August 2, 2008
Even though inedexes closed down .5%, they really did not go very far but they did do it in a very choppy motion. So unless you like turbo trading support and resistance for peanuts then there really is not a whole lot to do. I do understand that some people love daytrading and love to spend all day trading. Well if you enjoyed Friday then you are for sure a diehard market fan. It simply is not the way I want to spend my time. Now rewind back to 1999. I was making a TON of money HOLDING stocks. Not daytrading. But if I was bored had access cash and did not have perfect stocks to invest I could and would daytrade. I have to admit it was not as much fun as I did not get to see my pretty max green BOP charts and I did not like the feeling my heart had when I had multiple positions on. But if that is what you like doing then enjoy daytrading.
Right now, I think trading to the downside is the right game but as it is clear the markets are trending below the 50 and 200 day moving average. I tell you what, if some of you are impatient and can not stand having on longs (even if the chat is ugly; why???) all you need to do is go out and have fun until you at least see the price bars above the 50 day moving average. Once you see that you know that in the short term prices are moving higher. Then you can go in and look for max green BOP beauties like my XSI long that I have on. It isn’t perfect but nothing is in this market. I just want you to study all the green all over that chart and notice the perfect bounce/breakout on volume in late June. If you still don’t see these after the 50 DMA is taken then sooner or later you will once the indexes prices on the averages cross back above the 200 DMA. Once the indexes are above the 50 and 200 DMA there will be a few green filled BOP charts (hopefully) for us to enjoy.
If not there will be at least some CANSLIM quality longs that will show up in our new leading industry groups that will produce some huge returns. Trust me when this market turns I will be in the leading stocks in the new leading industries with the perfect CANSLIM stocks. If the chart is loaded with max green and breaking out of a perfect pattern or the stock is a perfect CANSLIM quality long breaking out of a solid pattern we will be long and ready to make a lot of money.
I know a lot of people are sick of waiting this market out but that has to be done or else you looked like all those idiots that were yelling at me in January that the market bottomed an that buying bank stocks had to be done. Well some told me to load up on JPM, some told me to load up on GS (that wasn’t that bad of a pick), but some told me I was an idiot for not buying MER. Well thankfully I saved myself I think a 50% loss. But I do want to explain how I look for potential bottoms. First off I love to see sentiment like it is now. I think the put/call has backed back off which shows that we are bit too complacent which is not good. Before we were a bit fearful as the put/call hit numbers like 1.3 on the most recent low which was real bearish. That showed the dumb money was definitely buying puts which is bullish long term.
On top of that, the bears in the investors intelligence survey were just hitting 50%. That is the first time in five years that 1/2 of the newsletter writers were bearish. That goes along with the weak week before that showed only 27% bullish which was also a five-year low. These are some extreme numbers. The only thing that would have been better was a put/call ratio around 2.0 as the 1.3 reading while high was still below the 1.4 levels in March. Still it was bearish out there.
However, there is one stock in particular that I am watching to help tell me if we have put in a tradeable low. My first clue that we have one is that my two most recent near-perfect charts have hit me with immediate advances one lasting 15 trading sessions and one lasting one month. And one stock that had a HUGE bullish intraday reversal on the largest volume ever after many years is my bullish tell. I will need all three stocks to continue to work in fashion for me to believe that my baby rally with a weak market can last. It is just nice to know you that we can make some gains after such a long time of ugly action. DGLY and PDO were godsends while BRKR, BKE, BCO, and AEHR were typical of a market near the end of a bullish trend. I personally hope the worst is over but something deep down tells me “yeah right big boy.”
Some of the reasons I don’t believe we are at a real bottom is just because I hear too many people talking about how they would like this to be the bottom. That is not the usual “I give up” repsonse by most market players that I nomrally hear at bottoms. But I have to admit I only briefly catch stuff from CNBC, the free chat rooms, and random comments at Realmoney.com. But just those few visits tells me a lot about a market and even though many are VERY BEAISH on this market a lot are still “believing” in a bottom. Normally for there to be a real bottom people have to completely give up. I don’t feel like people have completely given up. I know that the fact that I see some hot chats working indicate to me that the market could be at a bottom. But if I don’t get much more from my two longs that are near-prefect and instead the gains end abruptly, like DGLY and PDO, I will be upset and sad and ready for more losses before we can get gains.
Trust me, my hot chart will come back, just like they have in all bull markets. But trust me that patience and finding other hobbies is necessary in markets like this. If you spend every day waiting for a TASR or FMDAY of 2003 to come along, you will wear yourself out and blow yourself out via boredom and burnout. Poor market conditions throw up too many ugly charts and unless you love shorting America and the market it is very possible that you will burn yourself out and by the time the end of a 2002 to 2003 market comes, you will be long gone and miss the beauties like USNA and EPIC. Both were beautiful and perfect and both were missed by 90% of investors who failed during the 2000-2002 market fallout.
Why did I survive and why will I survive this bear market and the next? I love this game!!! You must love this game if you are to make money. If you get involved in the stock market to make money, you can do it but it sure is not easy. My love of this market is the reason I am holding cash saving myself from financial ruin like so many others while being long a few stocks that are moving higher despite the falling market. I love this game and my love for this game ensures that you could make money if you too love this game. I promise you one thing. In my hands, you are very safe. Just study all my past big winners from 1999-2008, notice how similar they are, and remember I will find these and make a lot of money in the next market environment that rewards me for finding these kind of charts. I can’t wait. I hope you are excited as me. In fact, I hope you are more ecited than me. Some of you are but some of you are impatient. Thank God you were not around during 2000-2002, you never would have received SINA, SOHU, GRMN, SSYS, USNA, HIL, FMDAY, TASR, EPIC, EVOL, MOBE, or even IST, AAPL in 2004. Life was good then and life will be good again shortly.
It is very rough right now but without these moments, I would not have the moments like 1999 and 2003 that I use to make a career. Anyone can get lucky for a year, but can you beat the market year in and year out? Not only that when you have the chance to destroy the market do you? You must not beat the market every year but in the few years when the market is up 10% to 50% you need to beat the market by double to triple the returns. Once you get in a real bull market and the market gives you the max green BOP charts with top CANSLIM ratings you need to KILL the market. If you can do that while just beating the market in years like this you will make a fortune by the time you retire.
Those of you that read this site to get rich quick, you better pray I find another MAMA in December of 2006 or a BFUN in 2003. MAMA was a 230% gain in 11 days and BFUN was a 250% gain in 10 days. That doesn’t happen too often and both were max green BOP and huge accumulation charts that I went long for quick huge gains. They didn’t last long but I recognized it was beauty over CANSLIM quality and they were very fun. However, the chances of finding them again in this market are nill. We will need another exciting bull market. Don’t fall asleep. It will be a while. Aloha and I will see you in the chat room where quiet weekends turn into wild weeks. Just like I like it!!! ALOHA!!!!!
No comments:
Post a Comment