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: