Tuesday, November 18, 2008

Stock Market Indexes Start The Week Off With A Low Volume Selloff; All Indexes Are Holding Thursday's Lows

Stocks did what they have been doing for the entire past thirteen months and that was finishing with a lower close. This weak close was made worse in that it was yet another volatile late day move. This time it was a rollover to the downside with the indexes finishing right near their lows-of-the-day.

This very weak close was very nasty to see but some consolation can be taken with the low volume that came with the selling. That lower volume was the second straight day of a lower volume pullback that has come since the reset of the rally attempt on Thursday.

On Thursday the market dipped to new lows on a few indexes that reset the previous rally attempt. However, by the close, the market reversed to a very bullish close on much higher volume. That put market players who have been watching this selling for thirteen months now in a better mood.

The pullback the past two days have made some pretty upset that the market can't hold onto the gains. However, these people refuse to look close enough to even understand that it is on lower volume and that there is a chance that we could rally and move higher for God knows how long.

The only problem with moving higher here is that I am without ANY leadership. There has not been one pullback or bear market that I have been in where there isn't at least one sector with more than 1 or 2 stocks moving up. Right now I have two medical stocks up over 30% since I went long but there should be more showing up with better chart patterns if this was a true bear market leader. The fact none of the brother or cousin stocks are showing up for possible breakouts is a bit worrisome.

I do have a new long tonight but there are two major problems with this long. First off it is below $5 a share. There is not one single stock out there that is a leader that is priced under $5. Now in a new and fresh bull market you can find a lot of stocks turning around their EPS, sales, and stock via a really bad bear market (like some of my best longs in 2002 and 2003). The only problem is that if this is not going to turn into an uptrending market, it might fall hard. The last problem is the fundamentals. I think all I need to tell you is that the EPS rating is a horrible 5. If that doesn't tell you how bad the numbers are nothing will.

But I will play any near-perfect setup for some lunch money, in case this market turns. If it doesn't, well then, I will make a good amount of money. I am still short 34 stocks and 33 out of 34 show a profit. The only one that does not was my most recent short and it still has not given a full cover signal. So there is still time for it to fail and work out in the long term. Even if it doesn't work, shorts like CEO 40% OKE 39% SDA 73% AMX 44% LLL 27% POT 57% APD 44% SPW 69% MOS 63% AAPL 45% GGB 62% ARB 48% CPRT 25% SBAC 53% IPHS 30% SPG 40% and CETV 85% more than make up for it.

This market is still in a primary downtrend and it doesn't look like anything wants to move up just yet so until it does keep that powder dry and your cash level very high.

By the way, I submitted a Worden Report on how to "survive a/this bear market" and I really hope he publishes it. I do make one reference to a few of my subscribers being up 60% to 80% and that might prevent it from publishing. But if he does publish it, look for it sometime this week or next week, as he did receive a lot he said. If he does not publish it, I will not be sad, instead I will publish it here. :)

Have a great day/afternoon/evening/night and I will see you tomorrow in the chat room. Like always and almost all day long like usual.

Gold and Platinum subscribers can watch full size versions of part one and part two in the Gold forums. Free part one youtube version below:

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