Another completely boring Friday in a dull summer ended a week of gaps and reversals for stocks. After drifting around all day, stocks closed with losses on lower volume. The blame of today's weakness was the inflation fears being sparked again by retail sales and the options crimes committed by executives. However, was this really new news? Is this why stocks fell? Whatever.
The SP 600 led to the downside with a .9% loss, the Nasdaq fell .7%, the SP 500 fell .4%, and the Dow Jones Industrial Average fell .3%. The worst of the selling was in the Semiconductor sector, Airline sector, and leading stocks. The IBD 100 fell 1.3%, the SOX fell a little over 2%, and the XAL fell 5%. So much for that rotation into Semi stocks.
Volume was lower across the board and breadth came in with decliners beating advancers by a 2-to-1 margin on both the NYSE and the Nasdaq.
For the week the Dow Jones Industrial Average fell 1.4%, the Nasdaq fell 1.3%, and the SP 500 fell 1%. Even with the minor losses, it sure felt a lot more volatile with all the crazy intraday action we saw this past week after early morning gap and traps.
There is still too many negative divergences and negative price and volume action, on the indexes, to trust going long anything of size here. Until this downtrend changes into some form of an uptrend, the path of least resistance is down. This means that rallies are to be shorted and dips are not to be bought.
This is a very geopolitical-news trapped market. The market does not like uncertainty and you can guarantee that one thing that is always certain about the Middle East affairs is its uncertainty. Hopefully, we can get some clarity on the conflict and that will help the market find a trend that is a bit more clear than random choppy floppy summer action.
The rest of August should be no different than what it was on Friday. If you go back and look at the last few summers you will quickly get an advance look at what the next two weeks will be like. This mind-numbing trendless drifting could continue for another week or two so be ready.
I highly recommend that you read my last two post (Wed, Thur) along with this one. If you do that you will know exactly where I stand on this market. I don't believe I have left much out the past few days. If I have, you know where to find me; Investors Paradise.
New Swing Longs: ISYS
New Swing Shorts: EL
Longs Outperforming(low vol. movers excluded): VLG-47 GPIC-29 SYKE-32 HMSY BWP MO RNST MA ALTH
Shorts Outperforming(all): SWC-37 JOYG-36 ZRAN-35 DSL NGS X STLD XPRSA LDSH NCI DDE USU AMAT RES MAFB TXRH PII RCNI VO IYT GE WFSL PDCO ESIO AME BLK VXF VB WERN CSX FRC AF WTFC RS IFX VLTR AGP EXBD FDX IJS IJT AHG ARO TZIX HSY IART SBL BEC SIGI ATPG NC CBS GSF AEE CBST LAMR GDIS COO VOL KG RMK HAWK CAT CFC CSE CEN
Stocks On Radar Screen: STEC DRYS GROW LINE TJX CLUB AMRN CAPA CKSW
10 comments:
I see that you post on the Real Money site - I am just curious what the stocks listed in "Longs Outperforming" actually means. Sometimes they are accompanied with numbers. Will these stocks have a tendency to go up or down? thanks Steve
Longs Outperforming are my current holdings. They are stocks up for the day for the longs and stocks down for the day with my shorts.
The number is the % gain after each buy. I don't post numbers until it is up 25%; then I start tracking performance on the blog.
If a stock isn't going up you shouldn't be long that stock. I don't ever buy stocks and hold them once they break my cut loss. I NEVER break my rules.
Aloha!
hey Josh,
Elliot Dole referred me to your site, and so far it's pretty good- insightful blogging, and great charts at investorsparadise.
I'm just excited to finally find someone who trades in the 808-state. It's pretty harsh getting up 3 AM before the market opens, no?... I trade from Oahu.
anyway, keep posting. Off to the beach!
-gio
Hi Josh. I'm posting here briefly because I don't have much time to regularly contribute on IP and haven't bothered to set up an account. But I regularly read you all there. Great reading. I have noticed something on your charts you post from TC2005, which I also use, and have a suggestion. I don't know if you have the layout set up like it is for a specific reason, but the proportions don't look right and the price graphs are hard to read for people. Price action and volume are the 2 most important things to be looking at, but you have your candlestick price graph all squished up too much at the top, and other things like BOP which is less important taking up too much space below. May I suggest you expand the price graph so it encompasses 1/2 of the upper part of the window, and divide the volume and BOP to equal parts below. This gives a much clearer view of the daily nuances of price action by stretching out the candlesticks. (Like Bigcharts does). You do this (if you don't already know) by moving your cursor over the thin horizontal line between price and volume areas till an up/down arrow appears, right click on it, then drag the line down to half way on the window. Adjust any other displays the same way. Plus, by having the price graph take up half my screen, I have plenty of room to make all the notes right on the chart I need to remember by using the pen drawing icon, i.e. trendlines, support, resistance, earnings dates etc.-it’s all right there every time I pull up the chart. Is the way the charts appear on IP the same way you study them on your computer, or is something getting reconfigured in the process of posting them? Keep up the good work.
It isn't hard getting up at 3am. I don't do it all the time and all my trading is done during the close so it is actually easy. It is the current market that is tough. When I am shorting stocks I HAVE TO NOMATTER WHAT wake up at 3am and make sure I get filled at the right prices. Going long is ten times easier; I don't have to be awake at all during market hours for that.
When you see me posting at my site and in the chatroom, I am normally reading TONS of articles and researching stocks. All of my positions are monitored during the first half hour and last half hour ONLY. I try not to watch my portfolio too closely during market hours.
Maybe sometime when I am over on O'ahu we can meet up and have some drinks.
Have a great Sunday
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cayuse, you have finally stated the comment that I have been waiting for since I started writing this blog.
I learned after my first year after I ACCIDENTLY moved the upper horizontal bar too far up the secret power I uncovered almost instantly.
You say it is harder to see the pattern? For real. I think the way I have it set up it is ONE HUNDRED TIMES easier to read. You see the thing is the more green the better. I can clearly see the patterns once they are reduced in size. Until I do that EVERY chart looks choppy. I see the charts Rev post, Alan post, and GBS post and I still KNOW I outperform all of them do to one key difference. MY charts are easier to read. The smaller price window makes the pattern JUMP OUT at me so much clearer. Then with having the middle and lower window so big when the green volume and green BOP comes in it really JUMPS OUT. So now I have everything in my favor.
I might be keeping this simple but if you just make your price graph much smaller you should be able to EASILY tell the difference between a sloppy chart and a well formed chart.
The way I have setup my charts happened by accident and as soon as I did that I INSTANTLY was able to see the price patterns more clearly. This, my friend, is no accident now. This is how I must view ALL of my price charts. IBD Daily Graphs are useless to me, besides ALL the fudamental data.
Also I never post notes on my charts. I look at over 2000 charts a day and do this everday and have been doing that for over 10 yrs. at least. So I have seen enough charts that dont work out that I can quickly look at it and see what I did wrong. Plus in bull markets I have SOOOO many winners I know what the future will bring for my stocks regarding patterns.
Thank you very much for the great kind comments. I really wish you would sign up on IP and contribute. The more conversation the better.
I hope my answer helps and i really would study my chart settings and set up a tab just like mine and compare your charts to mine. You will see, I SWEAR TO G-D, that it makes the price patterns easier to see.
That along with the green really jumping out with pretty stocks like CXW FORR in bull markets can lead to some big winners in a short amount of time.
Very interesting. I'll look at my charts in your format and experiment to see what new things I see. Hard to find very many pretty charts in this ugly environment lately. I'll try something new.
how's OFLX for a long?
OFLX: If you have to go long this stock, now is as perfect a time as ever, as it sits right on its 50 dma.
There are two major problems that are quite obvious to me at first glance. First off, the volume is way too low and sketchy to be a safe long. There are simply too many days where this stock doesnt trade. Way too risky if a blowup happens.
Second, the stock is a choppy bugger. Yes, it has firmed up since the June breakout and has started to act more properly. But with all the price bars in this base the biggest swing is twice on the downside. Once in the second week of July and this recent move down to the 50 dma.
So I would avoid this stock with all my heart. But if you must go long this is the place, with a cut loss w/ a close below the 50 dma.
Where do Rev and Alan post their charts?
Both are contributors at
www.realmoney.com
Alan is on
www.hardrightedge.com
Rev runs his room at
www.sharkinvesting.com
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