Friday, March 10, 2006

Stocks Bounce On Mixed Volume; What Will The Bears Scare Us With This Weekend?

Markets rallied across the board, as today's reason according to the media was the jobs report. Wonderful. The SP 600 rose 1.2%, the Dow Jones rose .9%, SP 400 rose .7%, the SP 500 rose .7%, and the Nasdaq was up .5%.

Volume was mixed, with the NYSE volume higher than yesterday and the Nasdaq lower than yesterday. The mixed volume is disappointing as you would like to see both indexes rally on HUGE trade, after this selling. That would confirm that maybe the downtrend is coming to an end. But for some reason I doubt this bounce will hold.

The mixed volume on this bounce along with the weak action in leading stocks is concerning. The IBD 100 fell 3.8%. The IBD 100 leads bull and bear markets. And with it leading the indexes to the downside that might portend to lower prices the next week.

The weak action in leading stocks and the indexes should caution new investors to keep buys small. Buying stocks in a weak or sideways markets automatically puts you at a disadvantage, as 3 out of 4 stocks follow the trend of the market.

If I am advising new traders not to purchase new stocks, why am I buying 12 stocks the past two days? The reason is because I have more experience and know that these small and speculative stocks make BIG runs at the beginning and end of market runs. This is the end, not the beginning. The beginning was October 2002. These kind of longs are more volatile and have a higher failure rate than the high quality IBD stocks. Those high quality stocks started breaking out in October. Once again, we are late in the rally and most have cracked. Therefore, my thesis being near the end and not the beginning.

However, there is already a TON of negativity out there and the technical picture has already deteriorated that most of the selling might have been done. This is confirmed by looking at how far down the bulls have come and how far up the bears have gone in the AAII and II surveys. A the same time, I still have tons of current holdings that are holding up fine. But that can change in one day.

It wasn't a good weak overall, probably, for most traders. I did not have a good week but it was not something I need to kill myself over. Giving back some gains after having such a HUGE run from October is only to be expected. Markets can't go up all the time every year in and out. It just isn't healthy. Pullbacks are healthy and set us up for the new leaders.

I can't wait to hear all the scary and disgusting stories the media will come up with this weekend on why the market is ready to crash into Hades. Doom and gloom, baby. Doom and gloom.

Thank God, I live this life and don't have the meaningless existance that these reporters on CNN have. Breaking news, my butt. How many of you guys seen those Saddam Hussein tapes? Anyone? Anyone?

How I use IBD and TCNet coming soon. Before, Sunday, at least.

New Swing Longs: NNI RNT GEMS CVN IIP ICU--To read about these longs go to Investors Paradise and scroll down to Josh Hayes, click on Longs, and go to last page.

Rebuying What I Just Sold: SYKE (original buy 5/10/05)

Adding To Long: STXS

New Swing Shorts: NONE

Longs Outperforming Market: VIMC-42% PAY-37% GRS-94% RATE-112% BBD-131% CIB-35% COGO MEK-61% UHAL-99% RSTI-28% ORA-66% SLW-92% WIRE-138% BEAV-37% ARS-42% ASF-188% KNXA-47% CRDN-57% PETS-149% ATHR-99% MSCC-54% CBG-90% MTU SAY-26% BEAS RUSHA TNOX-31% LSI TWTC-112% MDCC-36% BOOM-346% MORN NNDS BGC-49% CYBS SIRF-122% IHS CHE SURG STMP-33% ICTG-71% PKE CTXS KDN BAM DECK LTM KEX NTAP FFIV SNPS HEIA-31% ALTU PEC RUTH FWLT-56% DMX-40% NDAQ-310% CCUR KNOL-29% EAGL-44% MSPD CDE EVST-40% DB NVAX-26% HOM UBS ADLR-74% IDEV LCC-62% SMSI STEL LIOX BGO-26% STXS PPCO BEL TISA SIM UIC-29% APAC-39% EMKR-98%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: ITRI EVVV HTI VNT OYOG FRD

Sad Ending To A New Long: PANL--leaving with a 4.5% loss.

6 comments:

Anonymous said...

Real Money probably saw you as promoting your site on theirs for free. I can understand their reaction. Too bad as you have a lot to contribute. Added to DMX on friday. Excellent looking chart still.

Joshua_NControl said...

We worked it out. That was the reason why. All is good now. I have posted my longs for all readers to read.

If they want to find me, they will.

:)

I, also, can completely understand their policy. The litigious society we have turned into forces them to do that.

Maybe someday, they said, they will have a section for readers to post their sites and blogs.

Aloha. DMX such a sweet chart! Very green and pretty.

Market Speculator said...

Josh...

Come on now, why is it taking you so long...should already be up by now...

There is a lot of negativity baked into this market, my concern is that there are still too many bulls out there...making me believe there is more room on the downside to run. We are definitely at the end of the road here for the bulls. I wouldn't be surprised if we run into a 9mo bear market here.

Wait and see attitude. But for new traders, this is when you dig down deep and really start to do more homework. Study the market, see how leaders/laggards perform. I'd go one step further Josh and start unloading laggards in your portfolio.

CKCM - didn't this crap the bed at its 50dma.

Anonymous said...

how did you get contacted for the real money site?

Market Speculator said...

Josh,

I'm starting to see some shorts coming up...Wondering if you have seen any...

OPWV comes to mind.

Very few, but there are some.

Interested in seeing your strategy in detail.

Later bud...

MktSpec

Joshua_NControl said...

Realmoney sent me an email. The site was simply flagged because it was had an http://. That is the only reason. They actually said they were ok with me contributing. So I have continued when I have time.

..........................................

Yes, market, I do see some short setup but I am not trading them until the markets starts an intermediate term downtrend. That is what I have learned is the key to making money on the short side FOR ME.

The markets are still producing more long opportunities of better quality than shorts. When more stocks go up 5% or more than shorts are down, which is still what we have, you play the odds on the long side.

CKCM--that was only a 5% loss. No big deal. Not that big of a deal. The stock was volatile as heck already.