Stocks spent the morning selling off, before a noon reversal that helped the indexes close in the upper portion of their daily range. The SP 600 finished up .09%, SP 400 up .07%, the Dow and SP 500 up .2%, and the Nasdaq was down .04%.
Volume was higher on all the indexes. The higher volume is a good thing to see as the markets test their 50 dma. Bouncing here on good volume is a positive for bulls. The higher volume, today, came after the market started to rally. That shows that institutions stepped in to buy stocks after not selling or supporting them in the early hours today.
However, the stocks that they decided to buy are not the stocks you would expect them to buy if the markets were really bullish. Tobacco, Hospitals, Drug Delivery, Drug Stores, and Personal Products are not the most "innovating" groups. Biotechnology is the only one "hot" group that got any respect in the midday reversal.
I don't know if that is bad, good, or just nothing to care about. What I do know is I still have plenty of stocks pulling back on very light volume that still are holding very well. At the same time I have had to sell some stocks that have pulled back too much but yet have not given an outright SELL SELL SELL signal. So I don't call this market good or bad while we chop. It just is what it is.
With that I still recommend reading my last 10 or so post to know where we are at. Tomorrow will probably be a repeat of the same blame of the day story. Bond market, bond market, bond market. I can't wait till we find something else to blame.
The people at CNBC should run this story tomorrow if the markets go up: "Stocks close up as Mr. Hayes watches his roomba robot vacuum the carpet. The robot brought a smile to the face of Mr. Hayes because he actually talked to it. The happiness spilled over to the Nasdaq and the NYSE as stocks rose across the board."
In all seriousness, the "reason" they tell you why the markets rose or fell has or had nothing to do with the real reason stocks rose or fell. Only a major natural disaster or a tragic unexpected terrorist attack by nut jobs can effect stocks.
The truth is the traders have known about this yield curve and have had the same economic data to look at the past three weeks. Not a whole lot has changed, except the media tells us that the inverted yield curve is now bad or good or bad?! I would be so confused if I was a newbie in this market environment and did not have the proper tools like IBD and TC2005.
Great luck tomorrow. I don't know what is going to happen. However, I don't need to know.
I was just in my chatroom and was telling a good friend of mine how I see weakness. Here is what was said:
SF: yes
SF: this feels and looks odd
SF: my positions getting weak
SF: around 1/2 are at very key points technically
SF: the problem is so many charts still look good or ok
SF: it is the long term winners that are getting hit
SF: and some of the *** fundamentals stocks
SF: also not good
SF: the semi action has sputtered out
SF: The hot money and speculative money is leaving
V: yep
V: ive made some cuts
SF: me to
SF: I am basically neutral on this market right now
SF: but there appears to be a real reason to be concerned
SF: but maybe the support holds
SF: and stocks rally one more time
SF: but look at MRVL and DIOD
SF: two leaders in a hot sector
SF: AAPL and NWRE
SF: two more hot leaders in another tech sector
SF: look at gold leaders ERS KGC NEM
SF: look at long term winners
SF: GMXR and RES
V: yea
V: and I am seeing more breakdowns
New Swing Longs: NHWK VLTR
New Swing Shorts: NONE
Longs Outperforming Market: SURG MEK-58% CIB-34% CLZR-29% BNT-35% ICTG-66% KNXA-44% EFII LCRD-85% PNRG-39% LTM CTEC WDHD ARS-40% ATHR-98% VTS SLAB CHE KDN HSKA-28% BGC-50% BEAS ASVI VIMC PETS-141% BAM VLG NTAP NNDS NGPS TWTC-107% MMK-31% FWLT-59% WBMD RUTH NYX-30% ELN-44% NENG JDSU-56% STEL GNBT-44% FLML BWNG-95% MNG-119% BKHM-58% VRTX-202% RBAK-152% Q-40% CCI-70% CVO-74% TXI SPSX UHAL-95% TFR-44% DSGX-41%
Shorts Outperforming Market: NONE
Stocks On Radar Screen: WEBX NOK
disappointing Ending To A Great Long: DESC. Sold final amount with 79% gain.
11 comments:
Hey, Josh, good commentary today. In "Reminisces of a Stock Operator" he talks about how sometimes the best play to make is to do nothing - sit things out. Is this one of those times? Obviously a follow-through day would give a signal to start looking to buy again, but what do you look for to start shorting? Individual chart patterns or the overall market? I am seeing very few longs right now but a few more short patterns. Like you said, as a new investor, I am quite confused, even with IBD and your blog. Thanks.
What would your ideal war room look like?
For a newbie. Only sit out if your charts are not working. No reason to just sell because of all the scary talk. As for buying new positions, I would not if you are a new investor. I love trading so will buy anything that looks good as long as market is not completely falling apart.
To start shorting the market has to be in an obvious sub-intermediate to intermediate downtrend. Every time I jump the gun, I get burned! Every time! Over and over. When I made big money in the 2000 crash and 2002 meltdown and mid year 2005--that can be seen in my blog--the trend was down and obviously down. Shorting too soon is silly. Anyways, what is the most you can make in a short? How much has HANS gone up since 2003. It is stupid being a bear, even when markets are falling. Why? Because even when markets are falling there will be sectors that go up more than the shorts that fall. But the more shorts falling will increase my personal bankroll just by odds. I am an odds player.
The SF stands for StraightFlush. I am a poker player in my heart. That is what I enjoy. Odds. And the odds are never on the shorts side until the market is ALREADY in an obvious downtrend.
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I think I want one computer running 4 monitors and one more computer running another 4 monitors. I would also want one laptop downstairs and one small mini one to travel with TCNet.
This investment is probably only a year off. I dont like getting things slowly because then it looks funny. I would rather go all-in on the project.
GREAT QUESTIONS!
Josh,
I definitely think snipping laggards here is key. Stocks that just aren't working here should be cut. As you say, and I agree we aren't in Sell mode yet, but its always good to be ready. Cover the break so to speak (remember driver's ed???). But selling into short-term weakness isn't a bright idea either. Search for stocks that have great fundamentals (IBD) and those who are exhibiting strength here!!!!!!!!!!!!!
As for a war room, i think you'd be able to have one computer running 8 monitors...now you'd have to have someone build it for you but its possible. You'd probably want 2gig of RAM boats loads of Hard Drive space (80gigs won't do ;) ). You'll have to get dual processers...SPEED, SPEED, and more SPEED!!!!
Although, with Josh being on island time, speed is something differnt for him!!!
BTW
HANS is poised to open up 6pts this morning...so much for being short this guy!
MktSpec
Josh, What is your take on TRAD here? It has been acting poorly since it hit a new high recently, and I am watching to see if it violates yesterday's low in today's session.
Thanks!
Elliot
LOL, spec. It is true overall we are very lazy on this island. The word "hurry" is not in my vocab. I feel sorry for all the tourist from NYC and LA. Not really. But we are very laid back here.
As for computer I do have aquaintances that make computers. I thank you for your advice. One computer would be better than two, if I can run all 8 monitors off of it.
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TRAD (9/29 buy date) is in the same situation half of my stocks are. You should have sold a little of TRAD the past month with that one big sell day and heavy churning action.
Now, after today's marke, you should be selling more. I will only have 30% of original positions at the open tomorrow. I have sold the other parts with an avg. 50% gain. The current holding is from my add-on from the November breakout.
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Cozza I will write a whole section on Fri, Sat, or Sun on how I use IBD and TCNet together. I know I have that one setion "how i scan my stocks." But I know I have not written how I use IBD yet.
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If I could ask everyone that reads this to bring this up to other investors you know it would be greatly appreciated I would like to get more people reading my blog.
I think more than 200 ppl should be reading this. :)
I just am not very good at "pimping" my blog.
I only found your site by seeing your postings on Rev's RM blog. I like your style and also trade the same type of stocks. Nice to see your picks, some of which I failed to see on my own. Also use TC2005 and it's invaluable for the type of scans we need to do. Keep up the good work. Don't know anybody else to get the word out about your site. It's a solitary journey we often take doing this, hunkered over our computers, pouring over charts, hunting, and your site helps. Have friends on Maui and been there twice. Great place.
Funny thing I have been suspended from posting on realmoney.com blogs. I can no longer post or even READ the post of others.
What in the hell ever happened to free speech? No wonder thestreet.com is losing readers and losing their best contributors. I mean if James DePorre leaves the site why would anyone subscribe?
The site may make money now thanks to getting rid of debt and overhead and packaging products better but realmoney.com is getting horrible. This is nothing like the site I remember back in 1998.
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Yes, cozza, I would like to have my site pop up near the top of search engines. If I search my blog it doesn't even come up in google or yahoo. If I search google blogs it comes up but I would like to see how I can climb the ranks as I have no experience in this.
Any help would be wonderful
Thank you for your kindness
Problem with using only one pc, is if it has any problems, you don't have a back up. I'm definetly going to have two pc's with separate monotors hooked to each. Anyhtought on which is better xview or zenview..........or dell for that matter......The pc I have now is capable of having 10 monitors hooked to it if you add the appropriate cards. But I want the extra pc for back up.Also I was trying to wait for windows new Vista , but my engineer buddy said whay wait, it would be full of bugs anyway for the first year or so. Comments please....thanks Greg
Greg, I concur. Having two computers is the way to go. I met this guy, last year, running 8 monitors on one and six on the others. His setup is incredible. And it does him well. You should email him. I will try to find his email address again. But I believe he used Dell. In fact, I know, he used Dell.
All of his monitors were 21" flat screens.
Obviously this guy has some capital.
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