Saturday, February 24, 2007

Indexes All Finish In The Red But Still Finish Well Off The Lows; Leading, Tech, And Small-Cap Stocks Lead This Week

Market Commentary At Big Wave Trading Bronze Level One.

Preview of "Daily Market Analysis" Posting:

Indexes All Finish In The Red But Still Finish Well Off The Lows; Leading, Tech, And Small-Cap Stocks Lead This Week
By MauiTrader

Stocks finally decided to take a break, across the board, as stocks meandered in the red all day, closing off the lows. However, a slight change of character was the fact that there was no last hour rally. That is probably due to most traders starting the weekend early as an exhaustive holiday shortened week comes to an end. There was no doubt that with no economic news of significance today that digesting this week’s gains was a good thing.

When Friday’s session was over, the SP 500 and Nasdaq led to the downside with .4% losses, the DJIA and SP 600 fell .3%, and the IBD 100 held up the best only falling .2%. It was very nice to see leading stocks lag to the downside and the Nasdaq reverse an intraday loss of .7% to a .4% loss. The SOX index outperformed the indexes, once again, rallying .5%, after yesterday’s 2.8% gain.

Even with the losses, there were some sectors that had many stocks producing nice gains on the day. The clear winners were the Electronic-Parts, Electronic-Semi Equip, Computer-Data Storage, Computer-Integrated Devices, Commercial Services-Consulting, Steel-Specialty Alloy, and Metal Ores. If you were long stocks in these sectors, today’s selling didn’t affect you at all.

Volume was lower on the NYSE by a small amount. However, the lower volume combined with the small losses helps the NYSE/SP 500 avoid a distribution day. The volume on the Nasdaq was ever so slightly higher, according to TC2007’s data provider, but the intraday support off the lows with the lack of very heavy volume clearly signals that the big boys were not selling their tech shares today.

Breadth was almost even on both exchanges but there was a slight negative bias on the Nassy. Advancers pretty much were even with declining issues on the NYSE and on the Nasdaq decliners beat advancers by an 8-to-7 ratio.

For the week, it was a tale of two different markets. The big caps definitely felt pressured all week, possibly due to oil making strong gains this week. This was the first week since December that oil closed over $61. This caused the DJIA the worst damage as it helped sink the index .9% on the week. The SP 500 fell .3%, rounding out the big cap damage. However, the story was different, with leading, tech, and small caps. The SP 600 led the way, for the week, with a 1% gain, the IBD 100 gained a wonderful .9%, and the Nassy produced a .8% gain.

Today’s market session was another one of those great intraday reversal session. This was the sixth day in a row that the Nasdaq and the SP 600 rallied off their lows. This action is leaving tails all over the daily charts on these indexes which indicate great support for stocks at these prices. The fact that every dip gets supported is the reason these tails are created. The buyers are simply waiting to buy anything on any dip right now as they try to chase performance.

This week was just like the past eight month. We kept going higher and higher and the little bit of selling that did hit us sure did not do a lot of damage. Speaking of selling not doing a lot of damage, I believe we are now eight months past the last time this market had a real correction. Eight months without a correction is simply unheard of. But here it is and here we are. Where we are is at a point where there are very few great CANSLIM quality stocks breaking out of beautiful well formed bases, big-chips are getting more attention, momo remains HOT in stocks in the solar area, new breakouts are only happening in speculative low-quality cheap issues, and many many stocks are in the middle of climax runs or exhaustion runs. Some of these are showing the clear topping signals. If you are a gold member, you know which stocks I am referring to, because I list my complete and partial sales everyday. You have witnessed me nail many tops on short term and long term runs that stocks are having. This kind of action is the classic action of a market in its late to last stage of a long four-year-plus bull run.

However, this market has ONLY had one distribution day on the SP 500 and Nasdaq the past month. Even with all these new speculative longs, late climax type runs by stocks, and no new CANSLIM quality longs popping up, it doesn’t matter. Until we start getting clear distribution in the indexes, these stocks can keep making climax runs and take off to the moon if they want to. Momo has no logical stopping point; 100, 200, 300, to even 400. Nobody knows when Mr. Momo will stop. And right now does not appear to be that time either.

Did you see the put/call ratio after Friday’s close? The equity put/call ratio, according to IBD, is now a 1.08; the total put/call ratio, on the CBOE, is 1.42. This is stunning!! These are numbers you see after big declines that signal that the crowd is too bearish and that the market is ready to explode. However, seeing this number up here, with the market hitting all-time highs, is unbelievable. Traders are still betting against every uptick. When the market goes higher and these guys have to meet their margin they will be forced to cover their shorts and that only adds gas to the fire. Crazy, crazy, crazy game, trying to predict the top like so many options players are. If you know any of these guys, you really should just sit back and relax and watch them destroy their capital. Their mistakes and horrible trading methodology is a great learning experience on what NOT to do.

The bulls feel and look tired here but they still look a lot stronger than the bears. The bears simply have no control and the bulls are 100% in full control. Especially with the crowd placing bearish bets even though they say they are bullish. These are very disgusting low volatility times we are living in. And the fact that traders are only betting against this market ensures that prices will keep rising and volatility will keep falling. This gives us less bang for our buck.

Lets look at it this way, the eight months after the March 2003 lows produced over 1180 stocks up over 100%. The eight months after the June lows on the SP 500 have only produced 190 stocks up 100% or more. You don’t think low volatily has a difference in price gains? You are wrong. Every stock you see up 50% or more would be double to triple the gains in the 1999 and 2003 markets. You take what you can get. I gave you PTT. That is a 400% gain. Imagine what that would have been in 2003…it is nice to dream.

Aloha and I will see you in the chat room. Have a great weekend!!!

New Swing Longs: Silver Level Two

Look below to see the kind of returns you can expect with my service. These returns are constant. I have been making money every year, in every market condition, since 1996. Bull or bear? It doesn't matter when you have a sound game plan with history on your side.

New Swing Shorts: Silver Level Two

Stocks On My Watchlist: Gold Level Three

Complete Profits/Losses: Gold Level Three

Partial Profits/Losses: Gold Level Three

MauiTrader Forums: Gold Level Three

MauiTrader Chat Room: Gold Level Three

Longs Up On The Day: Gold Level Three

Shorts Up On The Day: Gold Level Three

Top Holdings - Date of signal (purchase the next morning)

PTT 405% - 11/16
KNOL 273% - 1/12/06
SVNT 142% - 8/24
TTEC 131% - 8/25
AOB 123% - 9/12
LTS 119% - 1/11
CCOI 117% - 9/27
ICE 115% - 9/21
CPA 110% - 9/15
CHINA 105% - 8/16
HMSY 103% - 6/23
IHS 103% - 12/21/05
CLEC 99% - 9/25
OMTR 96% - 9/15
ACP 92% - 11/13
IGLD 90% - 10/26
GVP 79% - 11/20
BAM 78% - 11/17/05
ULTR 77% - 10/27
IMKTA 76% - 8/28
HRT 76% - 10/23
NEXC 72% - 10/25
ACY 70% - 2/5
JST 70% - 10/13
TNH 69% - 10/26
BMA 68% - 10/24
HURN 68% - 9/13
FTEK 67% - 10/6
BONT 66% - 10/3
AOI 65% - 11/19
DA 64% - 1/25/06
XIDE 60% - 1/29
CXW 59% - 5/19
IIVI 59% - 8/30
MEMY 59% - 12/21
AMAG 49% - 11/7
CCBL 46% - 10/26
GLDN 45% - 11/21
ORBC 47% - 1/4
SNCR 50% - 12/13
BMTI 56% - 10/25
FTGX 52% - 12/4
PSPT 49% - 8/14
PCCC 60% - 10/26
MOS 48% - 10/12
IMMU 51% - 12/19
TYL 49% - 2/1/06
ECGI 50% - 10/20

Saturday, February 17, 2007

Stock Indexes Erase Early Morning Losses, Rallying Into The Close, Closing Near Their Highs Of The Day

Market Commentary At Big Wave Trading. Bronze Level One

Sample of Commentary from Thursday 2/15/07:

Stocks Indexes Keep Rallying; New Buy Candidates Drying Up As Most Are Extended Beyond Proper Buy Points By MauiTrader

There was plenty of economic data for the market to feast upon, on Thursday. However, neither that or continued testimony by Ben was able to really move stocks one way or the other. Though industrial output fell by the largest amount in 17 months, stocks didn’t mind and were able to close higher across the board, for the third straight day.

At the close, the Nasdaq led the way with a .35% gain, the SP 400 gained .3%, the SP 600 and DJIA followed with .2% gains, and the SP 500 gained .1%. Leading stocks in the form of the IBD 100 index gained .6%, well outpacing the broader index. However, the lagging index, has overall been a disappointment since the rally started in July/Aug.

Volume was lower on the NYSE and the Nasdaq. The lower volume indicates that the big boys weren’t necessarily falling over each other to chase stocks up here, after such a strong day yesterday. Breadth was positive on both exchanges. Advancers beat decliners by a 10-to-7 margin on the NYSE and by an 8-to-7 margin on the Nasdaq.

There seems to be a problem with traders recently. I am starting to hear TONS of complaints about underperformance. Hello, folks. This is what happens when big-caps lead. The small cap, momentum, and tech stocks simply can and will not keep up. This bull market is more than four years old. The small-cap leadership has changed to big-caps. Therefore, obviously right now growth investors are going to underperform the market, unless they are very lucky and are hitting all the home-runs that I am finding very scarce to find out there.

However, I know what the real problem is. Those traders that now complain that they are underperforming were the same traders that were bitching in August that this rally wasn’t real and was only a short-term bounce. Even though stocks were breaking out of sound bases and I WAS GOING LONG STOCKS, people were bad mouthing the market saying that it couldn’t possibly rally on low volume. Well it has and it hasn’t stopped. This market has not experienced a 2% pullback in how long? It is too long. This makes a TON of stocks too extended to buy. And that is good news for people like me who were long when they were supposed to be long. But it is horrible for those watching the market run without them.

Now those same people are demanding to make money with new buys. Well too bad. There are not a lot of SAFE high reward/low risk buys out there. Everything is too damn extended. In the IBD 6000 index, 931 stocks have A accumulation/distro ratings, 2561 have a B, and 1216 have a C. Only 1200 stocks have D or E ratings. This shows that this market is under good accumulation and that constant accumulation makes it hard for people to find stocks not extended. It is best to stay on the sidelines, if you find yourself in this position.

And also, stop the bitching. You missed the right time to load up on CANSLIM stocks and/or HOT momentum stocks. This current market is only offering crap to trade. I have been keeping all buys small since January 1st and will keep that pattern the same until I get a real pullback. Until the market pullsback 5-10%, there is no way in Hell I am going to load up on any breakout from any stock in any sector unless the market is FLYING ON HUGE VOLUME.

Even though there aren’t a lot of stock setting up and breaking out of nice bases, just look at sectors like the Mach-Construction, Commercial Serv-Schools, Steel-Producers, Food-Dairy, and Computer-Data Storage sectors. They are moving up faster than the overall market. Look at all the Medical stocks hitting new 52-week highs; those stocks lead in bear markets and they may be showing up a the top of the new high tables in preparation of a weak market. But the fact is these stocks are making significant gains. All of this means that there is always a bull market somewhere. Just because you are not making money now does not mean everyone else is not also. You are just in the wrong stocks and/or are overtrading in a market environment where cash is probably better off.

Look at the Perritt mutual fund. He holds 177 stocks (similar to me) and yet he has 23% cash. This shows that some other smart investors that love to buy strength can not find a ton of new buys either. Trust me, if you are not making a killing, don’t worry, others are not either. The only difference is they know that this is not the time to make a killing. The market will let us know when it is time to make a killing. Now is not the time, four years into a bull market and seven months without a 2% decline. We need to have a selloff before any significant money can be put to work in the next batch of winners breaking out of beautiful bases. How do stocks break out of bases when the market never pullsback to give these stocks bases to breakout of?

So here we are with a market that has only had two distro days on the SP500 and one distro day on the Nasdaq for the past four weeks. A market where the DJIA is hitting all-time highs and the Nasdaq fights resistance at 2500. The only logical conclusion here is to expect more gains. There is no reason for the market to stop rallying as the wall-of-worry is still very tall and the market loves to climb these walls. The put/call ratio has come down to the .75 area, suggesting the wall is starting to lower. However, with all the bitching I see out there, I am not so sure the market doesn’t have more pain to inflict the under-invested bulls and the perma-top-calling bears.

Unless you are a crazy daytrader, there is not much you should do here but relax and let the market run and accumulate and keep your cash heavy so that when a pullback does happen you will be ready for it with a lot of money. Patience and more patience is very important to have here. This market will either offer us something to trade with the stocks making bases now that are not on the radar screen yet or we will just have to keep watching this rally and enjoy the gains we will make with the longs that are working. Make sure to get rid of the laggards. Don’t keep trash that is not moving up when the market is moving up.

Great luck out there, don’t let this market get to you, and I will see you in the chat room tomorrow. Aloha!!


New Swing Longs: Silver Level Two

Look below to see the kind of returns you can expect with my service. These returns are constant. I have been making money every year, in every market condition, since 1996. Bull or bear? It doesn't matter when you have a sound game plan with history on your side.

New Swing Shorts: Silver Level Two

Stocks On My Watchlist: Gold Level Three

Complete Profits/Losses: Gold Level Three

Partial Profits/Losses: Gold Level Three

MauiTrader Forums: Gold Level Three

MauiTrader Chat Room: Gold Level Three

Longs Up On The Day: Gold Level Three

Shorts Up On The Day: Gold Level Three

Top Holdings - Signal Date

PTT 344% - 11/16
KNOL 265% - 1/12/06
AKAM 251% - 9/30/05
CVO 166% - 8/17/05
SVNT 136% - 8/24
TTEC 124% - 8/25
MA 116% - 8/2
CCOI 111% - 9/27
AOB 111% - 9/12
ICE 110% - 9/21
CPA 108% - 9/15
CLEC 105% - 9/25
CHINA 103% - 8/16
HMSY 93% - 6/23
IGLD 93% - 10/26
OMTR 89% - 9/15
HRZ 88% - 9/27
TRCR 84% - 1/12
LTS 80% - 1/11
IMKTA 78% - 8/28
JST 76% - 10/13
ACY 57% - 2/5
TNH 73% - 10/26
LFL 49% - 12/13
TATTF 53% - 12/13
FTEK 66% - 10/6
BMA 67% - 10/24
CXW 57% - 5/19
IIVI 57% - 8/30
IMMU 46% - 12/19
XOMA 45% - 1/12
MOS 45% - 10/12
BAM 74% - 11/17/05
GVP 60% - 11/20
HRT 69% - 10/23
PCCC 56% - 10/26
ULTR 55% - 10/27
NEXC 69% - 10/25
DA 59% - 1/25/06
ECGI 47% - 10/20
AOI 58% - 11/19
BMRN 50% - 6/1
NWK 66% - 12/13
BMTI 64% - 10/25
WGA 54% - 8/30

Saturday, February 10, 2007

The Tip-Off I Refered To On Wednesday Had Its Follow-Through On Friday

Market Commentary At Big Wave Trading. Bronze Level One

New Swing Longs: Silver Level Two

New Swing Shorts: Silver Level Two

Stocks On My Watchlist: Gold Level Three

Complete Profits/Losses: Gold Level Three

Partial Profits/Losses: Gold Level Three

MauiTrader Forums: Gold Level Three

MauiTrader Chat Room: Gold Level Three

Longs Up On The Day: Gold Level Three

Shorts Up On The Day: Gold Level Three

Top Holdings - Signal Date

PTT 314% - 11/16
AKAM 252% - 9/30/05
KNOL 243% - 1/12/06
CVO 175% - 8/17/05
SVNT 149% - 8/24
AOB 138% - 9/12
ALTH 132% - 6/9
MA 110% - 8/2
OMTR 82% - 9/15
CHINA 106% - 8/16
TRCR 101% 1/12
JST 96% - 10/13
IHS 93% - 12/21
GVP 93% - 11/20
CCOI 91% - 9/27
MEH 91% - 8/30
ICE 102% - 9/21
TTEC 120% - 8/25
ALTH 88% - 6/9
IGLD 85% - 10/26
CPA 90% - 9/15
MALL 75% - 11/6
HRZ 83% - 9/27
HMSY 88% - 6/23
CLEC 82% - 9/25
HRT 76% - 10/23
FTEK 71% - 10/6
IMKTA 75% - 8/28
MEMY 91% - 12/21
ACP 70% - 11/13
NWK 62% - 12/13
BAM 59% - 11/17
STEC 60% - 8/17
WGA 60% - 8/30
PCCC 60% - 10/26
TRBN 57% - 10/31
BMA 57% - 10/24
CKSW 55% - 10/11
DA 53% - 1/25/06
TNH 55% - 10/26
AOI 59% - 11/9
AMAG 51% - 11/7
PSPT 50% - 8/14
IIVI 55% - 8/30
BMTI 69% - 10/25
RMKR 48% - 11/14
TYL 48% - 2/1/06
ICAD 48% - 1/11
ULTR 46% - 10/27
CXW 56% - 5/19
HOTJ 49% - 11/17
KHDH 48% - 5/30
NEXC 51% - 10/25
RMKR 50% - 11/14
XIDE 56% - 1/29
LTS 56% - 1/11

Wednesday, February 07, 2007

Stocks Find Intraday Support, Again, With All Indexes Closing Higher On The Day; Leading Stocks Continue Outperformance

Market Commentary At Big Wave Trading. Bronze Level One

New Swing Longs: Silver Level Two

New Swing Shorts: Silver Level Two

Stocks On My Watchlist: Gold Level Three

Complete Profits/Losses: Gold Level Three

Partial Profits/Losses: Gold Level Three

MauiTrader Forums: Gold Level Three

MauiTrader Chat Room: Gold Level Three

Longs Up On The Day: Gold Level Three

Shorts Up On The Day: Gold Level Three

Top Holdings - Signal Date

PTT 282% - 11/16
AKAM 252% - 9/30/05
KNOL 243% - 1/12/06
CVO 175% - 8/17/05
SVNT 145% - 8/24
AOB 138% - 9/12
ALTH 132% - 6/9
MA 124% - 8/2
OMTR 118% - 9/15
CHINA 106% - 8/16
TRCR 101% 1/12
JST 96% - 10/13
IHS 93% - 12/21
GVP 93% - 11/20
CCOI 91% - 9/27
MEH 91% - 8/30
ICE 91% - 9/21
TTEC 90% - 8/25
ALTH 88% - 6/9
IGLD 88% - 10/26
CPA 87% - 9/15
MALL 84% - 11/6
HRZ 83% - 9/27
HMSY 83% - 6/23
CLEC 82% - 9/25
HRT 76% - 10/23
FTEK 71% - 10/6
IMKTA 70% - 8/28
MEMY 69% - 12/21
ACP 66% - 11/13
NWK 62% - 12/13
BAM 62% - 11/17
STEC 60% - 8/17
WGA 60% - 8/30
PCCC 60% - 10/26
TRBN 57% - 10/31
BMA 57% - 10/24
CKSW 55% - 10/11
DA 53% - 1/25/06
TNH 52% - 10/26
AOI 51% - 11/9
AMAG 51% - 11/7
PSPT 50% - 8/14
IIVI 49% - 8/30
BMTI 49% - 10/25
RMKR 48% - 11/14
TYL 48% - 2/1/06
ICAD 48% - 1/11
ULTR 46% - 10/27
CXW 47% - 5/19
HOTJ 45% - 11/17
KHDH 48% - 5/30

Friday, February 02, 2007

Leading Stocks And Small Caps Lead As Stocks Rise Again; SP 600, NYSE, And DJIA All Hit All-Time Highs

Market Commentary At Big Wave Trading. Bronze Level One

New Swing Longs: Silver Level Two

New Swing Shorts: Silver Level Two

Stocks On My Watchlist: Gold Level Three

Complete Profits/Losses: Gold Level Three

Partial Profits/Losses: Gold Level Three

MauiTrader Forums: Gold Level Three

MauiTrader Chat Room: Gold Level Three

Longs Up On The Day: Gold Level Three

Shorts Up On The Day: Gold Level Three

Top Holdings - Signal Date

PTT 282% - 11/16
AKAM 241% - 9/30/05
KNOL 227% - 1/12/06
CVO 174% - 8/17/05
SVNT 145% - 8/24
AOB 138% - 9/12
MA 126% - 8/2
JST 94% - 10/13
TRCR 98% 1/12
CHINA 96% - 8/16
OMTR 99% - 9/15
IHS 94% - 12/21
GVP 93% - 11/20
CCOI 85% - 9/27
TTEC 90% - 8/25
ICE 89% - 9/21
ALTH 88% - 6/9
MEH 86% - 8/30
CPA 87% - 9/15
HRZ 83% - 9/27
CLEC 82% - 9/25
IGLD 81% - 10/26
HMSY 80% - 6/23
MALL 77% - 11/6
STEC 60% - 8/17
FTEK 68% - 10/6
IMKTA 70% - 8/28
HRT 62% - 10/23
WGA 60% - 8/30
TRBN 57% - 10/31
NWK 62% - 12/13
BAM 56% - 11/17
CKSW 54% - 10/11
RMKR 48% - 11/14
AOI 51% - 11/9
DA 53% - 1/25/06
MEMY 63% - 12/21
AMAG 51% - 11/7
ROCM 49% - 1/3
IIVI 45% - 8/30
PSPT 50% - 8/14
TYL 48% - 2/1/06
ICAD 48% - 1/11
BMA 48% - 10/24
PCCC 50% - 10/26
ULTR 46% - 10/27
TNH 52% - 10/26
CXW 45% - 5/19
HOTJ 44% - 11/17
KHDH 48% - 5/30