONE
Longs Outperforming Market: STMP-43% ERS-123% FFIV CTXS-29% XRTX CYBS NNDS-26% MFLX-181% CLZR-31% KNXA-51% SAY-29% TRAD-44% WIRE-143% SCHK-28% PETS-155% RATE-116% SLW-95% RUSHA TNOX-33% ASVI MTU VTS NVDA-60% BBD-133% LTM ROK CIB-36% PKE MDCC-37% CHE NGPS VLG IKAN-33% MEK-67% MMK-35% PEC FWLT-59% ALTU SSW NHWK WBMD NYX-32% ISV EVST-52% NVAX-35% EMKR-108% BWNG-102% NRPH-103% HOM KNOL-33% ICU GEMS APAC-43% IIP VLTR FDRY MERX NENG-27% ASF-195% PAY-40% GNA NANX A BKHM-49% UBS STEL TGE JDSU-54% EAGL-44% NNI LMIA-73% BEL UIC-31% WDHD TISA ICTG-72%
Shorts Outperforming Market: NONE
Stocks On Radar Screen: ANO SCMR IMOS
3 comments:
Hi, I just wanted to thank you for your amazing work here. I am new to investing and have been finding your blog incredibly insightful, and it makes me feel less alone. You are probably helping more folks than you realize. Kudos on the lifestyle, you deserve it :)
Josh,
I am going to piggy back on your comment about trading for a living. Its essential that you actually trade for awhile before you decide to quit your day job. I'd say at least 1 year worth of real life trading...that is bare min. I'd really like to see 3 years worth of trading before thinking of making it a full time career. On top of that, SOUND MONEY MANAGEMENT skills!!!
Keep losses at a minimum!
MktSpec
The % in each position is up to the market. If the market is hot like it is now and producing so many candidates, I find it hard to keep more than 2-3% in any one position.
In bear markets I might have as much as 5% in one great acting stock. It just depends. There is no real set rule for number of stocks to hold.
For most new traders I dont suggest holding over 10 if you don't know what you are doing.
I do it this way because of odds. I have a high win/loss ratio and a big risk/reward ratio in my favor using the method I use. But I have a hard time picking the HANS TASR TZOO and BOOM as the only four to buy. That is too hard to do. But having a piece of all of them is easy for me to do.
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Thank you very much for the very nice comments. This really is a lonely profession. Most of the professionals I know are more of the value investing style. Which is an inferior method to the CANSLIM or any form of the CANSLIM method.
Thank you very much this lifestyle is great. I might have to change it for a little bit but I will be back. Living on Maui is no ka oi.
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Money management is the most important thing besides psychology when it comes to trading for a living. You have to treat this as a business not as a recreation.
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