Stocks gapped higher, once again, and then turned tail and sold off into the closing bell. This makes the market four for five on the gap, trap, and reverse trade. The early morning's rally was credited to the drop in oil prices and the resolution of the Middle East crisis. The markets later responded by reversing those gains as the reality of a slowing economy once again crept into market participants heads.
By the close the Nasdaq reversed a 1.7% gain to close up only .6%, the SP 600 finished up .3%, and the SP 500 and Dow Jones Industrial Average reversed 1% gains to close up only .1%.
Volume was higher on both the NYSE and the Nasdaq by a small uptick over Friday's levels. However, the big news with the volume is the fact that before the reversal happened I believe volume was running around 35%-40% below Friday's average. When the market reversed, volume started to pickup, and the next thing you know we close with volume higher than the day before. That is very bearish action. Breadth was positive on both exchanges and that could be taken as a slight positive to the bearish action with the price and volume.
The market remains a very volatile and choppy beast. It is doing its best to wear out traders and knock the new comers out of the game. The market always does this. As soon as EVRYONE was interested in Gold and Oil, the markets started to act funny and the top then came shortly after in May. Since then most traders are not making much headway. This is going to knock out a lot of weak players. Don't become one of these weak traders. Stay strong and know that another bull will come.
August is ALWAYS the slowest month of the year, with Wall Street vacations and plain old cyclicality. So be ready for more days that are just flat dead or days where big percent moves turn into tiny moves. That is what normally happens in August. It is usually a very slow month, either ticking up or down on low volume. Just make sure you stay awake and keep an eye open for any bullish signs that a tradeable rally is approaching.
Are there any positives in this market? Sure there is! The bears are getting pretty darn cocky in the stock chatrooms I monitor, the horrible traders are getting extremely desperate to make some money, there is some outperformance in Tech stocks short-term over other sectors, and the Nasdaq could be building a base to launch out of for a tradeable rally. However, with all this one thing must be remembered: We are still in an intermediate downtrend on all indexes and in a long-term downtrend on the Nasdaq and SP 600. It is going to be hard making any significant gains with these indexes in such negative shape. It sure as the hell doesn't help that the Nasdaq's 200 dma is ready to join the 50 dma on a downtrend path with prices under both averages. Not good.
So with all of this I still recommend staying extremely patient, extremely positive, disciplined, and keep those watchlist updated constantly. Don't get lazy. If there are waves in the morning I will not be in Investors Paradise. If there are no waves I will be home like always. Aloha!
New Swing Longs: CGX PSPT -- both for a small trade only.
New Swing Shorts: NONE
Longs Outperforming (non-IBD low vol. movers excluded): CTCI-54 SYKE-34 VLG-49 IHS-40 BAM-32 AVNC-37 GPIC-36 HMSY CXW DDS IMA SEIC LMT HWAY DGX RNST TYL MA KHDH
Shorts Outperforming: SWC-39 JOYG-37 ZRAN-35 NTE-30 GTRC-21 USU ARO NGS HAWK WTI BPFH RES MAS POOL WFSL PDCO BLK FRC RS WTFC CNI STLD CPF AGP LDSH HYDL FDX AHG KNOT IART ATPG NC GSF GKIS VOL KG RMK KMR CAT CPE CSE CBD
Completely Cover Shorts: CBS AEE
Stocks On Radar Screen: GROW PCLN MRK AYR CLUB EMS SRVY NYER
3 comments:
I have signed up over at Investor's Paradise, but am experiencing a difficulty where your charts appear much too large for my screen. Is there something I can do to properly size them to be seen, or do you need to post them in a different fashion?
Did you look at the new longs today. Those shouldn't be too big.
I use the smallest resolution on my computer so the charts appear normal on my computer. On ppl who use larger resolution, the charts are too large.
I have changed that by fixing the size. If you look at today's longs on CGX and PSPT on "new swing longs" they should look normal.
If they don't the only thing I can recommend is changing your resolution to a smaller level.
I have 20/10 vision. So I have an unfair advantage. I can read the smallest of writing that some people cant see.
Yes, that worked just fine.
Thanks.
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