Stocks Fail To Make It 5 for 5; Stocks Pullback On Lower Volume.

Stocks finally took a rest, after four days of price gains. The blame on the poor action came from a weaker than expected consumer spending report and a high personal consumption expenditure index. Personally, I think the bulls, decided to take an early weekend after four days of kicking the bears ass.

At the close the SP 600 led the way to the downside with a 1% loss, the Nasdaq followed with a .5% haircut, and that was followed by the SP 500 and the Dow Jones Industrial Average losing .3% each.

Volume was about even on the Nasdaq or 1% lower, depending on where you get your data from. Volume on the NYSE was 1% lower. There was no distribution day on either index. Breadth was negative by a 10-to-7 margin on the NYSE and negative by a 3-to-2 margin on the Nasdaq.

For the week, stocks rose across the board. The Nasdaq was the leader with a 1.8% gain, the Sp 500 gained 1.6%, the Dow Jones Industrial Average gained 1.5%, and the SP 600 lagged with a .7% gain.

For the month of September, the Nasdaq led with a 3.4% gain, the Dow Jones Industrial Average and the SP 500 rallied 1.6% and 1.5% respectively, and the SP 600 lagged with a .8% gain.

For the quarter, it was the best quarter for stocks since Q4 of 2004. The leading index during this quarter was the SP 500 with a 5.2% gain. The Nasdaq rose 4% this quarter. These are simply wonderful numbers. The facts prove that the bears opinions did not matter the past three months. Opinions RARELY do.

The theme that has come to life very obviously, to me, is the fact that this rally is being led by big-cap, value, and some speculative stocks. This rally is not the strongest of rallies, since the growth stocks and leading IBD stocks are not leading the rally. But, we have a rally none-the-less. The fact remains there are plenty of stocks breaking out and making gains in the big-cap, value, and speculative names. Even defensive names like Beverages and Medical are having stocks breakout and rally.

It is obvious, to me, that if you are looking for growth stocks to be leading you are looking at the wrong place. This is a rally for the value guys. The growth stocks may jump in later on and the IBD 100 and SP 600 could retake leadership. But until that happens, ignoring the big-caps and speculative issues racing to higher highs just so you can wait for the perfect market doesn’t make sense.

With all the charts I keep posting everyday, there should be something in there that jumps out at your face as a “oh my God, that chart is so pretty and its breakout is so clean” that you should be able to produce gains in this market. Sitting in the sidelines in all cash is not a smart play when the markets are rallying like they are. This doesn’t mean you should be 200% on margin either. Trust me, I am not. This is not a growth rally. This is a value rally. The best of the best chart patterns in the best of the best names in the HOT technology industries are not the stocks moving in this rally. Therefore, the rally probably doesn’t have the legs to be a multi-year cycle. But that doesn’t mean you should miss out on all the great charts that are breaking out from pretty bases that evidently no other market player can see but me.

So, remember, for now it is about value; not growth!

If you are not doing well, it is no big deal. If this rally keeps going growth stocks are going to join. If you haven’t been disciplined and objective taking breakouts, I know this rally can be painful to watch it go without you. That is why you must always trade the chart and not your opinions. All the bearish arguments have PROVEN to be FOOLISH FOR NOW. Later on they may be right. But what if some stocks have 100-300% runs before they are right? I don’t want to chance missing out on that. However, if this thing is the real deal there will be plenty more charts to trade from proper breakouts from sound base patterns.

Monday is Yom Kippur and is bound to be quiet. In saying that don’t ever short a dull market and if the market sells off check the volume to see how intense market players are. I am sure it will be a quiet one.

If you have any more questions, I would recommend reading all of my post since I returned from my vacation around 9/21. Everything and everything should be discussed there. And if you are not reading my “general market observations” post at Investors Paradise, you are doing yourself a major disservice as I post random thoughts over there all the time. Thoughts I don’t post here. For instance, why am I bullish now? Could it be because of the IPO market? I haven’t talked about that a lot here. Maybe I have at IP?

Have a great weekend and I will see you at Investors Paradise. Aloha!!!!


New Swing Longs: RICK AVCA QI HDIX APRO PDSN BDX HB SOFO AXTI

Adding To Existing Positions: ISIG ICE

New Swing Shorts: NONE

Longs Outperforming (non-IBD low vol excluded): OMRI-36 SYKE-40 CXW-28 STEC-38 TYL-36 DA-36 MA-40 CLEC-25 CTCM ICE SYX BWP XING HRZ RSTI BITS SIMG CPA ISE PSPT HMSY TIBX PRFT ACGL LMT IDXX BMR DUCK CVLT KAD OMTR ISIG AOB NFLD BRLC CCOI MFA WEN CYBS RMTR GENT ELOY

Shorts Outperforming: CPE-17 HYDL-17 USU KMP IXC ARLP ASA SM IPS TDW ATPG

Completely Cover Short: GSF

Stocks On Radar Screen: NIHD NWS LEH MAIL MR NGA GHDX

Bad News Keeps Coming...Stocks Keep Climbing; Four Days Of Gains.

A poor opening turned into another rally, despite a poor 2Q GDP report that came in below expectations of economist and the fact that the Dow Jones Industrial Average could not close in all time high grounds. This was another day of poor economic news that saw the market rally anyway. That makes this four in a row.

At the close the Dow Jones Industrial Average and the Nasdaq led to the upside with .3% gains, the SP 500 rallied .2%, and the SP 600 lagged with a .2% loss. Good news was that the SOX index led the market with a 1% gain. The bad news is the IBD 100 continued its trend of lagging with a .2% loss.

Volume was lower on the NYSE and the Nasdaq, as traders are probably exhausting themselves to the upside. Well, maybe not, after tonight’s RIMM report. Breadth was positive on the NYSE by a 9-to-7 margin and positive on the Nasdaq by a 8-to-7 margin.

After seeing today’s action spending the beginning of the day in negative territory it was really bullish to see the bidders, once again, take the market off the lows into positive territory.

There does appear to be a rotation happening out of the old leaders into some technology names. I am starting to see A LOT more charts showing up on my scans that are setting up in nice bases. That along with all the technology longs I have now indicate a rally is shaping up. The fact that the IPO market is showing the most recent issues doing well too is another tell that the market is healthier than all the bears “think.”

Leading growth stocks are still lagging the value names. This should be reversed. Maybe another basing period for the indexes will get these stocks to catch up and participate. Even if they don’t there is plenty of great stock charts out there in speculative issues and then there are plenty of slow moving Utility and other big cap stocks that are offering breakouts. They are not the best but they are breakouts from good patterns none-the-less. Hopefully, the gains will continue. If they don’t that is why you have cut loss plans. Without them you are trading blind.

Please read my weekend post to see what I do NOT like about this market. However, no matter what an indicator or 10 are saying, it doesn’t matter as long as the indexes are hitting new highs. The facts are the facts. Your opinions and soothsaying don’t mean crap to your portfolio or the market. Only the profit and loss matters. The future is never as important as the current time and the past. If you learn from the past, the future will never be a problem.

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

New Swing Longs: PYX NFLD LWAY TIBX APLX CVLT LBIX CYBS OSIP ELOY

Adding To Existing Positions: LMNX RMTR

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excluded): STEC-35 ZONS-28 OMRI-32 INPH-37 AKAM-213 IHS-63 SYKE-42 DA-36 CXW-26 MA-37 BAM-42 AVNC-81 SYX CAB PRFT SXCI BEBE INWK BEAS IMA GROW HMSY IMKTA BMC TWGP ICE DIOD LMT NGPS WEBX ACGL ROG AHS BWP LINTA EMS WSH HRZ DJO WEN LMNX STZ DDS MFA ALSK HAUP XNR MRTR SUMT PRCP

Shorts Outperforming: SWC-43 HYDL-15 NTE-43 CPE-17 USU GSF TDW ASA MDG ATPG

Completely Cover Short: EXBD

Stocks On Radar Screen: PMD AH MOT COGO MVSN LTM RTEC

I Got The Green Light On Speculative Longs; Three Days Of Green Is A Great Way To Start A Week.

Even on the back of higher oil prices, poor durable goods numbers, and some hawkish Fed comments, the market still found a way to rise. Since CNBC told me it was because of the good housing numbers and the Dow being near new highs I will just believe them on that.

At the close the SP 600 led to the upside with a .3% gain, the Dow Jones Industrial Average followed with a .2% gain, the Nasdaq rose .1%, and the SP 500 had a slight .02% uptick.

Volume was a tad higher on the Nasdaq and on the NYSE I do not know what to believe anymore since I have conflicting data. All of the comments I made last week about the incredible volume might not have been real. Why didn’t anyone call me out until today? Odd.

The leaders today came from the Oil & Gas sector as those stocks are finally getting a bit of a rebound after a good selloff. The Biotech field also got some action today with the late good news from AMGN. I am not excited about the winners today being the OLD leaders of the past. So I am not sure in the short-term trend if we are going to have day four of gains.

I am also seeing a lot of value indexes and closed funds show up on my long scans. That along with SP 600 and Nasdaq lagging the SP 500 shows that this isn’t the bull market for the markets most exciting growth stocks. They are participating but by looking at Value indexes you can clearly see that they are the winners and will lead if this rally continues.

This is a speculators rally, without a doubt. The majority of longs tonight are very speculative but have very attractive charts. The CANSLIM stocks are still setting up, hopefully. However, I really don’t see a whole bunch. The stocks I am long already would make wonderful stocks to get again on another basing period followed by a breakout. But for now most have made moves away from the pivot points. That is good news as it means stocks are going up.

I am glad I stayed with my rules of buying all breakouts that look pretty. This has allowed me to be invested as this rally started and now that the rally might be playing out with all these new longs showing up I will be in position to take the gains and move them into better stocks as they breakout. This is IF this rally is in fact a lasting rally. Without growth leading, I still remain skeptical. But market momentum can last longer than either you or I think so it is best to stick with the trend. The trend is up.

I hope you had a fantastic day. I will see you at Investors Paradise.

New Swing Longs: CAB LINTA BRLC CCOI WSH HRZ RMTR ETR WEN PNW STZ SUMT AUXL NHP NXL PRCP BITS

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excl): OMRI-27 INPH-32 TYL-37 MA-35 SIMG WEBX IMKTA RSTI DUCK ICE CPA PSPT SEIC NITE ORB BWP VTIV CACB SIMO BEBE TWGP DECK ABCB CGX BMR ACGL AHS BW OMTR VOLC KAD VRGY CLEC AOB IGT MNG ABI HURN TSRA CMCSA SVNT UHS DDS WGA SMP

Shorts Outperforming: DDE-25 ZRAN-32 NTE-42 IPS USU

Cover Shorts Completely: KG PTR REP DO

Stocks On Radar Screen: ASMI JSDA STKL DIVX RVBD HDIX COGO RESP CVA MTD DCI SYM

Stocks Rally On Heavier Volume; Great Breakouts Are Still Missing.

After a morning filled with bad news from the existing home sales report and a class-action lawsuit against Tobacco companies, stocks decided to look the other way and rally on heavier volume. The credit for this rally was thrusted upon the same talking Fed-head that always causes these moves—Dick Fisher from Dallas.

At the close the Nasdaq jumped 1.4%, the SP 600 rallied 1.1%, the Dow Jones Industrial Average traded .6% higher, and the SP 500 rallied .9%.

Volume was heavier on both the NYSE and the Nasdaq. This gave both indexes an accumulation day. Breadth was positive by a 2-to-1 ratio on the NYSE and by an 18-11 ratio on the Nasdaq.

The big winners of the day was the Internet-ISP and Networking groups and the Semiconductor Equipment group. All of those indexes rallied 2.2% or better. The SOX index was the best performer today with a 2.5% gain. If this rally is going to work you are going to want to see this index continue to lead the market.

All of this volume that we are having on the SP 500 and the Nasdaq better be leading to new breakouts soon for the indexes. If the indexes do not breakout and rollover, I will officially announce this as the most obvious and WORST case of churning I have EVER seen. If you look at a daily chart going back to 2001, you will see the only more active time for the NYSE was in 2002. Since then we have not seen this kind of activity. And if you look at a longer term chart you will see that we have never seen volume like this EVER on the NYSE. This better breakout to the upside or else this churning is going to lead to some MASSIVE selling.

In saying that above, along with everything I pointed out in my weekend post, you still should not fight the trend. You never should ever argue with the trend and right now the trend is still up on all time frames. Don’t let opinions rule over facts. Fact is the market is up but not exploding to the upside. Therefore, you trade small positions in the charts that you like. But you do not load the boat with margin.

The technicals indicate stocks should move higher. If the markets rollover with all of this volume, you will have my blessing to be as bearish as you want. Until then it is still the wrong play for the general market trend.

I still wish my stocks were acting better. If stocks were breaking out and following through immediately, I would not be worried that this rally might not have the power to give us continuous new highs. But, right now, there is too much random action. Too many are not following through, some are but are then quickly reversed. There is simply too much action in stocks like MO that keep me from loading the boat. At the beginning of the most recent rally that had stocks breaking out from beautiful bases and working—Oct. 2005—many stocks never returned to their buy point. Over half are still doing that now.

The thing we need to keep an eye on now is to see if the bulls follow-through on today’s move. Every time the market looks like it wants to make a run, the bears start selling. We will see if things are different this time. We better hope so. There is so much volume in the indexes that to not follow-through should be very bearish.

Stay calm, patient, and cash heavy in this difficult market. I do not know a lot of professionals that are killing it right now so if you are not doing well either don’t lose any sleep over it. I know I am not. I know another bull with tons of HOT breakouts will be around the corner. They always are. I will see you at Investors Paradise.

New Swing Longs: SIMG CMCSA CLEC TSRA LYG

Adding To Position: SIMO DIOD

New Swing Shorts: NONE

Longs Outperforming (non-IBD low vol excluded): AKAM-207 INPH-35 CVO-134 TYL-38 IHS-70 SYKE-37 BAM-41 MWRK-28 DA-37 AVNC-81 XING WEBX PSPT SIMO PRFT ABCB RSTI NGPS LMT ISYS ROG DIOD HEI TWGP HCSG BMC DKS CPA BEBE NITE ACGL CGX CTCM IMKTA CHINA SEIC AHS ORB INWK EMS OMTR DJO MYE ALSK DECK RAH PLM XNR CPAK

Shorts Outperforming (all): SWC-46 DDE-22 HYDL-19 CPE-21 NGS-17 WTI USU KMP KMR IXC ARLP ASA SM IPS TTI MDG

Cover Shorts Completely: CCO

Stocks On Radar Screen: TST MFC GLDN KBALB UCTT UHS BLSI

Stocks Lose Ground For The Second Straight Day On Lower Volume; Late-Day Buying Helps Lift Indexes Off Their Lows.

With no good news to rally on worries over a hard landing for the economy was a good enough reason for market participants to sell on Wall Street. Today was the second straight day of losses for the market.

At the close, the SP 600 led to the downside with a 1% loss, the Nasdaq followed with a .8% loss, the Dow Jones Industrial Average lost .2%, and the SP 500 fell .3%. The bad news came from the IBD 100. That index, once again, led to the downside with a 1.5% whacking, with many stocks falling 2% or more.

Volume came in much lower on the Nasdaq and on the NYSE. The lack of volume to go along with a modest down day that found last hour support is much better than having another distribution day. Breadth came in near 2-to-1 negative on both the Nasdaq and the NYSE. It was a pretty even day.

For the week, the SP 600 was the big loser with a 1.3%, followed by the Nasdaq with a .8% loss, and the Dow Jones Industrial Average and the SP 500 lost .5% and .4% respectively.

The stories of the week seem to me to be the one nobody is talking about. Volume. Look at all the volume the past week on the SP-500 and the Nasdaq. There was lots of it yet prices swung violently for the week and finished down. Now you can say compared to the past week, this week was very positive since we only gave back a little bit of the gains. That is true. That is a bullish trend that has been happening for a month and half. But with all of this volume this week, stocks should have gone up. By not going up we have the setup of a possible churning market.

How do I know it is churning? I don't until after the fact. But a lot of things are lining up that indicate it might in fact be churning. The markets have had distribution days the past week, the VIX is still very low, the yield curve is inverted, oil is breaking down, Fed activity under zero for first time in three years, SOX is lagging, the IBD 100 is lagging, it is the end of September (cycles), the Nasdaq is 100 points higher yet there are more new lows now than then, we are overbought, not all of my longs are immediately showing me huge gains, there are not a TON of quality stock charts, we are overbought on Helene Meisler's adv/dec ovrb/ovrs indicator, and the worst part is the possible wedging double top forming on the SP 500, DJ 30, and NYSE. This is all good enough reason to still have me in way more cash than in stocks.

If the market breaks down, I will be more than happy to start loading up on shorts again. However, we must wait until the market actually agrees with all of the above. The market still shows sign of fear with the put/call ratio staying around the 1 level for the past few days. The fact that the markets are still in an uptrend is the ultimate "don't fight the trend" sign. Ignoring this sign can KILL you. It is the most important sign because it is fact!!

Right now the truth is not many players (including me) are sure what is going to happen. We can make predictions all day but that seems stupid to me and a waste of energy. If this is a healthy pullback or the start of something worse, we will find out via the charts. Right now that picture is mixed. Some longs are working, some are not, but one thing is for sure the ones working aren't giving me huge gains. That is telling of the strength of this market.

Keeping your cash level high is still the smartest play in a market as tricky as this. If there were more charts working and setting up properly this would be easier. However, that is not happening so the smart play is to keep that cash stacked in the old money market account.

It is still about waiting for the right moment. It definitely still isn't here. Until I get more pretty charts and all of the above warning indicators I talked about four paragraphs ago are reversed the perfect moment like the once at the end of 1999, March 2003, and October 2005 is not going to be here anytime soon.

So it is best to stay patient, make quick trades with the nice setups that do occur (unless it is medical, then you ride that trend), cut your losses immediately on the stocks that don't go up right after you buy, keep reviewing your past trades, keep reading and studying, and make sure you use this time to learn how to master the CANSLIM system. While the market acts like a Liberal and gives us no direction, you can act like a responsible professional and prepare yourself to be fully ready for when the next solid uptrend starts.

Stay healthy and positive, and I will see you at Investors Paradise.

New Swing Longs: HH XNR

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excluded): AKAM-189 MWRK-27 STEC-25 IHS-67 INPH-31 HSR BEAS HEI VSNT GEO NITE HMSY BEBE INWK DKS TWGP NGPS BMR WEBX LMT HURN SXCI DGX DUCK SEIC KAD BRR IMA

Shorts Outperforming: SWC-44 ZRAN-30 DDE-21 HYDL-18 CPE-20 NGS-16 WTI EXBD USU KMP KMR PTR IXC TDW REP ARLP ATPG SM SPWR DO IPS TTI MDG

Stocks On Radar Screen: CVGR UCTT NFLD

A Nasty Reversal At Noon Hits Stocks On Mixed Volume

A very weak reading by the Philadelphia Fed business activity report showing the first sub-zero reading since April 2003 hit stocks across the board.

By the close the SP 600 led to the downside with a .9% decline, the Nasdaq and Dow Jones Industrial Average fell .7%, and the SP 500 fell .6%. The IBD 100 led with the SP 600 to the downside with a .9% loss.

Volume was higher on the NYSE, giving the SP 500 a distribution day but was lower on the Nasdaq. Breadth came in a negative 10-to-7 on the NYSE and was almost negative by a 2-to-1 margin on the Nasdaq.

Down days on heavier volume are normal for a market in an uptrend. What we have to pay attention to is what happens next. The last time the markets took a hit it was quickly reversed to the upside. If that happens soon, all will be well. If more days of selling come in then warning flags would need to be raised. But for now things seem orderly in this uptrend.

The one negative, ONCE AGAIN, is the fact that the market doesn't appear ready to explode to the upside because leading stocks are not leading yet. The IBD 100 continues to fall more than the averages on down days and rise less than the averages on up days. Until that trend changes I am going to remain a very cautious bull on this market.

Like I just said in the above paragraph, I am bullish on this market but don't think I am a raging bull. There are a lot of good stock charts out there but very few are spectacular. The stocks I have been taking are acting well. Not all of them, of course, but the majority are holding their recent support. In saying that not many are blasting out to big gains. If this market was a raging bull to go 200% long on, you would have more stocks breaking out and immediately blasting off. That still isn't happening. Until it does, I have to remain cautious.

I am having severe Internet problems at home and since I live on Maui it is going to take a while before I am up and running at 100%. Probably by Tuesday I will be at full capacity.

One thing is for sure: It has not been a very smooth transition from vacation mode to work mode with a cold and Internet problems. Oh well! You have to take the good with the bad. Maybe, I will see you at Investors Paradise. That depends on if my cable will let me. :)

New Swing Longs: ICE SMP

Adding To Position: PRFT

Longs Outperforming: PSPT INPH HMSY PRFT MA-38 SYX NGPS PTT CTCI-76 CHINA Q-95 IHS-61 ACGL HCSG HURN DA-37 ABCB CTCM MWRK-26 ORB CXW-29 ROG AVCI BW DKS OMTR FCSE IMA MFA AVNC-69 TP CPAK ICI

Shorts Outperforming: ZRAN-29 NTE-42 EXBD USU CCO CPE-18 NGS-15 SPWR IPS

Stocks On Radar Screen: BONT

Fed Holds Rates Steady; Stocks Stage Another Impressive Rally.

Erasing yesterday's losses, stocks gained ground with good news all over the place. ORCL, MS, oil falling another 2%, and the Fed holding steady at 5.25% were just some of the headlines grabbing attention as this rally unfolded. A small dip after the Fed meeting even found buyers willing to support stocks.

At the close the Nasdaq led the advance with a 1.4% gain, the SP 600 followed with a 1% gain, the Dow Jones Industrial Average rallied .6%, and the SP 500, hitting 5 1/2 year highs, rallied .5%. Leading stocks in the IBD 100 lagged the Nasdaq with a .9% gain.

Volume was higher on both the NYSE and the Nasdaq. However, on the Nasdaq, once again, it was one stock's trading (ORCL) that made up the bulk of the volume increase in the average. Breadth was positive on the NYSE by a 2-to-1 margin and on the Nasdaq by a 4-to-3 margin.

Today was another very good day in this rally. The only thing a bit troublesome was the lack of Semiconductor stocks joining the rally along with the IBD 100 lagging the Nasdaq. If the semis join a bit later I will feel a lot better about the rally continuing this far along into it. What are we up like 20 days out of 26 now?

This uptrend is solid and the rally is really doing well considering all the poor news that was thrown at it the past three months. The trend is your friend and the trend is up. I don't think it is wise or prudent to expect things to change. At this point in the rally any pullback will probably now be a place where underinvested bulls will try to put money to work.

There are a ton of nice bases setting up out there and plenty of my longs during the past couple of months are in possible positions to setup even prettier bases to have some nice breakouts. As long as I keep seeing these kind of green charts I am going to embrace this trend.

I am getting ever more long everyday, obviously. I am bullish in the short and intermediate term. With all of the pretty charts I am long you might think that I wish I was long more of my pretty stocks. No. I am long enough. I stuck to my rules. I can add to the nice ones constantly and be happy knowing that I am protecting cash just in case this rally doesn't hold up. But if this rally keeps going I am obviously going to put all my cash to work. For now I still don't think going on FULL MARGIN is wise.

With that I will see you tomorrow at Investors Paradise!

New Swing Longs (you need to be extremely careful w/ ALL of these): SYX PZA GEO SIMO IONA CPAK BULK

Adding To Holdings: CHINA ABCB MDRX

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excluded): AKAM-189 CVO-137 IHS-58 MA-33 SYKE-38 TYL-37 Q-93 DA-35 VLG-36 MWRK-25 CXW-28 AVNC-68 BEAS CPA VTIV HCSG IIVI CHINA ABCB TWGP HEI CTCM VARI PSPT NITE AHS INPH RSTI BTJ BMC SEIC DDS TDY CACB ROG ORB RNST IDXX IMKTA BEBE ISYS SXCI LMT GROW DKS DGX HURN PRFT XING RAH VOLC BRR EMS MEH ISIG MDRX MFA FCSE GISX NU MO SZE

Shorts Outperforming: Later

Stocks On Radar Screen: GIL OATS ANF AGE CR TRLG GS SIMG VOCS CCOI BONT KBAY NFLD LVLT NSTC SCI PME VTO

Markets Close Lower On Heavier Volume; Intraday Reversal A Huge Positive, On A Down Day.

A poor YHOO sales report hit stocks hard until a midday rally helped bring indexes off the lows to a respectable close. Since YHOO/GOOG make up 4% of the Nasdaq it should be no surprise that the market struggled today.

All indexes fell, with the Nasdaq the weakest with a .6% loss, the SP 600 fell .5%, the SP 500 fell .2%, and the Dow Jones Industrial Average fell .1%.

Volume was heavier on both exchanges but the trading in YHOO made up 67% of that increase. Trading in YHOO was 6x heavier than average. Therefore, the increase in volume with the semi-mild price declines wasn't in fact that bad. But facts are facts and volume was heavier. This gave the Nasdaq its 3rd distribution day in 10 sessions. Still the indexes appear fine.

Breadth was negative on both exchanges, with decliners over advancers on the NYSE by a 9-to-7 margin and on the Nasdaq by a 3-to-2 margin.

Even with the negative breadth and price declines today, underneath the market is fine. My charts are acting well and there are stocks setting up in good patterns. The indexes are still in a solid uptrend with breakouts still showing up everyday. Today's intraday dip helped give underinvested bulls a chance to particpate and made some very bullish price reversal patterns on many charts.

The rally might appear to be getting a bit old by now but it is never wise to bet against momentum. Therefore, no new shorts should be initated until the trend is obviously reversed.

I was on vacation and was part of history on Monday night at the LA Dodgers game. If you want to see my tickets, I posted them today on my off-topic forum. I can't even describe what it was like to see those back-to-back-to-back-to-back homeruns. Unbelievable. I have not gone to a baseball game since 2000 at Shea stadium and look what happens!!! Amazing! I am one blessed fellow to be part of something that hasn't happened since 1964 and only happened 3 other times before.

Good reports from ORCL and the FOMC meeting await the markets in the morning. I assume it will take me a few days to fully get comfortable with the true market sentiment. However, if you have been following my new longs, you will see that game remains as solid as can be.

I will see you tomorrow at Investors Paradise. Aloha!

New Swing Longs: ROG DCI VOLC MYE

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excluded): CTCI-72 XING CTCM HCSG HURN DDS TDY RSTI MWRK-25 AHS IIVI CGX VARI CXW-28 SYKE-35 RAH CPA LMT VRGY ACGL WGA VTIV IDXX BEAS EMS MEH MDRX MFA IMA DJO GMTC

Shorts Outperforming: SWC-44 ZRAN-27 NTE-42 WTI SPWR IXC EXBD DDE-22 HYDL-17 DO PTR USU GSF CCO TTI MDG KMP KG CPE-15 REP TDW ASA SM

Stocks On Radar Screen: SYX LTM PJC VCP CPAK

On Vacation, No Commentary Till After Tuesday's Market Close.

New Swing Longs: SXCI RSTI CACB TWGP CPA OMTR KAD

Adding: PLM

Longs Outperforming: OMRI-36 WGA MA-29 INWK MWRK CXW-29 WEBX ACGL DKS BW ABCB BEBE IMKTA CTCM TDY RNST SYKE-32 TYL-34 DGX PSPT CTCI-65 CHINA VLG-39 HEI LMT HSR HURN DA-34 HCSG AHS BRR PLM IIVI AKAM-195 IGT BMR NWL ISIG MEH MDRX MO

Stocks To Watch: ICE BOT APH PCCC JSDA LTM IFOX SAFM CTCO UHS DCI QD ROG

On Vacation--No Regular Post Till Tuesday.

No market commentary until Tuesday. (this was for Thursday's market....couldn't get to internet access).

New Swing Longs: DIOD VSNT HEI GEX

Adding To Position: ISIG MEH

Longs Outperforming: INPH WGA PSPT VRGY XING MWRK MA-25 VLG-38 ORB PTT CTCI-65 STEC VARI LMT IIVI BEAS TTEC DA-34 DKS PRFT RNST ISYS FCSE ISIG MEH AKAM-187 PLM TDY DJO MO ALSK GENT BRR LCAPA EMS

Stocks On Radar Screen: UCTT APN LEH SIMG PCCC CPA LEAP LYTS RMTR

Leading Stocks Help Keep The Nasdaq On Its Winning Streak.

No Stock Market Commentary.

New Swing Longs: XING HURN TDY PTT

Adding To Current Holdings: INPH LMNX MFA

Longs Outperforming (low vol non-IBD excluded): AKAM-177 CVO-144 CTCI-62 SYKE-31 VLG-35 IHS-58 Q-94 OMRI-38 GROW INPH BTJ INWK IMKTA BEBE IIVI STEC ALY NITE BW EGN DKS SEIC RNST HSR VTIV BMC RAH DDS HCSG NGPS BEAS BWP LMT CHINA TRMB ISYS ACGL TTEC BRR EMS LMNX VC AVCI BMRN DECK NWL MEH BMR MFA ALTH AIQ IGT GMTC ICI DUCK

Shorts Outperforming (all): NGS-16 CCO WCN KNDL

Completely Cover Shorts: CX X NUE

Stocks On Radar Screen: RMTR USNA AB VSNT EDU OMTR UCTT

A Stunning Rally Hits Wall Street; Nasdaq Leads Stocks Higher, With A 2% Gain On Heavy Trade.

What an exciting day! Falling oil to the tune of 2.8% and a batch of good earnings news helped spark the market to a fantastic rally that spread across all sectors.

The SP 600 rose 2.2%, the Nasdaq rose 2%, the SP 500 rose 1%, and the Dow Jones Industrial Average rose .9%. The IBD 100 rose 1.5%, staying in the middle of the action. I would still prefer to see this index lead ALL of the major indexes but I will take what I can get.

Volume rose much higher on the Nasdaq and was well above the 50 day volume average. However, the volume was lower on the NYSE and well below the 50 day volume average. It would have been better to see both of these indexes rally on good volume. But, once again, I will take what I can get. Beggars can't be choosers. Breadth was positive on both the NYSE and the Nasdaq by about a 3-to-1 margin.

Semiconductor stocks offered some of the best gains today with the SOX up 3.8%, the Electronic-Semi Equip up 4.3%, and the Electronics-Semi Mfg. up 3.2%. These gains along with the gains in Retail and Transportation had the market looking much more healthy than what it actually might be.

Even though the DJ is at 4-month highs and the Nasdaq is at 3-month highs, there are some negative divergences with new highs that point that this rally might not be "the rally." However, as long as the trend is up we must be bullish and go with the trend. Until the trend turns back down, do NOT short. This market can run further than what you think it can.

The divergences I am speaking of is the amount of new highs now compared to the new highs in May. Even though the big indexes are around only 2% off of their highs, the new highs in individual stocks are well below the levels they were in May. The other negative thing is after we had that one down week last week, new lows expanded much higher than what they were at this time last May. This is all not bullish. However, the tape is bullish so we must go with the longs.

BTW, look at how many longs I have that are outperforming the market; I am long around 100 stocks. Even though they don't even make up 25% of my portfolio, the fact that I am long these pretty charts and did not let "my opinions" interfere has now positioned me for a possible nice rally. This is why it pays to play your strategy all the time, once you know it works.

If this rally has legs, plenty of charts will pop up from solid patterns. These breakouts will be pretty and will have legs. If the markets don't keep following through or we don't get many new buying opportunities then I have to question this rally even more. But for now, I am going with the flow and if stocks like OMRI, IIVI, and CXW are any indication...there is always a bull market somewhere.

If you cut your losses fast and stay in your winners when you have them, you will ALWAYS come out on top if you buy right. I have been whipped around like an acrobat but I am still feeling great! Why? Because, I am sticking with my disciplined approach to trading and I am now long a bunch of beautiful charts simply because I listened to the facts and not my opinions.

Do I wish I was 200% invested now? HELL NO! Are you kidding me. There are not enough HOT charts breaking out of bases that are in long enough bases. These bases are too small and all of this looks like a trading rally. When a real rally occurs, trust me, just like in 99, end of 01, March 2003, and Oct 2005 I will be ready. I will also let everyone know because I will have so many longs and the trend will be such an obvious uptrend in the market that I know I will have the "go long and strong on margin" capital at work. Right now, I don't feel it. The negative divergences, overbought indicators, yield curve, and choppy market tell me the safest and SMARTEST play is to still keep cash heavy. You don't need to trade all of the time. That is a game for outright MORONS!!! MORONS I tell you. You are an idiot if you trade all the time. I am talking to myself also. So don't get your panties in an uproar if it hits home. IT IS SUPPOSED TO!

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

PS: As everyone at IP knows, I will be on vacation from Wed 13- Wed 20 in Southern California. If you live in the Ventura/ LA area and would like to meet up for some drinks, feel free to drop me a private message at Investors Paradise and I will leave you some contact info.

New Swing Longs: DECK LCAPA AOB

Adding To Position: NGPS

Longs Outperforming (low vol non-IBD excluded): OMRI-38 IHS-57 CTCI-58 CVO-136 Q-93 DA-34 CXW-33 HMSY-27 SYKE-29 AVNC-50 BAM-43 VRGY IIVI PSPT NGPS ABCB HCSG WEBX NITE DDS WGA AHS TTEC CHINA RNST BEBE SEIC ORB BTJ MWRK DKS GROW INPH BW ISYS VTIV RAH STEC BEAS TRMB CGX IMKTA VARI BMC DGX MA CTCM PRFT ACGL IDXX FCSE MDRX ALSK ABI IGT BMR IMA BMRN AIQ ICI PLM

Shorts Outperforming (all): SWC-45 PDCO WTI HYDL IXC TDW ARLP ASA KNDL SM DO IPS TTI MDG NUE WIRE

Completely Cover Shorts: GTRC PII POOL IYT DSL CPF XPRSA NCI FDX SIGI CFC MTB

Stocks On Radar Screen: SIMG SAIA COGO HS CWTR MOLX JCG CCBL EVVV TSRA UAG LEAP WEN ATK RMTR GSOL

Stocks Finish Slightly Higher, As Commodity Stocks Come Tumbling Down.

I was running personal errands today and only have time to make a few comments.

It was interesting to see the metals, oils, and gold stocks sell off hard and yet see the indexes close in the green. I am not quite sure what that means but I have a feeling behind totally away from the action today has something to do with that.

It seemed like the crash in the oils was caused by the OPEC quota report and the market intraday recovering was caused by the Fed head of my stomping grounds St. Louis.

The markets traded much higher volume on the NYSE but I am not sure if that is bullish or bearish with the little price action. I am leaning to the bearish side on the action. Especially with the IBD 100 going the opposite direction, losing 1.7%. If that isn't negative divergence from the market, I am not sure what is.

I still don't see any one sector shining and a lot of longs still aren't acting well after breaking out of good chart patterns. That along with all the new metal and oil shorts I got tonight tells me that this correction needs to keep running its course. If I saw more nice charts setting up in more innovative sectors I might be a bit more positive. But besides having a bunch of good longs that are not doing much I am not sure why I should be bullish at all. Except, that I know a lot of traders expect September to be Hellptember.

I don't know about this market. Where are all my pretty charts? I still say keep cash very heavy, keep all positions on the long side under 2% of your account, all shorts under 5% of your account, and stay patient for better charts and hence opportunities.

I should be back in my normal routine tomorrow. Heck, it isn't like today has changed anything...if it has it has only supported every bearish indicator I am worried about during this weak rally.

New Swing Longs (keep them tiny): ETR NWL FCSE

New Swing Shorts: KNDL ATPG SM SPWR DO X IPS PCU TTI MDG NUE WIRE

Longs Outperforming (low vol non-IBD excluded): AKAM-172 BAM-41 Q-87 TYL-37 CXW-31 HMSY-26 MWRK PRFT MA ISYS RAH STEC DKS BEBE INPH WEBX ACGL BEAS SEIC VARI IDXX NITE HCSG INWK RNST PSPT SVNT AIQ MO HNZ LMNX PT

Shorts Outperforming (all): SWC-44 ZRAN-32 CPE-15 NGS-15 DSL WTI NCI EXBD HYDL USU GSF KG KMP KMR ASH PTR IXC MTB TDW REP ARLP CX ASA

Completely Cover Shorts: BPFH VOD WERN

Stocks On Radar Screen: SIMG CWTR TRLG QI AWH VOCS DECK SPG TIVO PLC DRY PCC PCCC

After Two Days Of Distribution, Stocks Rally On Lower Volume; Stay Defensive And Cash Heavy.

On the back of oil falling to near-five month lows, stocks gained ground all day long and finished near the top levels of the day.

At the close, the Nasdaq and Dow Jones Industrial Average led to the upside with a .5% gain, the SP 500 gained .4%, and the SP 600 rose .3%. The IBD 100 lagged the market again losing .5%.

Volume was lower on both the NYSE and the Nasdaq, as traders took an early Friday leave, once again. The lower volume shows that the market is still not under heavy accumulation by big funds. Breadth was even on the Nasdaq and positive on the NYSE by a 3-to-2 margin.

Today's rally, coming off of back-to-back distribution days, does nothing to convince me that the most likely trend at this point is down.

For the post-holiday shortened week, it wasn't a good one for the market. The SP 600 lost 1.5%, the Nasdaq lost 1.2%, the SP 500 fell .9%, and the Dow Jones Industrial Average fell .6%. Worse off, leading stocks sucked it hard this week also, with the IBD 100 losing 2.3%.

With the IBD 100 losing 2.3% this week--which was much worse than the market--it continues to lag the market to the upside and lead it to the downside. In true strong bull markets, leading stocks outperform on the upside and lag to the downside. Right now that is not happening because old leaders are being purged making room for future leaders. When this happens, this index lags. When this index lags you know the only proper play is no play.

The good news this week? Oil fell 4.2%. That means drivers can expect to start seeing some major relief at the pump. The bad news this week? Oil fell 4.2%. This means that the economy is slowing. The fact that Gold also fell 2.4% and that those stocks cracked in May also makes it seem highly likely that the economy is in fact slowing.

That means that the leading stocks of the rally from 2003 are probably done after all that topping action in May. The good news from that means that those stocks can be taken off the leading stock list and new stocks can come and replace those as the market starts to find its legs from this possible selloff. Those stocks could possibly be more tech based; at least that would make for a really strong rally. The other good news is that their are a lot of nice looking short candidates in the Oil sector.

All I have talked about the last five to six post is still relevant to the current situation now. We are just spinning are wheels waiting for some real momentum to either the upside or downside to reassert itself. When the trend comes into a more clear situation then more analysis can be done. Until then the same things that I have been bringing up about why this market is probably exhausted to the upside still reigns true. There is simply nothing new I can add that has not been discussed many time before. Please read the last five post, if you are not sure why I am more bearish than bullish.

It's the most horrible time of the year, as far as stocks are concerned. Stay cautious and remember cash is king in this market environment. Forget trading on the short term if you can't even make money investing in the long term. It is a fools game, to the inexperienced!

Aloha and I will see you at Investors Paradise.

New Swing Longs: VARI PLM

New Swing Shorts: REP WCN CX ARLP ASA SU

Longs Outperforming (low vol non-IBD excluded): CVO-133 OMRI-30 DA-32 IHS-47 CTCI-64 VLG-44 AKAM-157 GROW PRFT RAH CTCM BEAS IIVI TTEC BMC ABCB ISYS WEBX CHINA NEU MO VRGY BMR DGX DJO ACGL PSPT IDXX HSR IMKTA SEIC CGX DKS ORB BEBE SZE HCSG NGPS GISX EGN ALY VTIV ZTM AIQ MNG ABMD ICI RMR

Shorts Outperforming: SWC-40 ZRAN-29 DDE-22 IYT PDCO WTI CPF HYDL USU GSF CCO CPE CFC KMP NGS IXC TDW

Completely Cover Shorts: KNOT

Stocks On Radar Screen: TRLG HURN PCCC LWAY HPQ EXXA SAB HH PLC GMTC

Stocks Get Hit With Another Distribution Day; Not A Great Way To Begin September.

The same data that scared the market yesterday was used as the reason why stocks were weak at the open. Then as the day went on stocks seemed to be firming and ready to mount a rally. Unfortunately, another talking Fed head--Janet Yellen from San Francisco Fed--made hawkish comments about inflation. That helped stocks selloff into the closing bell on higher volume.

By the end of the day, the Dow Jones Industrial Average led to the downside with a .7% loss, the Nasdaq lost .6%, and the SP 500 and SP 600 both lost .5%. The bad news, once again, was the fact that leading stocks led to the downside, with the IBD 100 falling .9%.

Volume was a tad higher on both exchanges, giving the Nasdaq and the NYSE two distribution days in two days. Breadth was running 2-to-1 negative over positives on both exchanges.

This is one tough market, no doubt. If you are long anything over 25% of your account in this tape, you are simply playing with fire here. The market has too many negatives in line right now that makes being 100% long here quite stupid.

The rallies are now being sold, AAII proved today that there is too many bulls, we are overbought on almost EVERY oscillator out there, we have NO new leaders in exciting industries, two distribution days in two days, the IBD 100 continues to lead to the downside and lag to the upside, and negative seasonality with it being September. Is that enough for you?

Fighting the facts stated above seem super silly right now. Cash is kind and until there is more of a solid uptrend investors should remain on the sidelines. There is still nothing to get too worried about but if we get a few more distribution days in the next two weeks I will be really worried that the market may be in serious trouble.

Besides that I have stated everything I can on this market already. This is a tough market and there isn't much sense in trying to trade it unless you enjoy going crazy.

This bad market will only help setup a longer, prettier, and stronger technical pattern that will launch many stocks out of well formed bases. When that will happen, no one knows. We just need to keep our watchlist updated and keep an eye out for any HOT stocks building nice bases. When we start to see a bunch of them then it will be safe to invest long again. Until then the trend is your friend and our friend is confused like a mofo. So let's stay confused with it and stay on the sidelines.

I will see you at Investors Paradise!! Have a great day!!


New Swing Longs: NGPS IGT CHIC GENT

Adding To Positions: AVNC

New Swing Shorts: MTB TDW ITG VOD

Longs Outperforming (low vol non-IBD excluded): Q-95 CXW-26 CTCI-63 IHS-46 AVNC-40 MWRK CHINA HMSY WEBX MA BEBE TRMA LMT ISYS DKS CGX CTCM GISX AHS EMS AIQ LMNX MFA ALTH

Shorts Outperforming: SWC-39 ZRAN-28 GYI-24 XPRSA-15 DDE-15 PII POOL WTI DSL CPF EXBD HYDL FDX USU KNOT SIGI GSF CFC KMP KMR ASH PTR IXC

Completely Cover Shorts: ARO

Stocks On Radar Screen: PEBK BRS CPC DPII CMRG PLM

Sellers Come Out Hard Against The Low Volume Rally; Stocks Suffer An Ugly Distribution Day.

A series of economic numbers including the productivity report showing that the cost of labor rose the highest in 16 yrs. helped reignite fears that the Fed may have to keep hiking rates. That along with a nasty layoff announcement from INTC helped knock stocks down across the board.

When all was said and done, the SP 600 led to the downside with a 2% loss, the Nasdaq followed with a 1.7% haircut, the SP 500 fell 1%, and the Dow Jones Industrial Average helped up the best with a .6% loss. The IBD 100 and SOX led to the downside, once again, continuing the trend of lagging, with the indexes falling 2.3% and 3.3% respectively.

Volume was higher on today's selloff, with the Nasdaq's volume higher than the 50 day volume average. This shows that the big boys have returned and they are returning as sellers. Breadth was horrible with decliners over advancers by a 3-to-1 margin on the Nasdaq and by a 4-to-1 margin on the NYSE.

There were a lot of economic numbers for everyone to digest out there--Fed Beige Book, ISM Service Index, and the Productivity report--and I guess traders picked and choosed the one they wanted. Unfortunately, for the bulls, today, they picked on some great numbers (wage gains).

Today's losses was the first distribution day since the follow-through day in August. One distribution day is normal but if two or three more pop up in the next two weeks we will know for a fact that the low volume rally is officially being sold. Right now we are only beginning to confirm what all the overbought oscillator indexes have been telling us for a week or so--that the market was overbought. Everyone and his brother was expecting this and the market made those expectations come to fruition; you will not see that happen often, in the stock market.

Another tell on the weakness today was the fact that the IBD 100 again led to the downside. This index (besides yesterday) has continued to lead to the downside and lag to the upside. This along with the SOX leading to the downside has to give traders enough of a hint that the tech rally's time is not yet.

We will have to see if the selling continues giving us more distribution days and a clear "get out" signal or if buyers step in and support stocks. No one knows the future so we have to be prepared for either scenario. Predicting the future is bottom line ignorant and a moron's play on the market.

Stay heavy in cash; I recommend no more than 25% in longs and 25% in shorts. Stay patient, cautious, and keep your watchlist updated for possible new longs when the market makes a real turn. Your portfolio will thank you for your due diligence.

I will see you at Investors Paradise, Aloha!

New Swing Longs: INPH

New Swing Shorts: IXC ASH PTR XHB

Longs Outperforming (low vol non-IBD excluded): Q-95 OMRI-30 CXW-26 WGA CTCM ACGL SEIC DGX VTIV MA AIQ MNG HNZ RMR

Shorts Outperforming: NTE-46 SWC-37 ZRAN-26 GYI-23 BPFH-17 DDE-18 XPRSA-15 PII IYT PDCO WTI WERN CPF DSL NCI EXBD HYDL USU FDX GSF CCO KG CPE CFC KMP NGS KMR ARO SIGI

Stocks On Radar Screen: ACP

Leading Stocks LEAD Markets Higher; Volume Only Below Average To Average.

Traders returned to their desk in a buying mood, following a long holiday weekend, picking up where they left off last week. In a day where leading stocks, small-caps, and technology led, the market managed gains across the board.

At the close the SP 600 rallied 1.1%, the Nasdaq 1%, the Dow Jones Industrial Average .8%, and the SP 500 .7%. The best news of the day came in the form of the IBD 100. That index rallied 1.4%, leading the other averages. That is what you want to see in a strong market. It is late but better late than never.

Volume was much higher on the NYSE and the Nasdaq, as was to be expected coming off a pre-holiday trading session. However, at the close volume was still well below average on the NYSE and just barely made it over the 50 day volume average on the Nasdaq. Breadth was positive with advancers over decliners by a 9-to-7 margin on the NYSE and by a 3-to-2 margin on the Nasdaq.

This market appears bullish on the short-term as leading stocks have now decided to join this rally. That along with a lot of different sectors joining on the gains today makes for a bullish tape. The Internet, Financial, Oil, Metals, Retail, and Semiconductor Sectors all saw good gains.

However, how I feel on the long-term has not changed after today. I have gone over every single bearish reason I can on the market, over and over, here and at Investors Paradise. If you go over the last five to six post on this blog and take some time to read some of the 'General Market Observations' and 'General Market Questions' comments left by extremely knowledgeable readers, you will see why there is plenty of reason to not trust this rally. I am still keeping all new buys small, unless they are in the Medical field. Those charts are very pretty and they are all holding up after purchases so I feel comfortable buying a little more of those stocks. If they are not Medical and/or in an Industry with an A- or better rating at IBD, I would seriously question why you want to go long these stocks.

I am a trader. I have to trade. It does a little extra damage in markets that are whippy like the one we are having but by sticking to my method I am ALWAYS invested in the next bull market before it starts and can roll those profits into better charts as they appear. I still don't think we are ready for one of those big rallies like 2003 any time soon. Tradeable rallies: yes; big giant bull market: no.

I hope you enjoyed your long weekend and were ready for today. I am sure there will PLENTY of fireworks to come in the upcoming days and weeks. I will see you at Investors Paradise. Aloha!!

New Swing Longs: DKS ACGL CUP ZTM AIQ LYG

Adding To Position: ALTH

Longs Outperforming (low vol non-IBD excluded): CVO-141 AKAM-157 KNOL-156 Q-91 CTCI-64 SYKE-40 TYL-39 BTJ-26 GROW HSR NEU BW IMKTA AHS TTEC ALY KAI WEBX NITE ABCB IDXX ORB PRFT IIVI ISYS BMC MWRK INWK CGX HCSG TRMB BMR VTIV SEIC GISX RNST DUCK BEBE EGN LMT BRR MA ALTH MNG MEH VC ABMD STEC NU WGA

Shorts Outperforming: GTRC-19 IYT WERN XPRSA NCI EXBD FDX CCO KMP

Completely Cover Shorts: RES AME HCBK FRC X ATPG NC STNR CBD

Stocks On Radar: CHAP MVSN SIMG MOLX INPH XING VMI ICOC HERO AXE PLC NXG PLM ABB FSL GNA TIVO

With Nobody Around, Traders Bid Stocks Higher; Enjoy The 3-Day Labor Day Weekend!

On a day lacking of traders, the few that remained found no problem bidding stocks higher as a good job's report number was the only reason they needed. The buying that they did helped the Nasdaq join the SP 500 and the Dow Jones Industrial Average in hitting three month highs.

At the closing bell, the Dow Jones Industrial Average was up .7%, the SP 500 up .6%, the Nasdaq up .4%, and the SP 600 lagged with a .3% gain. That finished off a week that saw the SP 600 lead with a 2.6% gain, the Nasdaq follow with a 2.5% gain, and the Dow Jones Industrial Average and the SP 500 finished with 1.6% and 1.2% gains respectively.

Obviously, volume came in lower than the day before, as traders headed out to turn a 3-day weekend into the beloved-on-Wall Street 4-day weekend that every holiday turns into. This makes it 17 in a row on the SP 500 and 11 in a row on the Nasdaq for volume coming in under the 50 day volume average. Advancers beat decliners by a 2-to-1 margin on the NYSE and by a 4-to-3 margin on the Nasdaq.

There are a lot of conflicting opinions right now on what this market is supposed to do. I am in the I-Don't-Know camp. I like it here. But what I do know is the facts and what the facts tell us is that there are some bullish reasons for this market and there are a lot of bearish reasons. So what are they?

The positives aren't that much but there is the fact that the II Survey of bulls/bears did meet at the same level June--that rarely happens, the Nasdaq is up 3.7% since its follow-through in July, everyone is expecting a September selloff based on cycles, lots of stocks are breaking out--not all are holding but this is better than in June, and tech and small-cap stocks are leading big-cap stocks.

The negatives are a bit more convincing. The yield curve is inverted, AAII Survey shows that bears dropped to a low level, the II Survey has been showing more bulls and less bears the past week, the IBD 100 is lagging the market--normally in raging bulls this index leads, the McClellan oscillator is overbought, the ARMS index is overbought, the 10 dma of the adv/dec line is overbought, and we rallied on very low volume.

There are other bullish and bearish reasons out there but these are the ones that are coming to my mind as I type this. After looking at everything and taking it in, I would say you have to put me in the "I am following the trend but I am not trusting it AT ALL" camp. The negatives FAR outweigh the positives.

The only other thing of interest I noticed today was the fact that IBD has plastered GROW on every market recap and Nasdaq summary it can create. Why did they have to talk about it so much? Sheesh, LOL. The breakout probably will not work now (I am joking) as it will be ready by everyone everywhere as the only stock that looked HOT after Friday's market. Oh well, with the earnings and sales growth I am sure some IBD traders aren't going to be the reason why this stock rallies or falls.

Volume should return sometime next week, as the vacations end and the traders return to their desk. This along with the 50 day volume average coming in should make it clear where the big boys are putting their money to work in the coming days. Volume is what we are going to need to be able to establish and make a commitment to one side or the other. This driftless action makes it pointless to try to trade too much and hit homeruns that can not be hit.

With that I leave you with the famous words of Rick James performed by Dave Chappelle on the 'Chappelle Show.' "Eat, drink, and be merry b*tch*s!"

Have a great Labor Day weekend and I will see you at Investors Paradise.

New Swing Longs: GROW

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excluded): DSGX-54 IHS-53 SYKE-39 BAM-47 DA-37 CXW-25 NEU MWRK ORB BW LMT HCSG NITE BTJ ALY VRGY RNST IDXX SZE INWK VTIV DIGE SEIC IMA WNR PT WEBX MO EGN TRMA DJO BRR EMS MA STEC LNCE ICI WGA

Shorts Outperforming (all): NTE-46 SWC-36 ZRAN-25 GYI-23 POOL FRC XPRSA EXBD NGS

Completely Cover Shorts: USG MAS HSY EL

Stocks On Radar Screen: LNN PRXL VMI TPL VOCS SCA ACTI FRG PLM CRAY HLTH ZTM GMTC EAR ICA BIOV