Monday, July 31, 2006

A Quiet Lower Volume Day Kept Things The Same As It Was On Friday.

It was without a doubt one of those lazy summer days. The usual low volume, choppy intraday action, and near unchanged close is always the ultimate tell. A day of this kind of action makes it kind of hard to analyze, as not much has changed since Friday.

The SP 600 led the way with a .3% gain, the Nasdaq and SP 500 were down .1%, and the Dow Jones Industrial Average fell .3%. As you can see, nothing changed.

Volume was lower on both the Nasdaq and the NYSE, indicating big boys were not interested in participating. Breadth was positive on the Nasdaq by a 8-to-7 margin and the advancers and decliners were even on the NYSE.

The big gains on Friday were digested quite well on Monday and that can only be taken as a bullish sign for the markets on a short-term basis. However, with the Nasdaq still leading to the downside in the overall sub-intermediate trend I am not going to get too excited over the markets just holding these gains.

We need more big boys buying, simply put, if we want to get this market going. The charts are rising in a wedging formation on all the indexes and most of the individual charts that have broken are now coming up to resistance as they rallied on lower volume. Without big boys stepping in and buying now I wouldn't doubt this market just rolls over. I hope I am wrong as I know a lot of people still long this market. But I just listen to the charts. I try not to ever have opinions.

The market is in a short-term uptrend, I want to remind you one more time. However, the bigger picture is full of distribution, broken charts, and downtrends. This is not the market to load up on longs. The intermediate trend is down and on the Nasdaq the long-term trend is down.

Remember, also, the NYSE leads at the end of a bull market. The big caps are the last to rollover. This happens after the leaders rollover. The Nasdaq leads (not lags) during real rallies. In March 2003, the Nasdaq led the NYSE. With the big-caps leading now, you know you are in not the right market for easy money. So as long as the NYSE and big caps lead and the Nasdaq lags this bad (the Nasdaq is very ugly) you should keep your portfolio in cash.

In one more week the FOMC will meet. I am sure the market will be held hostage till then. However, as you know, there can be some wild random volatility leading up to these events.

With all the uncertainties in the stock market and the world right now, I still say the safest and smartest play for any new trader is to stay 100% cash. Stay positive, patient, and keep the watchlist updated. This market will turn one day. I shall see you tomorrow at Investors Paradise.


New Swing Longs: LNCE--for more info on longs and shorts go to Investors Paradise.

New Swing Shorts: NONE

Longs Outperforming: OMNI-198 AKAM-148 HSR-49 IHS-60 CTCI-75 USEY-43 VLG-35 TRMA RNST IGT DJO HMSY BWP DGX SEIC BOT CXW FORR MGLN IDEV DLP GISX ZONS DUCK

Shorts Outperforming: NTE CRXL JOYG BPFH USG WSM HCBK AVID MEOH MAFB BTH ISCA BLK BBBY GTRC GYI PBE MAS IYT FRC GE WFSL PDCO ESIO C AME HTLD NCC RS CAT WTFC AF DSL CNI HMY FWLT CPF FDX VLTR MAR DDE CGX LHO SYNA RRGB CI AHG

Covering Shorts: CTCO NAFC HNR

Stocks On Radar Screen: BRN--might go long 100 shares UTK ALY ISYS TRMB SHPGY ESI DIGE BAX BTE BKD BUF CHINA

Saturday, July 29, 2006

Huge Gain For Stocks, On Lower Volume, Bring A Close To A Very Wild And Positive Week; Where Was The Institutional Buying?

The weak GDP report was taken as great news and sent stocks soaring on Friday, with all the indexes making significant gains.

The SP 600 led to the upside with a 2% gain, the Nasdaq followed with a 1.9% gain, the SP 500 and Dow Jones Industrial Average finished 1.2% and 1.1% higher respectively.

Volume came in much lower on the Nasdaq and on the NYSE. This low volume clearly shows that institutional investors were not buying stocks. Instead this had the classic look of an EOM markup, short covering, and oversold bounce. Breadth was positive on the NYSE by a 4-to-1 margin and by a 2-to-1 margin on the Nasdaq.

This rally on Friday helped cap off a very bullish week for stocks. For the Dow Jones Industrial Average it was the best weekly gain since November 2004. It sure seemed like a very bullish week, unless you actually look at a lot of charts. If you did that you were certainly confused as to how the market could of possibly been up this week, much less the Dow having the best week in a year and a half.

I have to admit, this market, even with this weeks gains is just all wrong. Two huge rallies on volume lower than the day before clearly shows that the big boys were not playing. The volume was not even above the 50 dma on either of the two day rallies in the Nasdaq. This also came with both indexes each having one very obvious day of distribution during the rally. This is not what you see at the beginning of a raging bull market. This is what you see in oversold bounces in downtrending markets.

And the fact that there are charts breaking down everywhere supports the fact that this market is not in the best of situations. You simply have more charts setting up in calm bases with accumulation days. Instead during this uptrend my short scans are thick and my long scans are producing stocks zooming out of ugly, sloppy, choppy, and bases full of distribution with little accumulation. This is not what you see in the rallies that launch major bull markets. Do you think stocks looked like this in March 2003? Do you even think there was this many ugly charts at the October 2002 bottom? Nope. These charts tell me there is more room to go on the downside or there is more time needed to go sideways before any rally can happen. These charts in the Gold, Steal, Oil, and other commodity sectors also have the look of Internet stocks in March/April 2000 and Sept/Oct 2000.

If you look at the charts of the past leaders of the bull market (commodity stocks), you will see that the past few months have been hell for these stocks. The big money is leaving them and the dumb money is buying all the Gold infomercials, Oil infomercials, and Jim Cramer favorites. The smart money is selling to the mass public and they are moving to cash because there is no clear rotation into any true leaders. I will say it again, Food and Beverage stocks are not bull market leaders. They are defensive safety nets in bear markets.

Don't let these low volume rallies fool you into being suckered in. This market is still being sold. Trust me, the stocks that race out with 100% plus gains will breakout after an uptrend and follow-through days are given. Just look at March 2003. The Nasdaq was up 10% in three days. How many traders do you think said this? "Oh man, I missed the bottom. It is too late now. Dang it." Trust me, a ton did. I remember clearly! What did the Nasdaq do after those three days? How many stocks went up over 100% in less than six months? This is rhetorical. I am sure you know the answers.

This week caught me off-guard but one thing remains true. Everytime I think the market is about to collapse or explode short-term, I invariably taking that position at the exact bottom or top. I am the master of mental capitulation.

We will see if all this good news last for the indexes. The indexes are in better shape than last week and last month but it is still very ugly out there in the land of individual stocks. It still isn't time to go all-in yet.

Have a great Sunday and I will see you on Investors Paradise off and on during the day. Stay positive and diligent. There is always a bull market after a bear market. Always. This isn't 1929!


Portfolio Holdings: Long - 61 stocks Short - 82 stocks.

New Swing Longs: DJO HWAY WTNY ZONS

New Swing Shorts: USU CI AHG

Longs Outperforming: TWTC-135 CVO-120 TFR-103 WNR IHS-56 PAY-37 UARM SEIC BOT ITG CTCI-71 VLG-33 LMT HMSY MO JTX BWP RNST IGT TRMA MGLN USEY-32 TYL-27 DLP RMR BMR DUCK

Shorts Outperforming: CRXL MAFB TXRH PII CXG OPTN RS STLD CPF AGP EXBD LHO SYNA RRGB

Stocks On Radar Screen: PVTB HEI IMA STEC

Cover Shorts: RTP EWG TM CATY GVA STNR

Thursday, July 27, 2006

SP 600 and Nasdaq Lead The Market Lower On Heavier Volume; Stocks Are Breaking Down Everywhere.

Good earnings from XOM wasn't enough to keep stocks afloat. After a good start for the indexes, the markets decided enough was enough and rolled over to finish the day on a negative tone.

The SP 600 led to the downside with a 1.2% decline, the Nasdaq followed with a .8% loss, the SP 500 fell .4%, and the Dow Jones Industrial Average was down a couple of ticks.

Volume picked up on the Nasdaq and was ever so slightly higher on the NYSE. The losses with a pickup in volume on the Nasdaq gives the Nasdaq its second distribution day since the rally tried to start on the 18th. This pretty much ends the rally attempt. You don't want to see two distribution days before a follow-through.

Breadth was negative on the NYSE by a 9-to-7 margin and negative on the Nassy by a 3-to-2 margin.

Now as for the market I can say that after today it looks as ugly as I have seen it since 2002. I simply have not seen so many darn ugly charts in a long time. There are breakdowns everywhere. And when I say everywhere I mean everywhere.

If it is the former leaders of small caps, steel stocks, gold stocks, or even those oil stocks, most stocks have CLEARLY topped in those sectors and there is only one direction to go after three years of nothing but gains; down. The current leadership of the IBD 100 index gets killed every week too. The new stocks that then make it to the list are simply gone the next week. The breakdown in all the DJ Transport stocks and Basic Materials stocks and indexes today is another horrible tell that the market is not healthy. Then lets look at the defensive HMO sector. That got whacked too! Everything and I mean everything is getting sold. How does the SOX index look? How does the Nasdaq look? What about the recent breakouts in stocks with decent bases of BIDU and PMTI? Did those work? Nope. Not much is working.

What is working are your typical bear market sectors. The Utility-Gas and Utility-Electricity index is just FLYING up the list of top sectors during the recent three months. Then your top sector right now is the Food-Flour & Grain group. That sector is leading along with the Beverage-Soft Drink, Food-Dairy, Banks-Southeast, West, Northeast, Tobacco, Telecom-Services, Media-Cable, Medical-Nursing, Medical/Dental-Services, and the whole Leisure group. THIS IS BEAR MARKET LEADERSHIP! These stocks will go up but they normally don't go up in a smooth fashion. If you look at my list of longs you will notice something...most of them are in the top sectors. Odd! As Cramer says there is always a bull market somewhere. That may be true but how choppy and wild of a ride is that bull market.

I still think it is best to stay in cash and keep it heavy for the next real bull market. Then you can gun it and produce HUGE gains. Or you can trade yourself to death and drain the account slowly as you pay your commissions to your favorite broker. They are people too. They have families to feed.

So with all this data I still say: stay patient, calm, keep a smile on your face and keep your cash level high. This too shall pass and the skies will open up a fantastic bull market. Never sell America short, long-term.

Aloha and have a great Friday. I will see you at Investors Paradise, where I post charts and get in depth on the market. If you want more, you can't afford to not be there.


New Swing Longs: NONE

New Swing Shorts: CGX IJS LHO IJT HYDL DRIV SYNA RRGB NCC RACK FDX

Longs Outperforming: AKAM-130 STNR CTV BOT CTCI-67 LMT PAY-31 SEIC VLG-31 MO BWP TYL FORR DLP ABI GISX BSML

Shorts Outperforming: SWC JOYG BPFH ELY USG WSM RTP RES AVID MEOH MAFB BTH APOL GYI TXRH XNPT PBE MAS PII CXG POOL PWC VO OPTN IYT SUPX NTE GE WFSL PDCO ESIO C AME HTLD VXF VB WTI WERN FRC RS DSL CATY AF WTFC HMY IFX X STLD CPF MAR AGP LDSH EXBD NCI

Stocks On Radar Screen: STR CTV SWY BRR LBIX IMAX STEC

Cover Shorts: FRZ AB HVT

Wednesday, July 26, 2006

Late Day Pause Stops Most Indexes From Making It Three Days In A Row Of Gains.

After two days of nice gains stocks finally ended it with a last hour selloff to finish the indexes in the red. Earnings were the blame of the day for the media.

The SP 600 led to the downside with a .56% loss, followed by the Nasdaq's .17% loss, the SP 500 lost .04%, and the Dow Jones Industrial Average lost .01%.

Volume rose across the board and breadth was positive on both the NYSE and the Nassdaq by a 8.5-to-7 margin.

The stock market and stocks overall are still kind of crazy in this earnings environment. If you are a new investor I hope you are still in cash as this is not the kind of market environment to be trading in. I am not sure why I am even doing it. Probably just to satisfy my gambling addiction. I know it will pay off. It always has before. But staying in cash for new traders is better than driving yourself crazy trying to make money in a market like this. It is better to just wait for an uptrend to be firmly established and for great stocks to breakout from sound bases.

Reading some good books or reviewing your past trades that have not worked out is probably the best advice I can give traders right now. There are some wall-street classics out there that are MUST reads. And if you have not read them yet this is the kind of market that you want to absorb as much info as you can. That way you will be ready for the next uptrend. And during that uptrend you can focus on making a ton of money instead of trying to learn how to make some money.

The market is still oversold on all the oscillators. This suggest that the recent rally has not run its course yet and that there is still more time for the market to make some gains. This market is acting better on this bounce this time around but I still wouldn't trust this rally to turn into "the rally." We are still in an intermediate downtrend on all the averages. It doesn't pay to fight the trend.

Don't commit hardcore one way or the other, right now. Some longs are acting well, some shorts are acting well, and some longs and shorts are not acting well. Blah.

If we get a pullback and hold the recent lows and start to rally again we may see some nice gains in some pretty charts that I am long. I just wouldn't bet the farm on it.

Stay positive and know this too shall pass. It has been a rough three days on multiple fronts and I am still fighting. Fight with me. It is the best defense against this ugly market. I would never sell me short! Are you the kind of trader that is basing right now and are ready to explod to the upside in a bull market; or are you just taking a rest before the final breakdown? Readers of this blog and followers of the CANSLIM system never give up. Don't you either!

New Swing Longs: WNR JLL ILC SMTX

New Swing Shorts: AGP RJF MAR BFAM LDSH STNR KEX NCI EXBD DDE

**For charts and more information on longs and shorts, go to Investors Paradise.

Longs Outperforming: OMNI-186 TWTC-129 KNOL-152 HMSY SEIC VLG-30 BWP JTX ALTH IDEV EYE AMV

Shorts Outperforming: GYI JOYG WSM MEOH APOL TXRH NAFC SUPX CSX BPFH USG ELY AMAT RES MAFB FRZ CTCO XNPT MAS PII CXG RCNI POOL PWC OPTN IYT TM NTE GE WFSL HTLD BLK HCBK WERN VB RS CAT WTFC CNI DSL CATY AF GVA IFX FLR CPF XPRSA

Stocks On Radar Screen: BER DXPE AXE NSSC TCK PETD RA FRX HEI DIGE ALY BRR IDTI CHINA DIL CONR STEC TPX SWIR TDS PR CSL ATRM HEIA

Covering Shorts: IKN ULTI MWIV OIH

Tuesday, July 25, 2006

Last Hour Rally Gives Indexes Nice Gains On Higher Volume; Where Are All My Pretty Charts?

A final hour liftoff helped stocks overcome a lazy to negative day after an early morning spike which was immediately sold. This was a nice continuation of yesterday's move.

The SP 600 led the way with a 1.3% gain, the SP 500 and Nasdaq followed with a .6% gain, and the Dow Jones Industrial Average rose .5%.

Volume was higher on both the NYSE and the Nasdaq. The Nasdaq volume was just a tad higher but it was higher none the less. Breadth was positive on the NYSE by a 2-to-1 margin and was positive on the Nasdaq by a 3-to-2 margin.

This market is starting to act like it wants to put in a short term bottom. This action along with the oversold readings on a lot of oscillators and some sentiment indicators getting a little ahead of themselves looks good for further upside. I just wouldn't expect this to be the bottom that sets us up for a huge run to new all time highs. There simply is not the right kind of leadership for that kind of a rally. However, the strong closes are a positive and is a starting point.

Earnings are dominating the headlines and all the stocks gapping up and down on my charts is my signal that the market is still not the kind of environment I want to go all-in. If I had no way to receive any news I would still know it was earnings season (even if I couldn't see the months) because the amount of gaps up and down and the percentages are just in such abundance that you can tell it is earnings season.

So we need to just play a little, if you must play at all. Keeping cash heavy even though the indexes are going up is still the smart play. Trust me, Jesse Livermore, Bernard Baruch, Nicolas Darvas, and William O Neil wouldn't or is not investing in this market. They know it is better to wait till all the stars line up. Trust me when that moment happens, like always, I will let you know.

Stay positive and great luck out there. I will hopefully be back in action tomorrow.

Investors Paradise was hacked and my forum was the only one compromised. I guess that is the highest form of flattery: being attacked. Hacking is a form of terrorism and I laugh in the face of terrorism. We will be back up and running and even if all the great conversations are compromised for good it does not matter. We will build brand new again on my forum. How does that sound, guy who hacked me? LOL.

My whole life has been nothing but one big success story after extremely tragic situations. I have no family and after being clinically dead twice via two vicious accidents when I was in between the age of 16-17 things like this don't even phase me. This is nothing. Thank you for cleaning up my forum, hacker. You will never win. I always win in life.

New Swing Longs: NONE

New swing Shorts: HNR CPF VLTR XPRSA -- keep these very small. I will try to post charts on here later.

Longs Outperforming: TTG OMNI-163 KNOL-148 ITG LMT AKAM-100 TRMA BWP RNST CXW IHS-57 MO HMSY SEIC BIDU IGT PAY-34 ALTH PMTR-83 BMR BAM-32 TYL HNZ

Shorts Outperforming: ZRAN AMAT MAFB BTH APOL ITWO AB EWG RCNI OPTN IYT SUPX C HCBK HVT WERN CSX FRC WTFC CNI IFX

Stocks On Radar Screen: NONE

Covering Shorts (for your analysis): UPL EWQ VV RCII MENT SII NEM

Monday, July 24, 2006

Huge Rally On Lower Volume; Bulls Still Haven't Proven Anything.

Today was a very strong day for the markets with stocks making huge gains. However, the volume fell across the board and there wasn't much leadership other than defensive sectors. This could be the start of an attempted rally but more time will be needed before it is proven.

It was a great day today but the trend is still down on the Nasdaq and SP 600. The SP 500 is in better shape but it isn't in a good techincal picture either. If you haven't read my last 10 post please do. It will go over EVERYTHING technical about this market.

It was a good day but don't start buying everything you see ticking up. I am sure we are not done on the downside by just the simple action in the indexes.

Please, once again, read the last 10 post it will put this market in perspective.

I apologize about the extremely short post. Today was a bad day. Maui lost wireless internet and cell phone connections, westside Maui lost internet cable connection, and I sliced my finger open today. That along with my account taking a hit makes this one of the worst overall days of the year for me.

I think it is just best to wrap it up and get on with tomorrow. Great luck out there and stay positive. I know I have to!

New Swing Longs: IGT BOT SZE DUCK--to see the charts of longs and shorts go to Investors Paradise.

New Swing Shorts: STLD

Longs Outperforming: ABFS AKAM-96 UARM RNST BWP OMNI-151 IHS-56 CTIC-72 ITG JTX HSR-66 DGX TRMA PAY-33 HMSY VLG CXW BIDU CVO-118 TYL DDS GEF DLP PMTR-77 SEIC TTG

Shorts Outperforming: MEOH ULTI DSL WTFC AF FWLT

Stocks On Radar Screen: DIGE IMA BFIN BID RBN GGI

Saturday, July 22, 2006

It Sure Is Nice Being On The Correct Side Of The Market; Stocks Continue Selloff.

It was another day of losses for the major market indexes, with the blame being put on AMD's earnings miss and DELL's profit warning. The funny thing about all of this is that if the markets would have been up the first sentence would have read like this. It was a day of gains for the major market indexes, with GOOG and MSFT's positive earnings surprises helping send stocks higher. As you can see this is all just baloney and is necessary for the news media to have something to report on. The fact of the matter was that there were more sellers and people offering stock than buyers and people bidding on stocks. But I guess if you said that everyday nobody would watch CNBC.

Anyways...The SP 600 led to the downside with a 1.6% loss, followed by the Nasdaq's .9% loss, the SP 500's .7% loss, and the Dow Jones Industrial Average's .5% loss. The biggest nastiest hit was to the Semiconductor Index with a 4.8% semi-crash.

Volume was higher on both the NYSE and the Nasdaq and was also well above the 50 day volume average on both exchanges. This higher volume selloff, with the indexes closing near the lows of the day in the bottom half of their intraday range, and indexes falling more than .5% give them another distribution day.

Breadth was negative by a 2-to-1 margin on the NYSE and by a 3-to-1 margin on the Nasdaq.

It was a pretty crazy week with another one day Fed blastoff followed by a much quicker failure--just like the missile launch of the tapeodong 2 missile by the brutal and disgusting North Korea regime--that saw the Nasdaq and SP 600 make closing lows for the year. This negative action along with the lack of new breakouts has basically ended any rally attempt that any of the indexes have tried to produce since that crazy one day rocket ship move on the indexes. But the NYSE and SP-500 are showing a bit of strength since it is home to safe havens and big-caps which normally get a bid during downtrending markets.

However, with that itty bit of strength comes some negative observations on the indexes. The Nasdaq is in a solid downtrend with a "death cross" confirmation, the SP-500 confirmed its downtrend with a "death cross" move of its own on Wednesday, and now the SP-600 is one or two days away from having the confirmation signal and the Dow Jones is about five days away from confirming. With all indexes in a downtrend with "death crosses" on ALL indexes you can be sure that being long is the wrong play period! Time is going to be needed to fix this damage and get a rotation into the new leaders. For now, the weak links rule. Hence the new long in Altria (MO).

The trend is down. I don't know what else to say or how else to say it. This is the time to stay patient, keep cash on hand, and just wait till the market follows-through with leading stocks breaking out of fresh bases in exciting industries. We are no where near that time yet. Not with the Food, Beverage, HMO, Medical, Leisure, Transportation, and Tobacco stocks taking the lead. These are bear market leaders.

There will be plenty of action next week as earnings are now rolling out in full force and the war in the Middle East, of course, will keep the market distracted and busy. Don't be a gloom-and-doomer! Stay positive and patient and KNOW that another bull market will come around the corner. It may not be this month or next month but until then make some money and/or keep your money idle so when the perfect moment comes you will have plenty of capital to put to work.

Now, if you are shorting this market with me, congratulations. It has made up for all those BS small longs I have been taking and a WHOLE LOT MORE. If there is more to come, all-time highs in the accounts shouldn't be too far away. Not bad in a market with the Nasdaq down 15% and the SOX index down 30%. And heck if I get a horrible reversal that forces me to cover all my shorts do you think I will be upset? Of course not! Because then I can go long, if there are plenty of HOT charts setting up, and make real money. Remember, the most a short can go down is 99.9%; the most a stock can go up...let's just use HANS from 1996-now as an example...53,000%. I like my chances on the long side!!!!!!

New Swing Longs: MO -- for more info and charts on longs and shorts go to Investors Paradise. Please sign-up to post and chat with me.

New Swing Shorts: CAT WTFC LFUS AF MENT CATY DSL CNI HMY TCC FLR SII GVA IFX X FWLT NEM

Longs Outperforming: PMTR-74 DGX IHS-50 CPY ABFS BWP MGLN CVO-109 BMRN DSGX-51

Shorts Outperforming: CRXL SWC JOYG BPFH USG ELY WSM AMAT RTP RES AVID MEOH IKN ZRAN MAFB FRZ ISCA BBBY GTRC ITWO CTCO GYI XNPT PBE MAS ULTI PII CXG AMMD AB EWG RCNI POOL UPL DB EWQ PWC VO IYT TM SUPX NTE GE WFSL PDCO ESIO C AME HTLD BLK OIH OEF MWIV VV HCBK VXF VB HVT WTI CSX RCII FRC

*****I went short OIH intraday on Thursday and did not include it in my blog. However, I posted I went short this stock on my longs/shorts open forum at IP. So full disclosure--as always--was given before/during the trade.*****

Stocks On Radar: REY

Thursday, July 20, 2006

Another Fed Induced Rally Fails On The Nasdaq And Hits Other Indexes Hard; No Surprise To The Readers Of This Blog.

INTC and the June Fed minutes showing uncertainty amongst members on the future path of interest rates held stocks hostage today, sending all the indexes lower and erasing all of the Nasdaq's previous day's gains. That kind of action is not what you want to see on day after a rally. Not a healthy day at all.

At the close, the SP 600 led to the downside with a 2.9% haircut, followed by the SOX index 2.5% loss, the Nasdaq lost 2%, the SP 500 fell .9%, and the Dow Jones Industrial Average retreated .8%.

Volume was lower across the board but who cares when the selling was so brutal that it erases all of the previous days gains. Breadth was negative on the NYSE by a 2-to-1 margin and by a 3-to-1 margin on the Nasdaq.

The indexes are all still in a solid downtrend and it shows how silly it is to try to anticipate an upcoming rally by jumping in too early and getting too long too fast. It is simply a losing battle and not the kind of fight I want to get involved with. This imediate reversal just confirms how eager sellers and trapped longs are to dump stocks that they did not sell when the indexes were falling hard.

If the after-hours is any indication of tomorrow, there should be a slightly positive tone. GOOG and MSFT had overall positive reports and we shall see how long this good news last. For some odd reason I am not too confident that it will. But I wouldn't mind being proven wrong. It is very humbling.

This is a crazy market for most traders. Hopefully, CANSLIM investors have stayed out of this madness or have been shorting the old leaders that have broken down from topping patterns. If you have been reading this blog, I have said numerous times not to be trading in this market environment. Especially if you are a newbie. I hope you have heeded my call and did not jump in too early AGAIN and then got burned AGAIN today. If you did, all I can say is stick with and learn from your mistakes. Don't repeat them. The smart money stays on the sidelines when the odds are not completely stacked in his/her favor. Right now the table is loaded with sharks.

Keep calm, stay patient and positive. This too shall pass. Great luck tomorrow. I shall see you at Investors Paradise.

New Swing Longs: NONE

New Swing Shorts: OEF MWIV VV HCBK VXF VB HVT WTI WERN CSX RCII FRC RS

Longs Outperforming: GMTC UARM RNST LMT Q-71

Shorts Outperforming: CRXL SWC JOYG BPFH USG ELY WSM AMAT RTP RES MEOH IKN ZRAN MAFB APOL FRZ ISCA GTRC ITWO CTCO XNPT PBE MAS TXRH ULTI PII CXG AMMD AB EWG RCNI POOL UPL DB EWQ PWC VO OTPN IYT PLCM SUPX GE WFSL PDCO ESIO C AME HTLD BLK

Stocks On Radar Screen: BOT IGT DMX

Wednesday, July 19, 2006

Another Fed Induced Oversold Rally Produces Huge Gains For All Major Stock Indexes.

There were plenty of reasons for stocks to rally today. The most obvious one was that the market was very oversold. But that along with the less hawkish comments by Ben Bernanke and the good earnings news from IBM and JPM really helped propel the indexes higher all day long.

The biggest gain belonged to the Russell 2000 with a 3% gain, the SP 600 followed with a 2.9% gain, the Semiconductor index rallied 2.3%, the Dow Jones Industrial Average rose 2% and regained its 200 dma, the SP 500 gained 1.9%, and the Nasdaq was the laggard with a 1.8% gain.

These big price gains seem to recently come on the days when the Fed is making interest rate comments. If history repeats itself, and is any guide for the future, this rally might not have very far to go and/or will not last that long.

Volume was much higher on the Nasdaq and was moderately higher on the NYSE. Nothing too extreme to indicate funds were trampling over each other to take stock. Advancers beat decliners on the Nasdaq by a 3.5-to-1 margin and on the NYSE by a 6.5-to-1 margin.

The interesting thing about today's trading was the revelation that YHOO and GOOG simply don't seem to matter to the Nasdaq and the market anymore. The big hits both of these stocks took gave me the impression any bounce would be weak because of the hits these stocks took. I was proven very wrong. It looks like the market has turned its attention away from these past leaders.

Looking through my charts, I still don't see any beautiful bases with breakouts right around the corner, in new exciting leading sectors. But that could change with another month of constructive gains. However, as of now, there are no good looking charts with good fundamentals breaking out. All the breakouts I am seeing are from ugly, wild, and choppy bases. At the same time, it is not wise to short, as we are way oversold.

Let's get ready for another day of either wild and exciting action or a dead-quiet boring trading session. No matter what the day brings, we still know what the trends are. Short-term is up and long-term, intermediate, and sub-intermediate is down. But basically it is flop, chop, chop, flop, no trend, up, down, flop, chop, and flop.

Great luck out there and I will see you at Investors Paradise.

New Swing Longs: TBBK RMR

New Swing Shorts: NONE

Longs Outperforming: IHS-56 GMTC CTCI-87 PMTR-75 HSR-73 UARM ITG OMNI-164 LRCX-33 SMSI-69 HMSY TZOO GPIC-27 RNST PAY-36 ABI SEIC BWP ABFS BMR CXW LMT LEAP DGX CPY AKAM-106 GISX TYL CVO-109 IDEV DDS Q-70 ALTH GEF HNZ MGLN

Shorts Outperforming: NTE

Stocks On Radar Screen: VLY BOT TAL TCK WOLF FRP WRE GGI

Short Crusher: PKG CBSS BKUNA -- it happens.

Tuesday, July 18, 2006

Stock Indexes Stage A Nice Intraday Oversold Bounce, "Hoping" On Positives Comments From The Fed.

Stocks staged a very nice intraday reversal, reversing what was yet another day of indexes in the red. Thankfully, a breath of fresh air came with less than two hours to go as indexes reversed rallying to the end of the day.

The Dow Jones Industrial Average was up .5%, the SP 600 was up .4%, the Nasdaq rose .3%, and the SP 500 stopped the bleeding and closed higher by .2%.

Volume was higher on both the NYSE and the Nasdaq, marking this as day one of an attempted rally. However, I don't care about the first three days of any rally. It is the fourth to tenth day that interest me. Breadth was positive on the NYSE by a 9-to-8 margin and was positive on the Nasdaq by a 8-to-7 margin. Not a bad day but after hours...

...YHOO took a nice hit along with GOOG. That will surely weigh on the indexes in the morning. A quick rebound from this afterhours hit would be very positive for stocks and this oversold bounce. However, I would not count on this rally lasting. Something just doesn't feel right. It is the poor leadership or lack of leadership I should say.

This market is just being hit left and right with news items and is completely under siege. Tomorrow we have two more big economic events: The CPI and the Fed's outlook. This along with the conflict in the Middle East is simply too much for the market to handle in a rational fashion right now. Throw some earnings reports on top of that and you have a lot to deal with.

This market is simply sick but is oversold on many oscillators once again indicating that there should be a short term oversold rally. However, I wouldn't expect much more than that. This market is simply sick and the previous two rally attempts have failed. While this happened, oddly, bullishness picked up last week on all the sentiment surveys. This is just not what you see at market bottoms. More time is needed.

But the market is oversold and the Ben Bernanke comments could be the fuel needed to help the market bounce. This bounce would also coincide nicely with all the questions I am getting on shorts recently. It appears that once something is obvious to everyone we may have run our course on a short term basis. That appears to be happening now, in the short term.

Whatever happens, just make sure you keep cash extremely heavy and keep all longs very small if you must take them. And only short if you have proven you can make money on the long side first or if you have proven to yourself that you do know what you are seeing on the charts.

This market is still in a solid downtrend but is very oversold. A bounce should be expected but until I see more pretty charts (which simply do not exist right now) and less stocks setting up in EXCELLENT short patterns I am staying patient and keeping all buys small and holding my shorts.

Great luck out there. I want to take another vacation! Keep smiling and stay positive.

New Swing Longs: TTG

New Swing Shorts: WPS BLK ICE HTLD

Longs Outperforming: GPIC HSR-60 RNST JTX ABI BMR CTCI-71 HMSY AKAM-106 IHS-39 CXW BWP ABFS CTXS-33 SEIC DGX LRCX-25 CPY KHDH TRMA DLP ATML AMV

Shorts Outperforming Market: NTE SWC JOYG USG ELY WSM RTP TRI MEOH IKN ZRAN BTH APOL ISCA GTRC GYI XNPT MAS TXRH ULTI CXG AMMD POOL DB EWQ PWC PKG VO TM SUPX PDCO

Stocks On Radar Screen: RBN

Monday, July 17, 2006

A Quiet Flat Day On Lower Volume For Stocks Starts The Week Off With A Snore.

Stock indexes did their best to make sure traders got plenty of rest during the day, today. This was another boring day in the middle of what sometimes can be a very exciting dramatic summer stock market.

The SP 500, Dow, and Nasdaq all moved .14% or less. The SP 600 led to the downside, losing .9%.

Volume was lower on both the NYSE and the Nasdaq. Decliners led advancers on the NYSE by a 10-to-7 margin. Breadth was negative on the Nasdaq by a 5-to-3 margin.

The war between Israel and Hezbollah is still, as should be, dominating the headlines. The good news is that we did not see more selling off today as a result of this conflict. However, for the near future, this story will probably dominate the headlines over any earnings and Fed report.

This market sure lacks good news. If you are a contrarian that should be good for a short term bounce. If we get an oversold bounce or not it doesn't matter really. The big obvious trend is down and the big money is made riding the big trend. So any oversold bounce should just set some stocks up for good short sales.

This is still a very nasty market and traders should not be taking any big new long positions since 75% of all stocks follow the market. The trend is down and that is enough to know to keep the powder dry.

Stay positive and keep cool. Things will change. Maybe not soon but it will change one day. Use this time to educate yourself and review your trading during this downturn so you know next time NOT TO TRADE when you are not in a bull market!!!!!

New Swing Longs: BIDU JTX

New Swing Shorts: AME C

Longs Outperforming: SMSI-60 ABI DGX RNST BWP ABFS LMT UARM CXW TIII ATML

Shorts Outperforming: CRXL SWC JOYG BPFH USG ELY WSM RTP RES IKN VCG ZRAN MAFB BBBY XNPT PBE NAFC ULTI CXG EWG RCNI POOL UPL DB EWQ PWC VO OPTN IYT TM SUPX NTE WFSL PDCO

Stocks On Radar Screen: TTG

Saturday, July 15, 2006

The Ugly Week--That Saw The Rally Attempt Fail-- Is Over; Happy Belated Bastille Day (The French Could Fight????)

The ware in the Middle East and the rising oil prices dominated the headlines all day, on Friday. Of course, that meant, with the downtrend already in place that stocks sold off again.

The SP 600 led the fall with a 1.4% loss, the Dow Jones fell 1%, the Nasdaq fell .8%, and the SP 500 fell .5%.

Volume fell on both the NYSE and the Nasdaq. Breadth was negative by a 2-to-1 margin on both indexes. Pretty much a negative day with not a lot of players around. But volume was still above the 50 day volume average on the NYSE.

This was a nasty week that saw the Nasdaq and SP 600 fall 4%, the Dow fall 3%, and the SP fall 2%. I don't think words are needed for that performance.

The indexes continue their march below their 50 and 200 day moving averages and all are close to committing the ultimate "death cross" that have not already done so. This market is very very bad for investors. I am seeing some weekly, monthly, and quarterly negative divergences and signals being given. This only adds to the negative price and volume action of the market. Not good at all.

The market tried when it followed-through on June 29 but a month after the start of the rally attempt we now have the Nasdaq trading at new lows and the other indexes trading horribly and ready to join the Nasdaq in the "death cross"/new lows camp.

This week should be wild and full of surprises. We have the war in the Middle East, North Korea resolutions, economic data, some Fed excitement, and most importantly EARNINGS! We will start to get our first full batch of earnings on Monday.

No matter what happens this week, remember, this will pass and another bull market will be around the corner. I don't know if the corner is three, six, nine, or twelve months away. But trust me!! there will be another bull market full of stocks making HUGE gains.

I shall see you at Investors Paradise. Great luck out there.


New Swing Longs: LMT ABFS

New Swing Shorts: CBSS BKUNA GE WFSL PDCO ESIO NTE

For charts on longs and shorts go to Investors Paradise.

Establishing A Position/Poking (DO NOT REPEAT THIS TRADE): BDCO

Longs Outperforming: TRMA AKAM-104 GMTC CXW LRCX-26 KHDH TZOO

Shorts Outperforming: CRXL JOYG BPFH USG ELY WSM AMAT TRI MEOH VCG ZRAN MAFB BTH APOL FRZ ISCA BBBY GYI XNPT PBE MAS PII CXG AMMD EWG RCNI POOL TRMK DB EWQ PWC VO OPTN IYT TM PLCM SUPX

Stocks On Radar: RGNC TTG FRGB

Thursday, July 13, 2006

To No One's Surprise That Reads This Blog, The Rally Has Failed.

Oh my goodness, there was a lot of tension and angst today. With oil prices flying, earnings concerns, and all the problems Hezbollah and Hamas has created for Israel, markets simply were overwhelmed and sellers took control.

The SP 600 fell 1.9%, the Nasdaq fell 1.7%, the Dow Jones Industrial Average fell 1.5%, and the SP 500 fell 1.3%.

Volume was higher on both the NYSE and the Nasdaq. It was also above the 50 day volume average showing selling conviction by institutional investors. This pickup in volume along with the June lows being breached on the Nasdaq officially ends this rally.

Breadth was very negative to go along with the heavy volume. Decliners led on the NYSE by 3-to-1 margin over advancers and on the Nasdaq it was worse with decliners over advancers by a 4-to-1 margin.

All the talk right now is obviously concentrated on the Middle East. What is taking place over there is without a doubt having an effect on the market. You can even go so far as to say the market saw this coming back in early May. That is when the bull market that began in March 17th ended. As IBD pointed out today historically bull markets rarely last longer than three to four years. How do I know it is over? I don't but this is the first time since the start of the rally I have seen this kind of selling WITHOUT seeing any leaders in tech, innovative, high growth industries showing up on the scans. Instead I am seeing only defensive laggard groups. When these start outperforming with stocks rolling over, you can be assured something is wrong with the market.

The Dow Jones, SP 600, NYSE, and SP 500 have now all failed their 50 dma's and have now broken down through the 200 dma on heavier volume. The death cross has already been given on the Nasdaq and now these other indexes are about to give the late but strong signal that the market is in for some rough times still.

Another stat that blew my mind this morning was the II Survey of newsletter writers. It showed bulls jumping to 42% and bears falling to 33%. That along with the AAII survey showing bulls increasing tells me that there is not nearly enough extreme bearishness in the sentiment surveys to give us a real rally.

It is ugly and the Middle East situation is ugly. Don't blame Israel. They didn't kidnap anyone! Don't let the Middle East ugliness get to you. Keep your head about you and stay calm in the face of fear. Like the RevShark said tonight, "the one great thing certainly about the stock market is that things will eventually change." God isn't that the truth. There is always another bull market around the corner. Is it going to be in three months, six months, one year, or two years? I don't know and I don't care. I will let the market decide for me.

Even in this poor market, my account made significant gains today. When you are on the right side of the market, no matter what direction it is in, like today, it feels pretty darn good. I hope everyone is learning a lot from me during this downtrend. Since I started this blog I have not missed one change in the intermediate trend of the market. I truly hope people have been reading this blog and taking its advice and have avoided the pain that a lot of traders I know are going through. God knows that by the time this downtrend is over, I will be at all time highs in my account. Keep the emotions on the side and play the trend or stay in cash.

Great luck out there. I will see you tomorrow at Investors Paradise.

New Swing Longs: NONE

New Swing Shorts: IYT TM PWC EWQ PLCM PKG VO OPTN CHE SUPX

Longs Outperforming: PAY-38 CTXS-33 CTCI-69 CPY HMSY KHDH

Shorts Outperforming: RES CRXL SWC JOYG DB BPFH USG ELY WSM AMAT RTP TRI AVID MEOH VCG ZRAN MAFB BTH APOL FRZ ISCA GTRC ITWO CTCO GYI XNPT PBE MAS TXRH NAFC ULTI PII CXG AMMD AB EWG RCNI POOL TRMK UPL

Stocks On Radar Screen: RGNC USO

Wednesday, July 12, 2006

Indexes Erase Yesterday's Gains On A Nasty Selloff; Volume Was Lower, Easing The Pain.

Stocks did not bask in the rally for long did they? The gains from yesterday were immediately reversed today. The blame, today, was on Iran, Lebanon, and the terrorist Hamas government.

The Nasdaq fell 1.8%, the SP 600 fell 1.7%, and the Dow Jones Industrial Average and SP 500 fell 1.1%.

Volume was lower on both the NYSE and Nasdaq. However, that is not much comfort to those stuck in longs going the wrong way. Breadth was negative on the NYSE by a 11-to-5 margin and negative on the Nasdaq by a 3-to-1 margin.

We already know the technical situation in the Nasdaq is bad as it is in a major downtrend and its moving averages have already given the "death cross" signal. Now the SP 500, 600, NYSE, and DJIA are failing at the 50 dma. If these indexes rollover and wipe out the lows on June 14th ending the follow-through, it wont be much longer that the 50 dma will cross below the 200 dma signaling the "death cross" for these averages. To see anything bullish in this, other than the fact that all bear markets have to end eventually, is simply foolish.

The two distribution days were a warning sign but the rally never really had any legs to begin with. If you go read my last 14 post you will see the sectors that were/are working in this rally attempt are the sectors you don't want to see lead a bull. That just tells you that we are about to start a bear market. Food, beverage, medical, consumer stocks do not lead during bull markets.

I guess anything can happen but I still think staying defensive, keeping cash heavy, and just being patient is the smartest thing to do. If you do make any buys, cut your losses quickly. If it reverses right after you buy it but doesn't hit your stop, you still might want to sell half. This is not a kind market to longs.

Trust me if things change I will be the first to jump on the longs that breakout of nice bases. But until I see more stocks like that I will wait. I know a couple of traders that I am normally right on point with all the time diverge in their opinions on this market. One seems to think it is too negative out there. Maybe it is but I still have not seen the new Institutional Investor Newsletter Survey or the AAII survey of bulls and bears. I know for a fact it is still not at extremes. Another thing is that all of my oscillators are overbought. MACD, McClellan, and 10 dma of adv/dec are all in territory that says stocks should go down not up.

We shall see what happens. Who knows maybe the two surveys show bears jump to new records and bulls fall to new record lows. It could happen. If that was the case, the current geopolitical environment would have me bullish. But I still don't see the charts. The charts that are working are all defensive or stocks breaking out of EXTREMELY late-stage bases. Who knows!

Have a great day and I will see you at Investors Paradise on my forums.

New Swing Longs: NONE

Adding To Long: BSML

New Swing Shorts: RCNI AMMD POOL AB EWG TRMK UPL TKLC

Longs Outperforming (IBD stocks/heavy volume move): PMTR-83 SMSI-82 KNOL-139 PAY-36 USEY-26 TZOO ITG HMSY LEAP BMR DGX BSML NWS HNZ KHDH

Shorts Outperforming: PII ULTI NAFC TXRH GTRC ZRAN JOYG SWC RES MAS PBE XNPT CTCO GYI ITWO BBBY IKN MAFB BTH APOL FRZ AVID TRI RTP AMAT ELY BPFH CRXL

Stocks On Radar Screen: FIZ

Tuesday, July 11, 2006

A Very Impressive Afternoon Rally, On Higher Volume, Gives Indexes A Positive Finish After An Ugly Start.

I was at home watching the market, reading the bad news, and just feeling tired of all the bad news so I decided to go surfing. When I returned I was sort of surprised to see a nice bullish reversal for all the indexes. This was a very nice way for stocks to end after the disgusting bombing in India.

The Nasdaq reversed a 1% loss to close up .6%, the SP 600 also finished up .6%, the SP 500 finished up .4%, and the Dow Jones Industrial Average finished up .3%

Volume was higher across the board. However, it was still below the 50 day volume average on both indexes (well the Nasdaq was even; whatever). A nice accumulation day. Breadth was positive on the NYSE by a 5-to-3 margin and positive on the Nasdaq by a 9-to-7 margin.

The supposed reason for the rally was that KLAC's CEO Rick Wallace said some great things about his companies business. This, therefore, sparked the rally that reversed the indexes off their lows and sending them higher.

This has now put the SP 500 and NYSE over their 50 dma's. This is technically a good thing but we will have to see some more follow-through off this key support/resistance line to get me to truly believe this medical, consumer product, food, and beverage rally in stocks.

The one thing I really liked was just the overall close of the indexes. Bearishness got pretty thick in the rooms I monitor today, after the India bombing, AA miss, and the Nasdaq being down 1%. It was enough to make me leave and go surf the horrible summer swell we are currently getting. Thanks a lot winds! Overall, I am pretty happy with the ending we got today. Not happy enough to make me a raging bull but happy enough to keep with my safety stock longs.

We are overbought, it is bearish out there, some shorts are working, some longs are working, some shorts are not working, some longs are not working, the SP 500 is above the 50/200 dma, and the Nasdaq is below the 50/200 dma. Do you know where the market is going to go next? If you do, why don't you let me know. I sure as the hell don't know which way we are going next. I know the short, sub-int trend is up and the intermediate, long-term trend is down. That is all I need to know.

Earnings are still coming up next week. Stay on your toes. Have a great day, I will see you at Investors Paradise.

New Swing Longs: LEAP DLP GEF XNR -- charts can be found on Investors Paradise.

New Swing Shorts: NONE

Longs Outperforming: CVO-105 PMTR-73 LRCX-32 OMNI-199 UARM CTCI-72 TZOO ITG GMTC-26 TRMA HSR-85 ABI CTXS-38 CPY BWP AKAM-107 RNST CTS TIII-30 BSML ATML EYE ECOL-37 HNZ USEY-25 ALSK KHDH UHCP

Shorts Outperforming: WSM JOYG BPFH VCG ZRAN MAFB BTH BBBY ITWO TXRH NAFC

Stocks On Radar Screen: IVAC NUVO

Monday, July 10, 2006

Markets End Mixed On A Very Quiet Session.

Stocks put in a mixed session, on Monday, as the Nasdaq closed lower while the rest of the indexes finished in the positive. The SP 500 rose .15%, the Dow Jones Industrial Average rose .12%, the SP 600 rose .04%, and the Nasdaq fell .62%.

Volume was lower on the NYSE and the Nasdaq. Breadth was positive on the NYSE by a 5-to-3 margin and lower on the Nasdaq with losers over advancers by a 8-to-7 margin.

As can be seen by simply looking at the tape today, tech stocks were much weaker than the rest of the market. The blame for this is being put on EMC as it is a big old laggard that still effects the rest of the sector. Another hit on tech stocks was Merrill Lynch downgrading the sector. However, by simply following the indexes and price action of tech stocks followers of the CANSLIM formula have been long gone tech stocks already.

The Nasdaq has been much weaker the past five sessions than the rest of the market and that can be seen by two technical indicators I use on my charts. One is the Relative Strength line vs. the SP 500. As you can see by looking at a chart of the relative strength, the Nasdaq RS line has broken to new lows below the June lows on the Nasdaq. Another negative divergence has shown up on my Moneystream indicator on TCNet. Normally, I don't notice divergences in this indicator right off the bat. But with the RS line of the Nasdaq hitting new lows along with the Moneystream line hitting new lows my interest was peaked. With both of these indicators hitting new lows, along with all the ugly stocks in the tech sector, this is supposed to signal that internals are leading the Nasdaq down.

Since the Nasdaq is still above the June lows that is still holding up this follow-through--for this follow-through to be voided the Nasdaq has to go through the June lows--it would be wise to keep new longs small and be very careful in watching the tech stocks you do own.

Now, do the indicators leading the price lower mean the Nasdaq will definitely fail? Heck no. But it is wise to take all information into consideration when making a decision. When I see this divergence, along with my shorts doing ok, defensive sectors moving to the top of the Industry list, and seeing the market short-term overbought, I stay defensive and keep my cash heavy.

However, sentiment is getting very bearish on the Nasdaq. If the bull/bear ratio of II were at more extreme levels I might think we were near a bottom. Once again, though, emotions are still not extreme. Bulls still top bears on the II and the AAII bulls jumped big after the follow-through. Not the kind of fear you see at market bottoms.

A lot of earnings reports are coming up in the coming weeks so get ready for a wild ride in some issues. Have a great day and I will see you at Investors Paradise.

New Swing Longs: NONE

New Swing Shorts: ANST PII CXG ULTI NETL

Longs Outperforming: UARM RNST ABI CPY TZOO BWP CTS CXW CBEY USEY TIII BSML DDS BMR ECOL-34 KHDH MTMD

Shorts Outperforming: SWC JOYG BPFH USG AMAT RTP RES AVID MEOH ZRAN BTH ISCA GYI XNPT PBE TXRH

Stocks On Radar: DLP LQU -- both are possible long candidates. will have to do more research.

Saturday, July 08, 2006

The Short, Yet Exhausting, Trading Week Finishes With An Ugly Selloff On Higher Volume.

A weak job report number and a nasty earnings warning from 3M were just two of the reasons given that helped spark a broad market selloff.

Tech stocks and small cap stocks helped lead the selloff. The SP 600 led to the downside with a 1.4% haircut, the Nasdaq and Dow Jones Industrial Average followed with a 1.2% loss, and the SP 500 lost .7%.

Volume was higher across the board and gave the indexes another distribution day since we got the follow-through day signal. It is only two days of distribution technically. Since one of the distribution days came right after a half-day right before the Fourth of July, it is hard to say it was one with full conviction.

Breadth was negative on the NYSE by a 5-to-3 margin and 11-to-4 on the Nasdaq.

The major market indexes have not rolled over yet but there is no doubt that we need to see some more leadership and follow-through in the next couple of weeks or else I will begin to really lose my faith in this rally. Like I said before, food, beverage, medical, and other defensive stocks are not my kind of leaders in a new bull market. These sectors will have to rotate into other sectors or I am afraid this rally will not last long.

Today was a very odd day indeed, after getting that ADP report yesterday and then getting the actual numbers today. That little bit of confusion and conflicting data really sums up the mood of traders in this market. I had a couple of traders I know get pretty upset and angry today. Not sure what that means, because they are both what I would call professional/semi-pro traders.

I am keeping it short because I have posted so much about my current mood of this market, what charts I like, and what is wrong with charts other traders are showing me that I find it self-defeating to repeat it here. Please go to Investors Paradise and take a look at all my open forums for questions and answers.

Have a great weekend and I will see you Monday on Investors Paradise.

Unless you can trade like Y.Y., stay on the sidelines.

New Swing Longs: SCIX MTMD PLC--charts can be seen at Investors Paradise.

New Swing Shorts: PBE MAS TXRH CSH NAFC

Longs Outperforming: HMSY WBMD EGOV CPY GPIC-33 CTCI-73 NWS TRMA SEIC IDEV DSGX-55

Shorts Outperforming: USG CRXL SWC GYI JOYG BPFH ELY WSM AMAT RTP RES AVID MEOH IKN MAFB APOL FRZ GTRC ITWO

Stocks On Radar Screen: TTG

Thursday, July 06, 2006

The Dow Jones Shines On An Otherwise Boring Slow Day Of Trading.

It was small gains across the board for the major market indexes. The Nasdaq, SP, and DJ all started the day with a nice rally. However, by the end of the day the Nasdaq sputtered out but the Dow Jones Industrial Average managed a very respectable close. It should be noted that the Dow Jones Industrial Average outperformance was caused by Altria (MO) and its 6% gain.

The Dow Jones Industrial Average rallied .7%, the SP 600 was up .3%, the SP 500 was up .2%, and the Nasdaq lagged with a .1% gain.

Volume was lower on the NYSE and about the same on the Nasdaq. Breadth was positive.

Today's action was pretty much random meaningless trading. The lack of trading could be due to all eyes being on the upcoming jobs report. But weren't we just saying that all eyes were on Ben and the Fed? I think so. Whatever the reason is, it doesn't matter. We just need to know there is not a lot of action right now and an observant stance is probably the best play for now, if you are new.

The upcoming jobs report is getting some negative spin due to the possibility that the Fed could take the data as an indication the economy is still on fire and more hikes are needed. To be honest I don't care what could happen I just need to know what is happening now.

What is happening now is that the markets are still under some very important major moving averages, the leaders that are breaking out are ALL in defensive sectors, there are a lot of nice charts showing up but once again they are in defensive sectors, and the follow-through from the rally attempt is still alive. Basically a mixed bag of tricks. I still think this rally has some legs but it wouldn't not surprise me at all to see us fail at some key resistance level and turn back down.

The stocks breaking out and setting up in the Medical, Food, Beverage, and Consumer Plastics sectors don't give me a lot of confidence this is going to be a major rager of a market. However, there are some nice charts offering some great patterns and gains and there is also some stocks trying to set up. If they breakout I will trade them but will still keep my defensive posture until I see better quality stocks show up on my scan.

It is still very bearish out there and a rally from here is still in the cards according to the recent trend. Be careful out there and I will see you tomorrow on Investors Paradise.

New Swing Longs: EMS BKD AMV--to see charts of new longs/shorts go to Investors Paradise.


New Swing Shorts: GYI XNPT CSC

Longs Outperforming: IHS-67 TZOO CTCI-72 GPIC-33 SYKE SEIC DGX CXW WBMD PAY-40 TSCM-171 CPY ABI AKAM-122 NWS CBEY LCC-171 FVE BMRN DMX CTS Q-81 GMTC-32 UHCP

Shorts Outperforming: SWC JOYG BPFH USG RTP MEOH VCG MAFB BTH FRZ ISCA BBBY GTRC CTCO

Stocks On Radar Screen: JOBS NICH DLP AMAG

Wednesday, July 05, 2006

North Korea's Failure Spooks Stocks; Volume Was Lower Than On Thurs/Fri Session--Positive Divergence.

Stocks gapped down at the opening, possibly on fears of the North Korea missle test or a report that came out signaling that employment data is going to be super strong and that may keep the Fed hawkish on rates.

The Nasdaq fell 1.7%, the SP 600 fell 1.2%, and the SP 500 and Dow Jones both fell around .7%.

Volume was higher than the half-day trading session on Monday but you can not compare volume to that day. I look at this volume in comparison to the Thursday and Friday session. This was obviously a very quiet day for the Nasdaq and the NYSE's volume was lower than the rallies on Thursday and Friday.

Overall, the action in stocks still looks pretty good. There were a lot of charts that came up on the scan again today that appear to be making great bases. If they breakout or not, we will not know until later.

Today's pullback does not appear to be as bad as the numbers tell. After the gap down in the morning, stock market indexes basically just meandered around the lows. By holding up it appears traders were not in a hurry to pounce on the downside momentum. It appears stocks were not bid up simply because there was a Fourth of July hangover. I know I had too much fun; I am sure a lot of other traders did too.

If buyers do not step up and we start to selloff, I would start to get nervous on this follow-through. Until I see some more selling I am going to stick with my long side bias, for now.

It will be nice to wake up tomorrow and feel refreshed, unlike today. I hope everyone had a great Fourth of July. I know I did. Have a great day and I shall see you at Investors Paradise.

New Swing Longs: CPY DMX UHCP--charts posted at Investors Paradise.

Adding To Longs: TZOO

New Swing Shorts: NONE

Longs Outperforming: TZOO HSR-107 OMNI-211 TSCM-170 LCC-160 HMSY SKIL CXW CTCI-63 DGX UARM TRMA BUF PMTR-87 SIMC BSML FSII ALTH GMTC

Shorts Outperforming: Later

Stocks On Radar Screen: BDCO LCBM

Monday, July 03, 2006

Happy Fourth Of July!

No Commentary. Fourth of July in Lahaina was a blast! Can you blame me?

See you tomorrow at IP.

New Swing Longs: SIMC--small poke. For more info and charts of longs go to Investors Paradise and click on longs.

New Swing Shorts: NONE

Longs Outperforming: IHS-59 SYKE TRMA OMNI-210 KNXA SMSI-109 PCLN ABI SKIL DDS CTCI-61 CTXS-54 UARM SEIC DGX NWS CBEY SMDI-173 HSR-93 PMTR-70 MDF SBIT-33 TIII-26 SZE

Shorts Outperforming Market: USG ELY TRI IKN ZRAN MAFB GTRC

Saturday, July 01, 2006

Russell Rebalancing Skews Volume; Stocks Hold On To Thursday's Gains.

Stocks ended Friday's session on a low note and closed down for the day, besides the SP 600. However, in only giving up a small portion of Thursday's gains you have to say that Friday was a very positive day considering what has happened to some of the more recent rallies.

The SP 600 finished up .8%, the Nasdaq closed down .1%, the SP 500 lost .2%, and the Dow Jones Industrial Average lost .3%.

Volume was a lot higher on both exchanges. But the huge trade was basically caused by the rebalancing of the Russell indexes. The tiny losses and the amount of nice charts showing up on my scans for Friday give me the obvious conclusion that this can NOT be called a distribution day. Unlike what one of my readers states, this is in fact not a distribution day.

Another obvious sign things have changed is reading "The Big Picture" in IBD and seeing that the IBD 100 rose 4.2% on Thursday and 1.3% on Friday. This along with the SP 600 performing is a very positive sign coming off of Thursday's follow-through.

One other thing I like to see is that IBD's "Big Picture" states the same thing I have noticed in my charts and analysis of stocks I had to sell that have now rallied back: "When the market fell off its early-May highs, the behavior of stocks in your portfolio should have provided cues on whether to hold or sell. As the downtrend gained steam, falling stocks likely ushered you mostly if not entirely into cash, without requiring you to make many agonizing decisions. A market starting to bounce back works in much the same way. A few strong buy candidates have cropped up, breaking out of bases or from proper secondary buy points. If the rally gains strength, more opportunities will come up. You'll see more quality stocks breaking out and marking bigger gains. Sticking to sound buy rules would allow you to gradually build up your portfolio." I couldn't say it better than that. There are a TON of charts that are building beautiful right sides of their bases. What is funny is that none of these were obvious until after Thursday and Friday. That is how quick things can change. :)

So the bulls are the winners still and now we have a holiday shortened trading day on Monday. These normally have a bullish bias to it. What is the old market saying? "Never short a dull market." I think that might be a safe bet this Monday with such a strong recent ticker tape.

So with that we rap up another quarter of stock trading. Q2 was pretty rough I have to say. I still left positive but I am disappointed I did not make more on the May break to the downside. Who knows, maybe that sets us up for another excellent bullish rally like the one we had off the October 05 lows. If that is the case I probably will quickly forget about the month of June.

Go spend time with the family, cook up some delicious BBQ, and enjoy the fireworks as we celebrate our Independence Day. I shall see you on Wednesday, unless you are hanging out in Investors Paradise. If that is the case, I will see you NOW!

New Swing Longs: KNXA CTS ATML ITG WBMD ALSK IYZ

Adding to Longs: BSML

New Swing Shorts: NONE

Longs Outperforming: OMNI-198 PAY-46 HSR-81 CXW UARM PSPT SEIC GPIC-33 SMSI-102 TSCM-166 CTCI-61 CTXS-53 IHS-50 TRMA DGX DDS BWP BUF BSML BMR PMTR-61 LCC-146 MDF ECOL-39 WMG GISX IDEV Q-76 ALXN FORR FSII KNOL-132 TYL PRVT TIII GMTC

Shorts Outperforming: CRXL SWC BPFH ELY WSM AMAT RTP AVID MEOH VCG IKN APOL BBBY GTRC ITWO

Stocks On Radar Screen: FDS LSTR BOT BWCF LEAP SBAC EDGR HLTH TDS LMNX WRE SWY XPO

Disasters/Get Out: UBFO FLAG AHS RTK FUR. Cut the loss now, redeploy the cash on the upcoming winners. If this rally last there will plenty of them. No need to keep money in these disgusting dogs.