The news of the day was in fact that there was no news during the day. Traders started the weekend one day early, obviously.
Stock market indexes finished mixed, with the Nasdaq rising .2%, the SP 600 rising .1%, the SP 500 falling .1%, and the Dow Jones Industrial Average falling .2%.
Volume was lower on both exchanges and was well below the 50 day volume average. Today was the slowest day since July 3rd. This lower than average volume today continued a trend that lasted all week. Just by looking at a chart you can see that the past 11 days on the NYSE and the past six days on the Nasdaq have been very slow trading days. That is sure to continue into next week.
Decliners led advancers by a 8-to-7 margin on both the NYSE and on the Nasdaq.
Final stats for the week have the Dow Jones Industrial Average down the least with a .9% loss, the SP 500 gave up .6%, the Nasdaq 1.1%, and the SP 600 2.2%. The positive on these numbers is that the indexes were up a decent amount last week and so far we are holding those gains. After rising 5% plus last week, the Nasdaq only gave back a fraction of those gains. That pullback on lower volume has to be a decent reason to be bullish on the short term.
There is still plenty of underlying weakness that still requires caution; the amount of new highs on the indexes being much lower than where they were the last time the indexes were at these prices, stocks breaking out of bases and still reversing, overbought readings on some oscillators, and the fact that we are coming upon seasonally one of the weakest weeks in the markets the past 18 yrs are all great reasons to keep cash heavy. The past nine years have seen the indexes fall an average of 2.7% during the final 5 days of August. A good poker player (stock trader) does NOT bet against those odds.
Saying all of that, this low volume market is stupid to try to analyze and make sense of. We simply have to wait. I don't care if no one likes it or not. If you want to make a lot of money when the time is right, and stocks are breaking out and racking up 100%-500% gains in the span of months to a year, you will be smart and keep cash heavy during this kind of oscillating market. Now is not the time to make a living trading stocks - now is the time to preserve your capital so when it is time to make a living trading stocks you will have all of your capital; and not just a former shell of your old account highs.
How many of you have been trading this market and making money (futures traders don't answer me)? I monitor a lot of chatrooms and stock boards; I know the answer. Do you think I am making a lot of money during this market? Nope. I am basically dead even! I haven't made a step forward at all yet I have been trading like a mad man with small positions. Maybe if I had a life I would have gone on vacation and spent my money more wisely.
Don't take sides in this market. It is best to wait for clarity. A clear direction with volume to tell us where the big boys are going is what we need. We don't have that, and until we do, patience is the best advice I can give.
Aloha and have a great Sunday. I will see you later at IP.
New Swing Longs (keep them small): ABCB IDXX TTEC BDCO
New Swing Shorts: NONE
Longs Outperforming (low vol. non-IBD stocks excluded): CVO-132 CTCI-65 DSGX-57 VLG-51 IHS-42 TYL-37 SYKE-34 DA-31 BWP-25 BTJ EMS WNR HMSY MIR HSR VTIV EGN ALY WEBX BMR FORR CHINA DIGE TRMA GISX GES JTX PSPT OMRI FRO MFA
Shorts Outperforming (all): SWC-38 JOYG-36 NTE-32 BPFH-20 GTRC-18 POOL-16 PII-16 BTH-15 RS-15 APOL HTLD FRC DSL STLD CPF XPRSA DDE KNOT TZIX SIGI CCO STNR CPE CFC EL
Completely Cover Shorts: LAMR HAWK CSE
Stocks On Radar Screen: DRYS ANEN NGPS FILE GEO SMOD ETE FRG GHDX AMAG
1 comment:
I see FRG is on your radar screen. It's had a good run recently. What's your view on it?
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