Tuesday, November 11, 2008

Nasty Open Receives A Bullish Bounce But By The Close We Fizzled Out On Higher Volume

Well there is no doubt about it. This is one ugly market with not much working to the long side. That means that unless you are holding heavy amounts of cash, inverse ETF's, or a heavy amount of shorts, chances are you are having a very rough time going about the market right now.

I hope that everyone that is reading this is listening to me when I say that cash is the right place to be. If you are not listening to me and are instead trying to bottom fish like so many of the horrible market talking heads on CNBC and other financial websites are telling you to do, then you are probably having a very rough time trying to make headways in the market.

If you look at the end of the commentary, you can see that I have done very well on the short side this year, after several years of operating on the bull side. This should convince everyone by now that I know how to make money in every market condition. If you are still not convinced, well then, there is nothing else I can do. I have my past big winners for my longs and have shown you the gains in my shorts from November to January and March to now. If you have followed me into my shorts, you have done very well. If you have done the opposite of me, you have not done well.

Speaking of not doing well, do you know that DRYS is down 92% this year. Do you know that I had three people attack me at the beginning of the year that DRYS was going higher. They were mad that I only took a 100% gain on the stock and then sold it and said it topped. They yelled and screamed at me and called me names. Funny thing is...they were all very wrong and I was right. And that is what it is all about. Your opinions don't matter unless you make money. I didn't care about DRYS the company. I only cared about DRYS the stock. The stock told me it topped and was heading lower. Those who did not listen bought it at the top and now hold a 92% loss.

The bottom line is that in this market it does not pay to be a hero if you do not know what you are doing. I would like to think that even though I have been online since only 2005 in my blog form and 1999 in chat rooms that I still would deserve some respect due to my very strong stock picking abilities. It is one of the few things that I do very well in life. The fact that so many could say to buy the market when I have been saying to sell the market all year is mind boggling.

What makes it more stunning is that those that want to buy the market have a lot of money and have a lot of ignorance. To think that a market that is showing no leadership should be bought is crazy. Do not listen to these constant bottom-callers. They have been wrong all year and that is why Cramer's Action Alert portfolio is down 38% this year while my worst account is down 7% this year. I cut my losses and do not bottom fish. Cramer neither cuts his losses and he bottom fishes. Folks, if you are listening to him, in this market, you will suffer a lot of damage. Please do not buy stocks in this market environment.

When should you buy stocks? That is easy. Keep it simple my friends. All you have to do is wait for some strong clear accumulation days to show up in the general stock market, you need to see the indexes price get above the 50 and 200 day moving averages, and we must see leading sectors with leading stocks breaking out to new highs.

Right now, we do not have that. We have zero leadership and when we do have bullish sessions the past month the top 10 industry groups constantly come from the bottom 20% of the 197 industry groups. This shows that we are not in a bull market and are instead in a primary bear market that has oversold conditions that lead to relief rallies. Until these relief rallies become real rallies on strong volume with leading stocks moving, caution must be advised.

The only good news I have is that the news out there is horrible. News flow is extremely negative and a lot of my members show sign of fatigue. While this is normal I must remind everyone that giving up now and walking away from the market is the worst mistake you can make. You must not give up in bear markets and must do your best to make a little money or SAVE ALL OF IT so that you can have a TON of ammo to use in the next bull market.

No matter what the next round of leaders are, with a VIX over 60 and once near 90, you can believe that when stocks get moving again the leading stocks with the best charts will rack up some huge gains. If some of you still do not believe in charts, you might want to check my Past Big Winners to your personal portfolio. I have a feeling value investors are NOT doing nearly as well as CANSLIM investors right now. Value investors are buying these sharp falling knifes. CANSLIM investors are waiting for the perfect moment to get very long on full margin to get wealthy. For now, CANSLIM investors know that cash is king and if you are experienced that going short is the name of the game.

Great luck everyone, make sure you check out the returns on my shorts and my two longs QCOR and ANCI and remember even though I am making a little money now, WHILE SOME LOSE IT ALL, I will make even more when the bear turns into a bull. All fresh bull markets like 1999 and 2003 are very good for me. Even if the next bull is in 2012 you can be sure 300% to 2000% winners will be in my portfolio. I would love to see them in yours also. So don't give up. Live a life like Jimmy V!!! Never give up. Never give up!

Have a great night/day/afternoon/evening from Maui. Aloha!

Free Youtube Video:

Part one and part two full version available for Gold and Platinum members in the Gold Forums.

top personal longs/(shorts) and total return: QCOR 34% (CEO 40% RIMM 53% AAPL 41% OKE 35% POT 50% SDA 67% CAJ 29% PLCE 20% IPHS 15% CEDC 48% CYT 52% AMX 44% CETV 76% ARB 41% SPG 30% APD 41% ATHR 40% SBAC 47% SPW 67% CPRT 16% MOS 60%)

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