Thursday, February 19, 2009

Stocks Have A Wild Intraday Session But Close Basically Mixed To Flat; Once Again, The Bulls Should Be Happy That Yesterday’s Selloff Did Not Lead To

Stocks were mixed today with lower volume on the NYSE and the Nasdaq. Overall stock indexes leaned to the downside but the DJIA was up 0.04% today showing itself as the diamond in the rough. The worst index was the SP 600 falling 1.1%. Despite the tiny losses today I would have to say that this has been another positive 'day-after' following another very bearish market session. We have seen the market fall at least 3% in at least five-sessions since 2009. Any of those selloffs on heavier volume could have broken into a big downtrend. However, after every nasty selloff we are seeing some sort of minor support coming into the markets.

Now this support is not on heavy volume and leading/hot! stocks are still not participating by setting up in proper bases with strong fundamentals that are followed by big breakouts on strong volume. While these stocks continue to not show up it is clear that the market is not ready to trend up or down in a very harsh momentum fashion.

It does appear the market is ready to rollover and hit new lows and the long-term shorts that I have that are still working and making me good money, there have been some recent new shorts that are working wonderful since we went short. The fact that these new shorts are working along with our old shorts still working indicates to me that the trend is still down. Especially with all time-frames pointing down on all indexes. The long-term trend, the intermediate trend, the sub-intermediate trend, and the short-term trend are all down right now and that must be respected.

The only difference with this leg down is that for the first time since the last LAME rally attempt from March to May in 2008 we actually have the few leading sectors of the market actually racking up gains. Like I said in previous post most of the top industry groups that have been showing up on IBD's top industry groups have already been strong for a while and whenever they made it to the top were soon putting in toppy formations. This happened to small banks, medical, security, and education stocks in 2008. This time mining-gold/silver is leading and their charts in that industry group still look very fresh with a lot of the chart patterns forming that look good coming from very early points in the bases. So if we have ever had a chance to make money on longs this is the time with mining-gold/silver stocks clearly leading.

While it is nice to see some leaders moving FINALLY, you must remember that the market is still not rallying on heavy volume. Instead the pattern of higher volume selloffs followed by lower volume rallies continue. This is the pattern of a market that should be shorted on the low volume rallies and not bought when the rallies start. Only when we have more CANSLIM quality and "HOT to perfect" chart setups will I get fully bullish. Until better leaders lead the way higher and the market rallies on lower volume, I will just take what I can in the current leaders and take my profits on the way up at the 25%, 50%, 100%, 150%, 200%, etc. marks.

Remember as the trend of a nation's GDP goes so goes its stock market. The Fed indicated today that GDP would fall in 2009 and that they will be more transparent. While the transparency is always good it is not good that we have a falling GDP. This means that our P/E ratios are too high right now and that they will have to come down to be considered "great value" plays for the lame fund managers that use P/E ratios to make their investing decisions.

This is a very nasty news driven market that is making it impossible for long-momentum and CANSLIM investors to make money. Your odds are always against your favor in a downtrend but a downtrend lasting so long without a little rally is a very discouraging thing and can only mean that when we do bounce and those leading stocks do show up that they will KILL IT as most investors will be looking the wrong way when it is time to load the boat.

But with the market being at the whim of the news, all of this Obama mortgage plan crap, bailouts, and SPENDINGULUS bills can't be good for the market long-term. I wouldn't mind having a spendingulus bill rally that sends some stocks on speculative runs allowing us to make BIG MONEY so that we can turn around and short it when the house of cards built on socialism's lies come crashing down.

I would rather be DEAD! than live in a world of complete Socialism! Long: THE TRUTH and Capitalism - GREED Short: ANY form of centralized planning--communism, socialism, environmentalism, marxism, and the other scummy slimeball sick-in-the-head big-government brainwashed economically-ignorant elitist parties.

top shorts with their total returns since my first purchase MAKING ME MONEY TODAY: AAPL 41% CETV 91% CEDC 80% SDA 78% CYT 66% AMX 49% GGB 59% OKE 41% RIMM 57% IPHS 41% AMSG 21% RDK 29% PRGO 21% MCY 24% BOH 15%


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