It was another day of mixed action, as the Nasdaq fell and the DJIA rose. The Nasdaq fell .7% on heavier volume, giving it its second distribution day in as many days, according to IBD. The SP 500 fell .2%, the NYSE was up .2%, the DJ was up .1%, and the SP 600 led to the downside with a .4% loss. Volume on the NYSE was higher but the SP 500 did not suffer a distribution day thanks to the less than .2% down close.
Today's big news of course was nothing new. Ben and the gang raised rates for the 16th straight time to 5%. That comes from the lows of 1%. As history repeats itself again, stocks have done nothing but rally the whole time. And if he is going to 5.5% or 6%, stocks will continue to rise. It is history folks. This isn't rocket science. So you can get as bearish and as scared as you want. I will just get cautious, knowing that history PROVES that stocks rise when rates are being raised. And stocks keep rising as soon as they are done. It is when they start cutting that you know something is wrong. When rates start getting cut, stocks start to fall.
IBD will be running an Investors Corner article on the relationship between the Fed and the stock market, on Friday. Please, read it!!!!!!!!!!
As for me, though I remain bullish, I am becoming more cautious. Some leading tech stocks are struggling, many long term winners are flashing climax tops, small caps are leading to the downside the past week, and many speculative breakouts are failing. This is a sign of a tired market. Especially as oil and gold stocks continue to do well.
However, until we actually rollover there is no reason to get bearish. Do you know how many stock charts I still have with no problems? Do you know how many of them have 25% EPS and sales growth the past 4 quarters? So I see no reason to run and hide and sell the whole danged portfolio.
As long as people are worried about inflation, interest rates, job numbers I will just keep my bullish posture on this market. That along with the constant six-year/all-time highs in the NYSE, SP 600, and DJIA make me wonder what the heck the bears are thinking. The Nasdaq is also still holding support at the 50 dma. Even though it is underperforming and COULD rollover it still hasn't. And until it does the support shows strength. However, at the same time, it is not good that the Nasdaq is lagging. But how can you blame it with oil being such a huge part of the big-cap indexes.
If things get worse, obviously, I will be raising more cash as I sell more stocks that give profit taking or sell signals. Until then I will stay with what I have.
The FOMC decision is over. Now what will the fools in our media focus on to help you NOT make money? Whatever BS it is, God knows there are plenty of "kool-aid" drinkers to lap it up!
I shall see you tomorrow!
New Swing Longs: NAII -- For more information on longs, go to Investors Paradise.
New Swing Shorts: NONE
Longs Outperforming Market(number is % gain since purchase): AUY-167 GIGM-235 NXG-228 BOOM-412 WIRE-216 LMIA-113 RBAK-231 ACTG-101 PEIX-128 KNOL-138 CLG-136 TSCM-153 SPNC-108 IED-107 ICTG-92 IFO-46 COGO-78 TTES-66 BAS TMI TZOO EAGL-85 FWLT-75 RAIL-84 ZEUS-74 WST STRL-50 MORN RSTI-53 NNDS-44 HEIA-44 FSTR CIB-35 MNST-72 PNRG-64 AAU MMK-27 KBX GPRE BWP CUP-58 ECLG-84 ENER-34 EXFO SIM-64 PRVT DTLK LIOX JOBS BEAV-59 EGO IT-33 DIS MGLN MERX-57 LEAP USB PCTI ACR-72 SYKE SWIR-64 SMF-20 ING-35 NAVI-28 GISX SNTO ATRO
Shorts Outperforming Market: NONE
Stocks On Radar Screen: PCLN BIDU CAAS AZPN DROOY
Cutting My Losses: PKTR IDSA
Take More Profits Example: IHS-29% gain
Take Rest Of Profits: MFLX-110% gain
Disasters: CAMP-20% loss, AVII-15% loss on 100 shares (not a big deal), TMTA-20% loss
Why You Don't Try To Catch A Falling Knife: ESCL (down 46%)
18 comments:
Or-Kiter: More brilliant advise/words!
Elitist (Yoni???): You are beyond your years of HS. You are very correct with your analysis. Remember, however, momentum can last a lot longer than you think. It is hard to stop a freight train traveling over 100 miles an hour in 5 seconds.
Books on economics? The best education I got was by reading 12 different newspaper editorials over the last eleven years (tons of facts that you can then research on the internet). The best economics book I have ever read is the "Issues and Insights" page at the end of IBD. A wonderful book that never ends!
Anonymous: AVII was totally spec. Correct. It was only 100 shares. Not a big deal. I was expecting a 50% move. If you read me on Investors Paradise, you will see I did not recommend anyone buying it.
Lower quality stocks WILL get beaten. It is already starting to happen.
You were smarter than me on AVII and you are correct with your downtrending 50 dma analysis. Perfect read!
Kelly: Yes you should have taken profits by now. CUP today. DIL yesterday on that volume. Both are speculative so you are supposed to be taking some profits on all spec stocks when they go up 25%.
EMA! Never! Don't get fancy! use the regular Moving Average. Histories biggest winners work with the simple 50/200 dma. Don't try to be smarter than history. Go to the search bar in this blog and search for "how i scan stocks."
Cup with handle pattern is my favorite right after a bear market ends and a bull starts. That is the best, imo. But all are good right after a bear ends and a bull ends like in March 2003
Anonymous: I agree with you on AZPN. I like it too but it has made too big a move already. The correct buy was on 12/01 and 01/04. The breakout from a two year cup with handle is a bit long for me to take right away. It seems like another period of sideways consolidation could lead to a better breakout that I would love to take.
Market: HANS simply amazing. 6000% gain in three years.
I hate this market! I cant wait till a bear market starts. I want a bear but the market does not care what I or YOU want.
This market is very tiring! I need a vacation or a very big bear market. I don't think I will get either one.
I am not the take a vacation kind of guy as you might have guessed by now. Probably why I lost my "i love to travel" girlfriend. LOL.
HANS ERS TIE are all climax runs.
That with all the momentum stocks sputtering out either signals the start of a major rotation. Into what? I cant tell this time. Or the market just needs to take a breather. I would love to see a 10% move lower. I doubt we will see 5%. Too tricky to guess. So why are we trying CNBC? Everyone has me wanting to guess. And that is all it really is.
The trend is still up.
i tired too, i think everyone is feeling the frustration.....i think i have maybe a 30%success rate on buys in the last month and the ones that havent broken below their buy point are barely up....now i got MERX puking this morning. i should have known to just sell it with this semi group so crappy(and with yesterday failed breakout leaving a tail)....out-or0kiter
josh, why do you need to travel when you already live in paradise ? (i've traveled extensively and Hawaii ain't a bad place to be). besides if you traveled then i wouldnt have a blog to bitch on about this tough mkt. gold another new high today, and TIE has now almost doubled since i sold it. argggh.out, or-kiter.
market is rolling over at least for the short term as metal stocks suck up capitol
Nazzy is a market cap weighted index...so the big winners in the index are not shining through because MSFT and INTC are doing horribly...its a shame!
Or-Kiter: I have to travel because that is what everyone else does. And since evryone always talks about where they have visited and the places they have seen I feel like I have to be an a**hole too and go around the world telling people where I have been. :)
J/K
Truthfully, I want to visit a lot of cities. I am a single guy. I am looking forward to start traveling this summer. First stop San Franfreako then another trip to Vegas. I am no stranger to the poker tables there.
Sorry about TIE but a great lesson learned on the power of momentum.
FINALLY MY BAD MARKET!
This is probably the bottom though, with my luck and all the crying babies out in the world of the stock market internet chatrooms.
Y.Y.: You are correct, sir.
Market: Not to mention CSCO and DELL.
Yeah those too!!!
Its really sad, take those out and I'd be interested in seeing what the Nazzy would be at now!
sell, sell, sell...no i mean buy, buy,buy....i just came back to my computer today to see the carnage. surprisingly i'm doing ok, even recent buys are holding in.(I think MERX is the only stock i have trading above avg volume on the downside, and its holding its 50dma). hopefully people have been selling out of former strong sectors that have been flashing caution/sell for weeks like broker/dealers and networking. now we'll hear how all the bear said "told u so"...blah,blah- i would be surpsied if Naz didnt bounce tomorrow after a 50pt drop today, although this is NOT the time to buy low-quality stocks-stick to strong fundamentals . well tomorrow is another day.(i gonna look for stocks that stayed positive in today's tape, that going be where i want to put money. - or-kiter
yep as a feared early in the morning what a nasty market close even the metal stocks closed at LOWS
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