August 21, 2008
When it comes to making a living in the stock market I have had no problem doing that for the past thriteen years. But all of a sudden this year, this trendless market has made it near impossible to make a lot of money. There are a few mutual funds that are up for the year but the majority of the greatest funds and greatest traders are finding it very difficult to make money in a market that simply does not go anywhere.
Now, while we have had some big winners like PDO, XCO, and DGLY, we have also had some disappointments like BRKR BKE and AEHR. If this would have been a start of a bull market, like 2003 was, after the 2000-2002 downtrend, I am sure they would have all worked but for right now things still rarely work. But it is obviously clear to me that this market is not moving up or down and that it is just going nowhere. Why then, in God’s name, why would you be wanting to be going long or short stocks.
It is clear from where I sit that stocks are going nowhere and the number one thing that I look for when I am going long stocks is to see if the market averages are rallying on heavier volume. I don’t just want to see one stock move higher, while the rest of the market indexes and the rest of the stocks are going lower. I want to only go long stocks where the whole market is moving higher thus putting the odds incredibly in my favor.
I mean if you just compare the returns from 2003 to this year, it should become fairly obvious that there were about 1000 more stocks making 100% moves by now. I have not had one stock up 100% for me this year. If this contiues to be the case it will be the first time since 1996 that I will not have owned at least one stock that went up at least 100%. If you look at all the beautiful perfect chart patterns with green to max green BOP in 2003 and then try to find any this year you will find your adventure useless. There is nothing nice out there and I can’t see anything coming around the bend any time soon. I have one long that I am long that is very pretty and I see one stock setting up that is very pretty. But back in 2002 before 2003 was coming I know I saw at least 10-20 stocks that were loaded up with green BOP and perfect price and volume patterns. The fact they are not around now is a big enough clue for me that I need to be patient and just exercise waiting for that right time to get back in the market.
For all of you itching for action, you are showing your immaturity and ignorance by trying to go long stocks here. I recently posted a video that showed just how sloppy MPWR was. MPWR was such a recently beloved stock that had many of my newbie subscribers going long despite the fact that I did not go long. I was clueless as to why these people like the stock so much so I made a video on it. After watching the video I hope that some of you now know what an ugly chart looks like. And for those that have already seen the XSI (9 minute video) video you will see there was a major difference between that HOT! chart (which really isn’t even that hot compared to my past big winners from 99 and 03) and the difference between stocks like OPTR, MR, and MPWR.
I know that for most of you the videos will be big help in helping you being able to see exactly what I see and the reason why I pick certain max green filled stocks over some near-CANSLIM long positions. These videos should be very powerful and should be able to show you how easily it is for me to scan through my charts, quickly eliminate the ugly charts, and focus on the powerful charts that are loaded with accumulation and green BOP. This will be a feature that I am sure will help some of you recognize why I love a chart like XSI over a chart like MR or MPWR.
Getting back to this market that is as dead as can be. A driftless market on low volume is an impossible market to trade and the amount of trading that I am seeing out of newbies is quite disturbing. I continue to tell all of you young guys to STOP TRADING, THAT THERE IS NO TREND, AND THAT THERE IS NO VOLUME TO HELP MAKE A LOT OF MONEY ON ANY STOCK THAT DECIDES TO MAKE AN ACTUAL MOVE. The best thing to do right now is nothing. Going long is almost guaranteed to leave you trapped in a falling stock and if you go short right now the chances are high that even if it does work you will be hit with many reversal that are so painful that it will probably scare you out of your position before it ultimately goes lower (GS and BG are both recent examples that are moving lower without me even though I was short these stocks on their intial breaks).
Right now, it is all about protecting capital and that is what I am preaching right now. Be careful out there and wait for un uptrend to resume before getting
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