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Monday, September 22, 2008
Sunday, September 14, 2008
Wild Day Of Trading Leaves Indexes Mixed With Little To Show For It Up Or Down
September 13, 2008
Well, well. It certainly was an interesting day on Friday as more horrible drubbings hit WM, AIG, and LEH. Add that to FNM, BSC, FRE, and the previous insurance stocks and you can see how a lot of people have probably had their you know what handed to them. If they were on margin at any point trying to “find” the bottom, it is probably a lot worse.
But as everyone that has been reading this blog has known, you NEVER hold stocks that are trending below the 50 day moving average with the 200 day moving average trending above the 50 day moving average. These stocks are not only ugly and laggards but they are clear GET OUT signals. Anytime you are in a stock in an uptrend and they roll over and a “death cross” happens while the stock is moving lower, it is time to get out–NO QUESTIONS ASKED. You normally find out much later the real cause. Those that would have done that with FRE and FNM would have been out around $60 and $40 respectively. Notice we were not buying those laggards here.
Remember all the mean people that told me to load up on the banks back in March. Well, I wonder if any of them are still alive or if they committed suicide recommending me to buy JPM or LEH. Granted it hasn’t been a horrible ride for JPM, YET. But LEH proves that bottom fishing is still a stupid game practiced by those that do not know how to really make money in the stock market. Anyone with a brain knows that YOU NEVER BUY A STOCK trending below the 30 week moving average and you NEVER SHORT a stock trending over the 30 week moving average. If my past big winners in 1999, 2003-2007 did not prove to you that buying stocks while the indexes are in uptrends and to avoid stocks by going into cash when they enter downtrends like they did on October 31, 2007, nothing will ever prove it to you.
Maybe these facts will hit you with some realizations. Comparing 2003 to 2008 lets look at how many stocks have made big gains to now compared to the same time in 2003. In 2003 there were 13 stocks up 1000% by now; this year there is 0. In 2003 there were 92 stocks up 750% by now; this year 0. In 2003 there were 180 stocks up 500%; this year there is 4. In 2003 there were 412 stocks up 200%; this year there is ONLY 12. And the biggest proof we are in a TOTALLY different market is that in 2003 there were 949 stocks (by the way, that still exist on the exchanges after 4 years) up 100% compared to ONLY 50 this year!!! If that doesn’t prove to you the trend of the market is important-NOTHING WILL.
One more burden of proof is that in 2003, the FTD came on volume that was huge and took the price over the 50 and 200 DMA on the Nasdaq. The entire uptrend had the price above the 50 DMA with the 50 DMA above the 200 DMA the WHOLE WAY in 2003 going into its short-term top in 2004. By contrast, in 2008, our indexes have been in severe downtrends with price below the 50 DMA with the 50 DMA below the 200 DMA the entire way.
If this still does not prove that is important to you let’s take a look at China. The whole way in 2006-October 2007 (when China topped too), the indexes price stayed above the 50 DMA with the 50 DMA above the 200 DMA. The few times the 50 DMA did not hold the 200 DMA was there to support the index (but it didn’t need to be as the index immediately ALWAYS took back the 50 DMA). And this year as China is down 65% from the top in October you can see price has been below the 50 DMA with the 50 DMA below the 200 DMA the entire way down.
I am not sure when people will learn to only invest with the trend when it is up and to stay out of stocks when they are moving lower. But I feel it is my calling to try to help all of you from having a -20% portfolio like Cramer has this year. My worst port is down 7% and that is my girlfriends portfolio that was given to me IN OCTOBER (at the TOP!)!! So compare my 7% loss in her account and my overall 10% gain this year (which by my standards is HORRIBLE but compared to Cramer is FANTASTIC) to so many out there that bought FNM, FRE, LEH, BSC, AIG, WM, and stocks like RDN and MBI the whole way down. I think you know who is doing better. That is why my subscribers are killing the crew at realmoney.com which is made up of a lot of horrible “Wall Street bag men.”
Nobody and I mean nobody who subscribes to me is down 20%, if they are using my techniques EXACTLY like I tell them to. So to all of you who do not go with the trend, God bless you. You are going to need the big man upstairs. If you still don’t understand why the trend is so important, you might want to pick up books written by Livermore, Loeb, O’Neil, Weinstein, or Darvas. They will change your life.
I will add more to this on Sunday. But for now ALOOOOOOOOHA!!!! Enjoy the market wrap up video. I know it is hard to see but subscribers get crystal clear Camtasia studio versions. So give us a try, you will NOT be disappointed.
Friday’s Market Wrap:
Gold and Platinum Subscribers Get Full Screen View and Part Two (longs in my scans) and Part Three (shorts in my scans)
Well, well. It certainly was an interesting day on Friday as more horrible drubbings hit WM, AIG, and LEH. Add that to FNM, BSC, FRE, and the previous insurance stocks and you can see how a lot of people have probably had their you know what handed to them. If they were on margin at any point trying to “find” the bottom, it is probably a lot worse.
But as everyone that has been reading this blog has known, you NEVER hold stocks that are trending below the 50 day moving average with the 200 day moving average trending above the 50 day moving average. These stocks are not only ugly and laggards but they are clear GET OUT signals. Anytime you are in a stock in an uptrend and they roll over and a “death cross” happens while the stock is moving lower, it is time to get out–NO QUESTIONS ASKED. You normally find out much later the real cause. Those that would have done that with FRE and FNM would have been out around $60 and $40 respectively. Notice we were not buying those laggards here.
Remember all the mean people that told me to load up on the banks back in March. Well, I wonder if any of them are still alive or if they committed suicide recommending me to buy JPM or LEH. Granted it hasn’t been a horrible ride for JPM, YET. But LEH proves that bottom fishing is still a stupid game practiced by those that do not know how to really make money in the stock market. Anyone with a brain knows that YOU NEVER BUY A STOCK trending below the 30 week moving average and you NEVER SHORT a stock trending over the 30 week moving average. If my past big winners in 1999, 2003-2007 did not prove to you that buying stocks while the indexes are in uptrends and to avoid stocks by going into cash when they enter downtrends like they did on October 31, 2007, nothing will ever prove it to you.
Maybe these facts will hit you with some realizations. Comparing 2003 to 2008 lets look at how many stocks have made big gains to now compared to the same time in 2003. In 2003 there were 13 stocks up 1000% by now; this year there is 0. In 2003 there were 92 stocks up 750% by now; this year 0. In 2003 there were 180 stocks up 500%; this year there is 4. In 2003 there were 412 stocks up 200%; this year there is ONLY 12. And the biggest proof we are in a TOTALLY different market is that in 2003 there were 949 stocks (by the way, that still exist on the exchanges after 4 years) up 100% compared to ONLY 50 this year!!! If that doesn’t prove to you the trend of the market is important-NOTHING WILL.
One more burden of proof is that in 2003, the FTD came on volume that was huge and took the price over the 50 and 200 DMA on the Nasdaq. The entire uptrend had the price above the 50 DMA with the 50 DMA above the 200 DMA the WHOLE WAY in 2003 going into its short-term top in 2004. By contrast, in 2008, our indexes have been in severe downtrends with price below the 50 DMA with the 50 DMA below the 200 DMA the entire way.
If this still does not prove that is important to you let’s take a look at China. The whole way in 2006-October 2007 (when China topped too), the indexes price stayed above the 50 DMA with the 50 DMA above the 200 DMA. The few times the 50 DMA did not hold the 200 DMA was there to support the index (but it didn’t need to be as the index immediately ALWAYS took back the 50 DMA). And this year as China is down 65% from the top in October you can see price has been below the 50 DMA with the 50 DMA below the 200 DMA the entire way down.
I am not sure when people will learn to only invest with the trend when it is up and to stay out of stocks when they are moving lower. But I feel it is my calling to try to help all of you from having a -20% portfolio like Cramer has this year. My worst port is down 7% and that is my girlfriends portfolio that was given to me IN OCTOBER (at the TOP!)!! So compare my 7% loss in her account and my overall 10% gain this year (which by my standards is HORRIBLE but compared to Cramer is FANTASTIC) to so many out there that bought FNM, FRE, LEH, BSC, AIG, WM, and stocks like RDN and MBI the whole way down. I think you know who is doing better. That is why my subscribers are killing the crew at realmoney.com which is made up of a lot of horrible “Wall Street bag men.”
Nobody and I mean nobody who subscribes to me is down 20%, if they are using my techniques EXACTLY like I tell them to. So to all of you who do not go with the trend, God bless you. You are going to need the big man upstairs. If you still don’t understand why the trend is so important, you might want to pick up books written by Livermore, Loeb, O’Neil, Weinstein, or Darvas. They will change your life.
I will add more to this on Sunday. But for now ALOOOOOOOOHA!!!! Enjoy the market wrap up video. I know it is hard to see but subscribers get crystal clear Camtasia studio versions. So give us a try, you will NOT be disappointed.
Friday’s Market Wrap:
Gold and Platinum Subscribers Get Full Screen View and Part Two (longs in my scans) and Part Three (shorts in my scans)
It Was A Nice Rally But Overall We Haven’t Gone Anywhere
September 12, 2008
It is extremely late and I am too tired to write a market commentary so my YouTube smaller sized video will have to do for the people who like reading the commentary daily.
Remember, this is the small sized YouTube video. Subscriber get the full screen version along with the usual part two and part three that follow with me going over my long scans and the last video going over my short scans.
Enjoy, Part One and make sure you pay close attention as following the trend will always make you a lot of money:
Subscribers get full screen size and the rest of the videos that I make thoughout the day!!
It is extremely late and I am too tired to write a market commentary so my YouTube smaller sized video will have to do for the people who like reading the commentary daily.
Remember, this is the small sized YouTube video. Subscriber get the full screen version along with the usual part two and part three that follow with me going over my long scans and the last video going over my short scans.
Enjoy, Part One and make sure you pay close attention as following the trend will always make you a lot of money:
Subscribers get full screen size and the rest of the videos that I make thoughout the day!!
Weak Bounce On Lower Volume Shows That The Bulls Don’t Have Much Gas In The Tank
September 10, 2008
This market continues to do what I told you it would do as soon as we came back from Labor Day. Since then, I have been practically on top of this market not missing anything.
The only personal problem I have run into is how come I do not put as much money into my “for sure” sort of shorts. Like I know AAPL, BIDU, RIMM, and GOOG are all breaking down heavy and as we see their marketminder they sure are breaking down with some people staying on the ask giving everything they want to people bidding for these broken stocks.
The main thing to remember, if you have been watching the videos that are now coming with these market commentaries is that without low volume on the selloffs that is followed by heavy volume on the up days, this market will simply keep falling for as long as it has to fall or it will do what it does until accumulation comes in.
The other problem (big problem) with this market is that everytime a beaten down industry tries to come back to life like homebuilders, banks, and insurance companies just more and more problems happen. This is keeping a lid on leading sock is it helps prolong the time we have to wait in this downtrending to sideways moving market.
It simply is not going to be ready until a new industry like a new alternative energy source that pumps out a lot of earnings and huge sales growth. It is going to be a long time until these industry groups show up as a big shakeout must occur where all the past big winners fall and we go through a time of base building that will allow the proper stocks with the right fundamentals to base and eventually build a nice long base that then has a perfect accumulation and distribution pattern in a nice round cup like pattern.
However, I believe we are a long way from a real bottom as I keep saying all the charts that are trying to shape nice bases either carry too little average daily volume, are sub-$1 stocks, or are in industry group that is in the bottom 25% of the entire 197 industry groups that exist in IBD’s data base.
The bottom line is that we are still are no where near a bottom and all of those that continually try to call one are doing nothing but wasting your money. In my worst account I am down 7%. The best growth mutual funds are up only 0% to -5% the past three months. So that should tell you how rough the market is right now. Overall the only place to hide is in medical stocks. I have a few medical stock that have made some nice moves like XSI which produced a 100% in a couple of months. So unless we see a
Free YouTube small version of Part One of the market wrap on Wednesday. The big part one, part two, and part three videos are available to gold and platinum members. Part one is over the general market, part two is going over the longs on my longs scan, part three is the shorts that are in my short scans.
Part one for YouTube (even though it says the 9th, IT IS THE 10th. It is a clerical error:
This market continues to do what I told you it would do as soon as we came back from Labor Day. Since then, I have been practically on top of this market not missing anything.
The only personal problem I have run into is how come I do not put as much money into my “for sure” sort of shorts. Like I know AAPL, BIDU, RIMM, and GOOG are all breaking down heavy and as we see their marketminder they sure are breaking down with some people staying on the ask giving everything they want to people bidding for these broken stocks.
The main thing to remember, if you have been watching the videos that are now coming with these market commentaries is that without low volume on the selloffs that is followed by heavy volume on the up days, this market will simply keep falling for as long as it has to fall or it will do what it does until accumulation comes in.
The other problem (big problem) with this market is that everytime a beaten down industry tries to come back to life like homebuilders, banks, and insurance companies just more and more problems happen. This is keeping a lid on leading sock is it helps prolong the time we have to wait in this downtrending to sideways moving market.
It simply is not going to be ready until a new industry like a new alternative energy source that pumps out a lot of earnings and huge sales growth. It is going to be a long time until these industry groups show up as a big shakeout must occur where all the past big winners fall and we go through a time of base building that will allow the proper stocks with the right fundamentals to base and eventually build a nice long base that then has a perfect accumulation and distribution pattern in a nice round cup like pattern.
However, I believe we are a long way from a real bottom as I keep saying all the charts that are trying to shape nice bases either carry too little average daily volume, are sub-$1 stocks, or are in industry group that is in the bottom 25% of the entire 197 industry groups that exist in IBD’s data base.
The bottom line is that we are still are no where near a bottom and all of those that continually try to call one are doing nothing but wasting your money. In my worst account I am down 7%. The best growth mutual funds are up only 0% to -5% the past three months. So that should tell you how rough the market is right now. Overall the only place to hide is in medical stocks. I have a few medical stock that have made some nice moves like XSI which produced a 100% in a couple of months. So unless we see a
Free YouTube small version of Part One of the market wrap on Wednesday. The big part one, part two, and part three videos are available to gold and platinum members. Part one is over the general market, part two is going over the longs on my longs scan, part three is the shorts that are in my short scans.
Part one for YouTube (even though it says the 9th, IT IS THE 10th. It is a clerical error:
A Not Suprising, To Me, Major Selloff Hits The Markets The Day After I Said A Down 3% Fall Was Probably Around The Corner; Cramer Keeps Buying A Broke
September 10, 2008
Today shocked me about as much as the sun coming up this morning did. This seemed like a perfect reason to bid the market up–and then put out my shorts–so that the usual trend of the overall trend could return. That would be Mr. Downtrend. He has been around since November and even though the downtrend took a semi-time out during the January to August period it is clear stocks are moving lower on every index now.
I have made mention that we have been in a downtrending market since November and made money in shorts from November to January. Since January not much money has been made till August. But recently we have started a downtrend on all the indexes with volume picking up. This has given us a lot of short candidates to mess with and most of them are working. As long as the market continues to selloff on strong volume and rise on lower volume–actually the market can selloff on lower volume so it really doesn’t matter.
The bottom line is that there is no way anyone should be buying stocks and if there is any contributor on another other website recommending buying stocks that are trending lower with the primary trend down with the stock below the 50 DMA and the 50 DMA is below the 200 DMA, you should immediately discontinue reading this contributor that is recommending this stock that is in such a downtrend. And if these contributors are telling you to not cut your losses until you lose 50%, you need to move on to another stock market commentator. These guys will kill you and will make sure you have nothing left in your account by the time the next real bull starts.
So don’t believe the crap you read in the Wall Street Journal, on Thestreet.com, or watch on CNBC. These people have a different paid agenda to drum up business for their market makers to sell into. They tell you, you should do this or that. Then they go and sell into the retail crowd that are buying the BS that they have just drummed up. They sold on the way up. But to get rid of the rest they have to sell on the way down while the market is falling apart. The only way to provide even a little bid is to trick the pubic into placing bids for stocks that they are dumping to you.
It is a big mind game. Do you want to know how to not follow the wrong LIARS on CNBC and the Wall Street Journal? Start by watching my free small size YouTube market wrap videos. Then use those video market wrap ups combined with the William J. O’Neil’s fine Investors Business Dialy “The Big Picture” and their own “market wrap” video and I believe you will be a lot farther along your way to success than you ever will be subscribing to the Wall Street Journal or Realmoney.com. Both of these publications have fallen from respectible sources of information to a big public joke. Look at the price of both parent companies that run both.
To learn how to look at the market the right way and make the big money on the downtrends and the uptrends without falling for the same BS from CNC and the WSJ, start by watching the video below and procede over to IBD to watch the videos there.
Subscribers get access to many videos that look at many different uptrends and dowtrends in the market along with past big winners and day by day analysis of the entire gain. I don’t know it is either me with a bunch of winning stocks in bull and bear markets and a proven track record since 1999 or the dying Cramer with an amazing -18% return this YTD. I think I know which service I would be picking.
Free small size YouTube Version (7 minutes):
Today shocked me about as much as the sun coming up this morning did. This seemed like a perfect reason to bid the market up–and then put out my shorts–so that the usual trend of the overall trend could return. That would be Mr. Downtrend. He has been around since November and even though the downtrend took a semi-time out during the January to August period it is clear stocks are moving lower on every index now.
I have made mention that we have been in a downtrending market since November and made money in shorts from November to January. Since January not much money has been made till August. But recently we have started a downtrend on all the indexes with volume picking up. This has given us a lot of short candidates to mess with and most of them are working. As long as the market continues to selloff on strong volume and rise on lower volume–actually the market can selloff on lower volume so it really doesn’t matter.
The bottom line is that there is no way anyone should be buying stocks and if there is any contributor on another other website recommending buying stocks that are trending lower with the primary trend down with the stock below the 50 DMA and the 50 DMA is below the 200 DMA, you should immediately discontinue reading this contributor that is recommending this stock that is in such a downtrend. And if these contributors are telling you to not cut your losses until you lose 50%, you need to move on to another stock market commentator. These guys will kill you and will make sure you have nothing left in your account by the time the next real bull starts.
So don’t believe the crap you read in the Wall Street Journal, on Thestreet.com, or watch on CNBC. These people have a different paid agenda to drum up business for their market makers to sell into. They tell you, you should do this or that. Then they go and sell into the retail crowd that are buying the BS that they have just drummed up. They sold on the way up. But to get rid of the rest they have to sell on the way down while the market is falling apart. The only way to provide even a little bid is to trick the pubic into placing bids for stocks that they are dumping to you.
It is a big mind game. Do you want to know how to not follow the wrong LIARS on CNBC and the Wall Street Journal? Start by watching my free small size YouTube market wrap videos. Then use those video market wrap ups combined with the William J. O’Neil’s fine Investors Business Dialy “The Big Picture” and their own “market wrap” video and I believe you will be a lot farther along your way to success than you ever will be subscribing to the Wall Street Journal or Realmoney.com. Both of these publications have fallen from respectible sources of information to a big public joke. Look at the price of both parent companies that run both.
To learn how to look at the market the right way and make the big money on the downtrends and the uptrends without falling for the same BS from CNC and the WSJ, start by watching the video below and procede over to IBD to watch the videos there.
Subscribers get access to many videos that look at many different uptrends and dowtrends in the market along with past big winners and day by day analysis of the entire gain. I don’t know it is either me with a bunch of winning stocks in bull and bear markets and a proven track record since 1999 or the dying Cramer with an amazing -18% return this YTD. I think I know which service I would be picking.
Free small size YouTube Version (7 minutes):
September 8, 2008
Well obviously the news of the day was FNM and FRE getting crushed 90% each. For those that know how to read charts you were out of the stocks around $50 in FNM and FRE. So if anyone is actually shocked that the stocks are now trading for under $1, I will say it ONCE AGAIN, you do not have a firm grasp of market history.
Stocks that look great at $50, look better at $40, look the best at $30, can’t be a miss at $20, is an automatic triple at $10, and worthless at $1. That is how is usually goes with 90% of investors out there who think they can trade like that nut Cramer and buy down. He was bullish on the oil pullback that is obviously a top. He makes a comment today that the market is moving on charts and not fundamentals. Does he not understand that in the markets THE FUNDAMENTALS LOOK THE BEST AT THE TOP!! Every bull market ends the same way. With leading stocks showing AMAZING earnings. The stocks top and rollover on huge volume, start a nasty selloff, yet earnings are still amazing and he acts like the world is messed up. No sir, you should know the market tops when earnings look the best. It always has and it always will.
The bottom line is is that these indexes are all in downtrends and being short is now going to pay off more than being long. This also helps seperate the leaders from the losers and eventually allows us to see which stocks are starting to form bases for the next bull run. If it takes a long time for the Nasdaq favorites, oil, ag, manufacturing, and metals stocks to selloff then some very nice long-term bases are going to be made for us that could be the next big leaders in the next bull market.
But some of you seem to think this delays a bottom. I hate to remind you, ONCE AGAIN, that this bull market STARTED in October 2002 and really took off offering up TONS of HOT! and MONSTER STOCKS around March 2003. When you come into the market in 2007–four years after the market started its uptrend–you can be sure that you don’t have much more time for a bullish stock market. But since you entered late and your entry marked a top you can use the next 3 months to 3 years (YES, it could take that long) to study all of my past big winners and all the past big winners of 1890-1996 and see how to hold the 100% to 5000% winners when the market is in a strong uptrend. If you look at China in 2006 and 2007, you can see the exact same pattern that our Nasdaq had in 1999 and 2003. The gains in the Chinese stock while China’s regular market went up 400% prove that when the markets are in an uptrend and stocks are breaking out on huge volume going long is right as long as they are above the 50 and 200 dma and 30 week moving average.
There is nothing that has changed much as all indexes are still in downtrends. The SP600 looks the best but when that index looks good the IBD 100 and IBD 85-85 index looks horrible and are trending well under the 50 and 200 day moving average. That tells you how weak the LEADING stocks are. Combine that with the Nasdaq that can not rise because the leading 4 letter stocks–AAPL RIMM BIDU ISRG GOOG MSFT ORCL CSCO ORCL YHOO–that make up large portions of the index and represent some leaders of the past bull market should show you how weak the market is as these stocks (not all; but most of them) are just now breaking down and even though volume doesn’t seem high. Those that know history know that low volume can start a selloff and then the volume can increase as the stock continues to selloff. I think the market overall was just a good example of that as the Nasdaq started selling off recently with two days of lower volume selling that was followed by two days of above average selling. Now today the index opens strong sells off but can’t get back to much of the loss as it tried to rally late in the day.
This still gives the overall markt a negative look despite some DJIA stocks doing well. The leaders are in the SP 600, the Nasdaq, the IBD 100, and the IBD 85-85. None of these indexes are in the proper trend of trending above the 50 DMA with the 50 DMA above the 200 DMA. No instead, all of these indexes, except the SP 600, are going the exact opposite way.
That is why shorting has been my main way of attacking this market recently but I still am holding a lot of cash as I just can’t trust this market at all as it is still pretty much going nowhere. But with so many trends now below the 50 DMA with the 200 DMA I believe it is safe to go short the leading stocks that have made 100% or more gains during the past bull market from 2002-2007 as long as they setup from a proper short pattern–most look like a heads-and-shoulder top. When the market was going nowhere we did nothing. But now it is trending a bit down and some shorts have definitely started to add up in the portfolio. We will be quick to cut the loss if they do not work, but with the market now trending below the 50 DMA with the 50 DMA below the 200 DMA and all the market leaders breaking down on heavier volume after making ugly bases I am praying the part of my portfolio that is short will make enough money to make up for the heavy cash level that I think is wise to have while the market still is not trending VERY CLEARLY. We are trending down but so many people are still trying to call a bottom that I think we might have a lot more to go to make a five year bull market and the constant bottom callers who just joined the market will not stop trying to call a bottom. Until they shut up and realize they missed the start where the BIG MONEY IS MADE, they will never be able to make the BIG MONEY in the MONSTER STOCKS. Those will be reserved for the best active-investors.
Those that make it through this bear market that study the videos and the rest of my longs and past shorts will be VERY READY for the next bull market. You just have to remember that you can NOT give up during this bear. PATIENCE, PATIENCE, PATIENCE, and more PATIENCE will be required for the selloff to do what it has to do. FNM and FRE going below $1 is not going to put in a market bottom. It is time to get a little more real in this world where reality is the truth. And part of that truth is John McCain overtaking Obama in the latest Gallup poll 48% to 45%!!!!! Now that is some great news to end the day on!!! ALOOOOHA!!
FREE SMALLER SIZE YOUTUBE VERSION OF MY MONDAY MARKET WRAP. THIS IS ONLY PART ONE OF A TWO PART SERIES. SUBSCRIBERS HAVE ACCESS TO FULL SIZE VERSIONS AND THE LONGER PART TWO WHICH GOES OVER IMPORTANT “OTHER” INDEXES AND STOCKS I AM WATCHING ON THE LONG AND SHORT SIDE WITH UNUSUAL ACTION.
Well obviously the news of the day was FNM and FRE getting crushed 90% each. For those that know how to read charts you were out of the stocks around $50 in FNM and FRE. So if anyone is actually shocked that the stocks are now trading for under $1, I will say it ONCE AGAIN, you do not have a firm grasp of market history.
Stocks that look great at $50, look better at $40, look the best at $30, can’t be a miss at $20, is an automatic triple at $10, and worthless at $1. That is how is usually goes with 90% of investors out there who think they can trade like that nut Cramer and buy down. He was bullish on the oil pullback that is obviously a top. He makes a comment today that the market is moving on charts and not fundamentals. Does he not understand that in the markets THE FUNDAMENTALS LOOK THE BEST AT THE TOP!! Every bull market ends the same way. With leading stocks showing AMAZING earnings. The stocks top and rollover on huge volume, start a nasty selloff, yet earnings are still amazing and he acts like the world is messed up. No sir, you should know the market tops when earnings look the best. It always has and it always will.
The bottom line is is that these indexes are all in downtrends and being short is now going to pay off more than being long. This also helps seperate the leaders from the losers and eventually allows us to see which stocks are starting to form bases for the next bull run. If it takes a long time for the Nasdaq favorites, oil, ag, manufacturing, and metals stocks to selloff then some very nice long-term bases are going to be made for us that could be the next big leaders in the next bull market.
But some of you seem to think this delays a bottom. I hate to remind you, ONCE AGAIN, that this bull market STARTED in October 2002 and really took off offering up TONS of HOT! and MONSTER STOCKS around March 2003. When you come into the market in 2007–four years after the market started its uptrend–you can be sure that you don’t have much more time for a bullish stock market. But since you entered late and your entry marked a top you can use the next 3 months to 3 years (YES, it could take that long) to study all of my past big winners and all the past big winners of 1890-1996 and see how to hold the 100% to 5000% winners when the market is in a strong uptrend. If you look at China in 2006 and 2007, you can see the exact same pattern that our Nasdaq had in 1999 and 2003. The gains in the Chinese stock while China’s regular market went up 400% prove that when the markets are in an uptrend and stocks are breaking out on huge volume going long is right as long as they are above the 50 and 200 dma and 30 week moving average.
There is nothing that has changed much as all indexes are still in downtrends. The SP600 looks the best but when that index looks good the IBD 100 and IBD 85-85 index looks horrible and are trending well under the 50 and 200 day moving average. That tells you how weak the LEADING stocks are. Combine that with the Nasdaq that can not rise because the leading 4 letter stocks–AAPL RIMM BIDU ISRG GOOG MSFT ORCL CSCO ORCL YHOO–that make up large portions of the index and represent some leaders of the past bull market should show you how weak the market is as these stocks (not all; but most of them) are just now breaking down and even though volume doesn’t seem high. Those that know history know that low volume can start a selloff and then the volume can increase as the stock continues to selloff. I think the market overall was just a good example of that as the Nasdaq started selling off recently with two days of lower volume selling that was followed by two days of above average selling. Now today the index opens strong sells off but can’t get back to much of the loss as it tried to rally late in the day.
This still gives the overall markt a negative look despite some DJIA stocks doing well. The leaders are in the SP 600, the Nasdaq, the IBD 100, and the IBD 85-85. None of these indexes are in the proper trend of trending above the 50 DMA with the 50 DMA above the 200 DMA. No instead, all of these indexes, except the SP 600, are going the exact opposite way.
That is why shorting has been my main way of attacking this market recently but I still am holding a lot of cash as I just can’t trust this market at all as it is still pretty much going nowhere. But with so many trends now below the 50 DMA with the 200 DMA I believe it is safe to go short the leading stocks that have made 100% or more gains during the past bull market from 2002-2007 as long as they setup from a proper short pattern–most look like a heads-and-shoulder top. When the market was going nowhere we did nothing. But now it is trending a bit down and some shorts have definitely started to add up in the portfolio. We will be quick to cut the loss if they do not work, but with the market now trending below the 50 DMA with the 50 DMA below the 200 DMA and all the market leaders breaking down on heavier volume after making ugly bases I am praying the part of my portfolio that is short will make enough money to make up for the heavy cash level that I think is wise to have while the market still is not trending VERY CLEARLY. We are trending down but so many people are still trying to call a bottom that I think we might have a lot more to go to make a five year bull market and the constant bottom callers who just joined the market will not stop trying to call a bottom. Until they shut up and realize they missed the start where the BIG MONEY IS MADE, they will never be able to make the BIG MONEY in the MONSTER STOCKS. Those will be reserved for the best active-investors.
Those that make it through this bear market that study the videos and the rest of my longs and past shorts will be VERY READY for the next bull market. You just have to remember that you can NOT give up during this bear. PATIENCE, PATIENCE, PATIENCE, and more PATIENCE will be required for the selloff to do what it has to do. FNM and FRE going below $1 is not going to put in a market bottom. It is time to get a little more real in this world where reality is the truth. And part of that truth is John McCain overtaking Obama in the latest Gallup poll 48% to 45%!!!!! Now that is some great news to end the day on!!! ALOOOOHA!!
FREE SMALLER SIZE YOUTUBE VERSION OF MY MONDAY MARKET WRAP. THIS IS ONLY PART ONE OF A TWO PART SERIES. SUBSCRIBERS HAVE ACCESS TO FULL SIZE VERSIONS AND THE LONGER PART TWO WHICH GOES OVER IMPORTANT “OTHER” INDEXES AND STOCKS I AM WATCHING ON THE LONG AND SHORT SIDE WITH UNUSUAL ACTION.
Thursday, September 04, 2008
The Trend Is Still Down On Most Time Frames And People Are Still Trying To Buy “Bargains”; When Will It End–At The Bottom When They Are Broke
September 3, 2008
Today was a basically nothing day as it was just another session that showed an overall weak market in play minus the DJIA which inched up 15 points. This is nothing I would get excited over with the rest of the market falling. So take the gains in the DJIA as it is which I believe was a great session by one stock named General Motors (GM).
The upside leadership remains a joke and even though the SP 500, NYSE are in clear downtrends with the 50 DMA being trailed by the 200 DMA and the Nasdaq is rolling over I am still getting a few NEWBIE investors that are not familiar with the CANSLIM strategy continue to ask me which stock I am buying. I think I have made it clear to platinum investors and I think I will make it clear here.
Unless the stocks sets up just like XSI has in June and August, there is no reason to go long any stock here. I continue to SHOW YOU and REMIND YOU that the best stocks that move up 500% to 3000% during a run that last around 12 months come in BULL MARKETS WHERE THE INDEXES PRICE IS ABOVE THE 50 DMA AND THE 50 DMA IS ABOVE THE 200 DMA. Unless the stock market where the underlying index is coming from is moving up with the moving averages lined up correctly THERE IS NO REASON TO LOAD UP ON ANY STOCK–THIS IS EVEN IF IT HAS SETUP PERFECTLY LIKE XSI. XSI trades too few shares and is too low priced of a stock with the trend being down to yell at everyone to buy it. But if you were a member of my chat room there was no question I was adding to it on 8/13 as it has been the ONLY PERFECT STOCK out there in a market full of ugly stocks. You know why? Because it is in a rising sector called Health Services-Specialized Health Services and the stock is experiencing HUGE EPS and Sales growth where the sales or eps has not been below 114% since the June 2007 quarter.
So you have a stock rallying on strong accumulation and a lot of accumulation, it builds its way from green to max green BOP, and sets up in a nice round perfect chart pattern, while not another single stock looks as good as this stock, and it has EPS 150% and higher the past four quarters with sales 114% and higher the past four quarters. This was an easy long to buy in a negative market as the max green BOP and 95% gain in a little over two months proves it. Why did so many people miss this and why are they recommending stocks down on such strong volume.
I heard a loud talking head on CNBC bought NOV, right after I saw some “smart” analyst tell viewers to buy HAL and NOV yesterday. Did you see how HAL and NOV did today? In a bear market these guys are set out to sell to you. Just like when Heebner was on CNBC telling people to buy PBR. That day I received over 5 questions asking me if I should buy PBR. I tried to sell them on an arithmetic chart how exponentially to an actual climax top it was having. I believe this was on May 20th and if my math is right I saved 5 people 36% as Heebner got the bids from the CNBC viewers to help sell into without crushing the stocks.
When a mutual fund with great returns has gone from $100 million into funds to $7 billion into funds and is now regular guest on investment shows, trust me, they are not out there telling you what stocks to buy. They are telling you what stocks to buy so that they may sell to you. That way your bid keeps the stock from falling too far too fast. If you look at UPL, NOV, HAL, ATLS, RIG, HES, and CLB and if you think you see bargains instead of dangerous stocks on the verge of a major breakdown you really need to either subscribe to this site or take the time to watch my market wrap videos on YouTube which have me going into detail on the major market indexes and why they are so negative right now compared to any time like 1999 and 2003. There is no coincidence that by now we have only had 227 stocks go up 50% this year compared to 1,266 stocks up 50% by this time in 2003. In 2003 there were 587 stocks up over 100%, so far this year there have only been 69. So why are you newbies still buying stocks. Unless it looks like my past big winners or XSI, do not buy it!!! That means there is not ONE STOCK OUT THERE you should be buying. I have screens that show me XSI before they breakout. Those screens are EMPTY right now. So watch out for going long in a downtrending market. You can really lose a lot of money and by the time the real bull market comes you will be out.
Don’t forget to watch my free market wrap videos on YouTube. I have many other videos on past big winners and how I use IBD but that is for Gold/Platinum Members only. Also the YouTube format is a shrunken version so if you want to see a larger sized version sign up for Gold or Platinum and then you get full screenshot videos.
There should be the Wednesday market wrap up by Thursday morning. If it is up earlier I will post a LINK here. ALOOOOHAAA!!
Today was a basically nothing day as it was just another session that showed an overall weak market in play minus the DJIA which inched up 15 points. This is nothing I would get excited over with the rest of the market falling. So take the gains in the DJIA as it is which I believe was a great session by one stock named General Motors (GM).
The upside leadership remains a joke and even though the SP 500, NYSE are in clear downtrends with the 50 DMA being trailed by the 200 DMA and the Nasdaq is rolling over I am still getting a few NEWBIE investors that are not familiar with the CANSLIM strategy continue to ask me which stock I am buying. I think I have made it clear to platinum investors and I think I will make it clear here.
Unless the stocks sets up just like XSI has in June and August, there is no reason to go long any stock here. I continue to SHOW YOU and REMIND YOU that the best stocks that move up 500% to 3000% during a run that last around 12 months come in BULL MARKETS WHERE THE INDEXES PRICE IS ABOVE THE 50 DMA AND THE 50 DMA IS ABOVE THE 200 DMA. Unless the stock market where the underlying index is coming from is moving up with the moving averages lined up correctly THERE IS NO REASON TO LOAD UP ON ANY STOCK–THIS IS EVEN IF IT HAS SETUP PERFECTLY LIKE XSI. XSI trades too few shares and is too low priced of a stock with the trend being down to yell at everyone to buy it. But if you were a member of my chat room there was no question I was adding to it on 8/13 as it has been the ONLY PERFECT STOCK out there in a market full of ugly stocks. You know why? Because it is in a rising sector called Health Services-Specialized Health Services and the stock is experiencing HUGE EPS and Sales growth where the sales or eps has not been below 114% since the June 2007 quarter.
So you have a stock rallying on strong accumulation and a lot of accumulation, it builds its way from green to max green BOP, and sets up in a nice round perfect chart pattern, while not another single stock looks as good as this stock, and it has EPS 150% and higher the past four quarters with sales 114% and higher the past four quarters. This was an easy long to buy in a negative market as the max green BOP and 95% gain in a little over two months proves it. Why did so many people miss this and why are they recommending stocks down on such strong volume.
I heard a loud talking head on CNBC bought NOV, right after I saw some “smart” analyst tell viewers to buy HAL and NOV yesterday. Did you see how HAL and NOV did today? In a bear market these guys are set out to sell to you. Just like when Heebner was on CNBC telling people to buy PBR. That day I received over 5 questions asking me if I should buy PBR. I tried to sell them on an arithmetic chart how exponentially to an actual climax top it was having. I believe this was on May 20th and if my math is right I saved 5 people 36% as Heebner got the bids from the CNBC viewers to help sell into without crushing the stocks.
When a mutual fund with great returns has gone from $100 million into funds to $7 billion into funds and is now regular guest on investment shows, trust me, they are not out there telling you what stocks to buy. They are telling you what stocks to buy so that they may sell to you. That way your bid keeps the stock from falling too far too fast. If you look at UPL, NOV, HAL, ATLS, RIG, HES, and CLB and if you think you see bargains instead of dangerous stocks on the verge of a major breakdown you really need to either subscribe to this site or take the time to watch my market wrap videos on YouTube which have me going into detail on the major market indexes and why they are so negative right now compared to any time like 1999 and 2003. There is no coincidence that by now we have only had 227 stocks go up 50% this year compared to 1,266 stocks up 50% by this time in 2003. In 2003 there were 587 stocks up over 100%, so far this year there have only been 69. So why are you newbies still buying stocks. Unless it looks like my past big winners or XSI, do not buy it!!! That means there is not ONE STOCK OUT THERE you should be buying. I have screens that show me XSI before they breakout. Those screens are EMPTY right now. So watch out for going long in a downtrending market. You can really lose a lot of money and by the time the real bull market comes you will be out.
Don’t forget to watch my free market wrap videos on YouTube. I have many other videos on past big winners and how I use IBD but that is for Gold/Platinum Members only. Also the YouTube format is a shrunken version so if you want to see a larger sized version sign up for Gold or Platinum and then you get full screenshot videos.
There should be the Wednesday market wrap up by Thursday morning. If it is up earlier I will post a LINK here. ALOOOOHAAA!!
The Trend Was My Friend (Down). Was It Yours?
September 3, 2008
I am hoping that a lot of people have realized that the bull market we have had from 2003-to the last day in October was “the bull market.” The facts remain that we are in a downtrend with an overall sideways bias that has made it very hard to make money since January. But now something feels bad and the market feels real heavy.
Not only that, I see charts breaking down from very early topping positions, and I have ag, gold, oil, and other stocks like steel stock breaking down from key breakdown pattern that usually mean the stock is not coming back higher any time soon. This is the time when Wall Street comes out on CNBC and tells you which stocks you should buy so that they may have a market to sell into.
I turned on CNBC for 10 seconds today and saw a guy mention two stocks breaking down with one HEAVILY BREAKING DOWN like his fund was selling to EVERYONE who wanted to buy. The first “buy” recommendation was for HAL. Has anyone noticed that HAL has risen around 400% as a very large cap stock since 2002 till the top that came right after it announced a split. A split is usually a last desperate hope of a big-cap corporation to have small investors find interest in the stock so that they may sell into that crowd. Since that SPLIT the stock is DOWN 36%. During that time the past two months, XSI has risen 85%. Sometimes those you see on TV are not trying to help you AT ALL. There only job is to drum up demand so that they can sell there shares that have topped.
The last recommendation was to “buy” NOV. This stock topped with the rest of the oil stocks around June to July but it held up better than the rest. The only problem was while the stock was holding up it was slowly rolling over below the 50 DMA and the 200 DMA on strong volume. The distribution days are clearly visible on a zoom 5 chart that makes those big red volume distribution bars stick out. Then when I saw it breaking down today below the 50 DMA and 200 DMA on very strong volume I could completely tell that this guy was trying to save his behind in this stock. I am not sure if he was long this ugly stock but if he was not someone he knew was and he was trying to help them. There is NO possible way an intelligent person would be buying a stock that was breaking down on heavy volume after rolling over both key moving average. He had to be on the air to lie to people. After hearing that recommendation, I immediately turned off CNBC and never turned it back on again. When am I going to learn that watching that garbage is nothing but a reinforcement to my Investors Business Daily CANSLIM methodology which continues to crush most analyst gains when they come on air.
Before I go, because you can now get all of my market commentary in video form at youtube. I must say I am shocked at how many people can turn bullish besides the trends being clearly down. I am just a little shocked that so many average people love to buy stocks hitting new lows as they feel they are getting bargains. Folks, if you fail to learn from history, the stock market will eventually wipe you out. I have NEVER been wiped out and I NEVER will be because I cut my losses and only AVERAGE UP when I buy a stock and NEVER average down which is a losing strategy. I just hope you folks are learning a lot right now so that when the bull market does come back. Which it always does you will be ready to score the 100% to 2,800% winners like I was able to do during EVERY uptrend the stock market had from 1998-2008. If the trend of the market is up then your chances of making money increases a lot.
Also another note about the videos. I know the video clarity is not that great but you have to understand gold and platinum users get camtasia versions that come across the computer VERY CLEAR AND PERFECT. The charts are large and everything is clearly legible to read. The small YouTube clip is what you get for free. You get what you pay for and that is why some people are long a lot of cash, like me, avoiding the crumbling to go-nowhere market. And at the same time going decently long stocks like XSI that is up 85% in a little over two months. Some things in life NEVER change. The stock market is one of them. It may act differently and plain “Ol’ Stupid” sometimes but you know what? Every bull market will give you one or two stocks up 1000% and around 10 up 100-300%. We just need a real bull market. Study all my past big winners and you will learn quickly enough how well this methodology works compared to the value guys. I still have not met a value guy who has consistently during EVERY bull market period had a 100% winner much less a stock up 500%. Stick with the CANSLIM system in a bull market and remember to stay in cash in a bear market and you will increase your odds of making money by 50%. Each thing you can add in your favor you should do in a game so unlike the 1980s and 1990s. Boy-oh-boy do I miss those times in the market. That was back when CSCO went up 90,000% from 1990-2000. I miss those days so much.
Have a great day and I hope you a very profitable Wednesday trading session.
I am hoping that a lot of people have realized that the bull market we have had from 2003-to the last day in October was “the bull market.” The facts remain that we are in a downtrend with an overall sideways bias that has made it very hard to make money since January. But now something feels bad and the market feels real heavy.
Not only that, I see charts breaking down from very early topping positions, and I have ag, gold, oil, and other stocks like steel stock breaking down from key breakdown pattern that usually mean the stock is not coming back higher any time soon. This is the time when Wall Street comes out on CNBC and tells you which stocks you should buy so that they may have a market to sell into.
I turned on CNBC for 10 seconds today and saw a guy mention two stocks breaking down with one HEAVILY BREAKING DOWN like his fund was selling to EVERYONE who wanted to buy. The first “buy” recommendation was for HAL. Has anyone noticed that HAL has risen around 400% as a very large cap stock since 2002 till the top that came right after it announced a split. A split is usually a last desperate hope of a big-cap corporation to have small investors find interest in the stock so that they may sell into that crowd. Since that SPLIT the stock is DOWN 36%. During that time the past two months, XSI has risen 85%. Sometimes those you see on TV are not trying to help you AT ALL. There only job is to drum up demand so that they can sell there shares that have topped.
The last recommendation was to “buy” NOV. This stock topped with the rest of the oil stocks around June to July but it held up better than the rest. The only problem was while the stock was holding up it was slowly rolling over below the 50 DMA and the 200 DMA on strong volume. The distribution days are clearly visible on a zoom 5 chart that makes those big red volume distribution bars stick out. Then when I saw it breaking down today below the 50 DMA and 200 DMA on very strong volume I could completely tell that this guy was trying to save his behind in this stock. I am not sure if he was long this ugly stock but if he was not someone he knew was and he was trying to help them. There is NO possible way an intelligent person would be buying a stock that was breaking down on heavy volume after rolling over both key moving average. He had to be on the air to lie to people. After hearing that recommendation, I immediately turned off CNBC and never turned it back on again. When am I going to learn that watching that garbage is nothing but a reinforcement to my Investors Business Daily CANSLIM methodology which continues to crush most analyst gains when they come on air.
Before I go, because you can now get all of my market commentary in video form at youtube. I must say I am shocked at how many people can turn bullish besides the trends being clearly down. I am just a little shocked that so many average people love to buy stocks hitting new lows as they feel they are getting bargains. Folks, if you fail to learn from history, the stock market will eventually wipe you out. I have NEVER been wiped out and I NEVER will be because I cut my losses and only AVERAGE UP when I buy a stock and NEVER average down which is a losing strategy. I just hope you folks are learning a lot right now so that when the bull market does come back. Which it always does you will be ready to score the 100% to 2,800% winners like I was able to do during EVERY uptrend the stock market had from 1998-2008. If the trend of the market is up then your chances of making money increases a lot.
Also another note about the videos. I know the video clarity is not that great but you have to understand gold and platinum users get camtasia versions that come across the computer VERY CLEAR AND PERFECT. The charts are large and everything is clearly legible to read. The small YouTube clip is what you get for free. You get what you pay for and that is why some people are long a lot of cash, like me, avoiding the crumbling to go-nowhere market. And at the same time going decently long stocks like XSI that is up 85% in a little over two months. Some things in life NEVER change. The stock market is one of them. It may act differently and plain “Ol’ Stupid” sometimes but you know what? Every bull market will give you one or two stocks up 1000% and around 10 up 100-300%. We just need a real bull market. Study all my past big winners and you will learn quickly enough how well this methodology works compared to the value guys. I still have not met a value guy who has consistently during EVERY bull market period had a 100% winner much less a stock up 500%. Stick with the CANSLIM system in a bull market and remember to stay in cash in a bear market and you will increase your odds of making money by 50%. Each thing you can add in your favor you should do in a game so unlike the 1980s and 1990s. Boy-oh-boy do I miss those times in the market. That was back when CSCO went up 90,000% from 1990-2000. I miss those days so much.
Have a great day and I hope you a very profitable Wednesday trading session.
Stocks Continue To Drift Around On Low Volume With A Slight Downtrending Bias
There isn't much I have to say this Labor Day except God bless everyone on the Gulf Coast. I am very happy it was downgraded along the way. ONCE AGAIN, the media hypes it like everything else. I am very happy the damage did not occur like Katrina and think it was a CLASS ACT of the RNC to turn its convention into a fund raiser. That is the way to do it!
Back to business, in this low volume market I have made all the key comments I can make the whole week long. The main thing to remember is that the trend is down folks. This is not a market coming from a long-term uptrend or an intermediate uptrend. There has been clear heavier selling compared to accumulation but at least we do have medical stocks looking good. It is hard to go long or short a low volume market and it is pointless as your chances of being whipsawed.
There are very few CLEAN and CLEAR uptrends or downtrends where the stock breaks down at key resistance or stocks bounce at key support. It remains a very random trading arena and unless you are daytrading and even if you are daytrading you need to remember you can be wiped out on one big block order in this market. You can see how quickly stocks fall apart by looking at any insurance or bank stock and you saw how DELL acted Friday. If GOOG, MSFT, BIDU, or any other high-priced stocks start breaking down this market could get ugly. I don't like how some of these stocks have come back up to old highs on EXTREMELY low volume. This gives them up to the perfect opportunity for real sellers to come out and sell on the retail mark-up.
I really am trying to find positives in this market. A few are that that big MER bounce day on HUGE VOLUME is holding and the stock is acting like it wants to retake the 50 DMA. Also RDN, MBI, and ABK all looked like they were going to go under but HUGE ACCUMULATION has entered those stocks with max green BOP helping possibly stick in strong bottoms. There is no guarantee but before this market can even show us its new round of leaders (trust me it isnt just going to be all medical), you have to have the most beaten up stocks with real earnings to show bottoming patterns. And the banks and insurance companies are showing some support. Maybe if tech continues to selloff they can be the next to find the bargain funds that will pick them up that will help us find our next batch of leaders. As you can see by just going through the 197 industry groups in IBD, you can see ONLY medical stocks and a few Service sectors are even in uptrends on the intermediate and sub-intermediate term.
So there is not a whole lot of places to make money outside of medical but medical normally leads in a bear and since they are doing well and we see some stocks possibly bottom it could be not too much longer before we could be closer to the end of this bear. Too bad there will more-than-likely be another leg down (just look at the RS line of the NYSE) since all the former ag, gold, manufacturing, and other agriculture related stocks are starting to rollover. Don't forget oil stocks are also starting to rollover. We could soon be seeing another big move down as NYSE stocks rotate into the Nasdaq. That could be why the Nassy has seen some recent RS gains compared to price recently. Either way, with all the low volume, there is not much to do and I think Jesse Livermore made it VERY CLEAR that the BEST traders DO NOT trade ALL THE TIME and that they only trade when the trend is their friend (we are flat since January--we have no friends) and Gerald Loeb I think says it best below:
“Profits can be made safely ONLY when the opportunity is available and NOT just because they happen to be desired or needed …Willingness and ability to hold funds UNINVESTED while WAITING for real opportunities is a key to success in the battle for invesment survival.”–Gerald Loeb
Enjoy your Labor Day and do not forget I am posting quite a few new PAST BIG WINNERS and other videos this weekend for Gold and Platinum members and pretty soon this weekends PART ONE market wrap should be up on YouTube pretty soon. It is already up for Gold/Plat members in the forums. Enjoy your Labor Day and I will see you tomorrow (Tuesday)!
Back to business, in this low volume market I have made all the key comments I can make the whole week long. The main thing to remember is that the trend is down folks. This is not a market coming from a long-term uptrend or an intermediate uptrend. There has been clear heavier selling compared to accumulation but at least we do have medical stocks looking good. It is hard to go long or short a low volume market and it is pointless as your chances of being whipsawed.
There are very few CLEAN and CLEAR uptrends or downtrends where the stock breaks down at key resistance or stocks bounce at key support. It remains a very random trading arena and unless you are daytrading and even if you are daytrading you need to remember you can be wiped out on one big block order in this market. You can see how quickly stocks fall apart by looking at any insurance or bank stock and you saw how DELL acted Friday. If GOOG, MSFT, BIDU, or any other high-priced stocks start breaking down this market could get ugly. I don't like how some of these stocks have come back up to old highs on EXTREMELY low volume. This gives them up to the perfect opportunity for real sellers to come out and sell on the retail mark-up.
I really am trying to find positives in this market. A few are that that big MER bounce day on HUGE VOLUME is holding and the stock is acting like it wants to retake the 50 DMA. Also RDN, MBI, and ABK all looked like they were going to go under but HUGE ACCUMULATION has entered those stocks with max green BOP helping possibly stick in strong bottoms. There is no guarantee but before this market can even show us its new round of leaders (trust me it isnt just going to be all medical), you have to have the most beaten up stocks with real earnings to show bottoming patterns. And the banks and insurance companies are showing some support. Maybe if tech continues to selloff they can be the next to find the bargain funds that will pick them up that will help us find our next batch of leaders. As you can see by just going through the 197 industry groups in IBD, you can see ONLY medical stocks and a few Service sectors are even in uptrends on the intermediate and sub-intermediate term.
So there is not a whole lot of places to make money outside of medical but medical normally leads in a bear and since they are doing well and we see some stocks possibly bottom it could be not too much longer before we could be closer to the end of this bear. Too bad there will more-than-likely be another leg down (just look at the RS line of the NYSE) since all the former ag, gold, manufacturing, and other agriculture related stocks are starting to rollover. Don't forget oil stocks are also starting to rollover. We could soon be seeing another big move down as NYSE stocks rotate into the Nasdaq. That could be why the Nassy has seen some recent RS gains compared to price recently. Either way, with all the low volume, there is not much to do and I think Jesse Livermore made it VERY CLEAR that the BEST traders DO NOT trade ALL THE TIME and that they only trade when the trend is their friend (we are flat since January--we have no friends) and Gerald Loeb I think says it best below:
“Profits can be made safely ONLY when the opportunity is available and NOT just because they happen to be desired or needed …Willingness and ability to hold funds UNINVESTED while WAITING for real opportunities is a key to success in the battle for invesment survival.”–Gerald Loeb
Enjoy your Labor Day and do not forget I am posting quite a few new PAST BIG WINNERS and other videos this weekend for Gold and Platinum members and pretty soon this weekends PART ONE market wrap should be up on YouTube pretty soon. It is already up for Gold/Plat members in the forums. Enjoy your Labor Day and I will see you tomorrow (Tuesday)!
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