by Market Speculator
After gapping higher at the open sellers took over the market sending stocks lower throughout much of the day. Fueling selling was another hiccup in the Treasury Auction as yields once again moved higher. Fears over the credit quality of the United States and inflation is sending Treasury holders to demand higher yields. Crude oil didn't help matters as the commodity hit $71 a barrell. In the face of this bad news buyers stepped up late and turned into what would have been a major distribution day into a minor distribution day. Once again, we are seeing underlying strength even when it appears the market is about to break to the downside.
Taking a look at New Highs vs New Lows only 8 New Lows were made on the NYSE and NASDAQ. More than 116 New Highs were made during today's session. The only way to view this is in a positive light. Remember, ultimately two things are needed: price/volume and leadership. New Highs vs. New Lows are simply a secondary piece of information that we can use to analyze the market. However, it will never trump the importance of leadership and price/volume action.
Today our quality growth stocks failed to get the same lift as the overall market did. Although the overall market action was positive the action from leaders was not as good. By no means is this a serious flaw or we the "SELL ALL SIGNAL" should be set it is something that should be noted. We need quality growth stocks leading the market and today was a sign that we may still have a few kinks in the armor to work out.
We are 13 weeks into this confirmed market rally and have seen junk-off-the-bottom (jotb) stocks lead this market higher. I continue to reiterate the 1938 market because it is highly correlated to the current market. It took over 3 months for leadership to emerge as leadership for the 1938 summer rally. In terms of the 1938 rally we are just in the early part of what potentially could be a nice rally continuing.
Remember to keep your losses short and your eye on the ball.
top longs w/ TOTAL returns since purchase making money TODAY: CHLN 56% ISTA 58% KONG 85% ACTG 21% ANV 36% CYOU 22% FIRE 65% CAST 37% COOL 44% THM 22% RBY 41%
top speculative longs for PLAT members w/ TOTAL returns...TODAY: RAD 221% ANPI 190% PWAV 101% FCS 82% CMRG 77% CSUN 57% SNIC 67%(3 DAYS) GOK 48% KAD 61% JADE 44% PRC 37% TMR 22% RODM 38% CSIQ 50% SOL 49%
FREE YouTube Video to help you analyze the market CORRECTLY:
Showing posts with label Gold Silver Nasdaq NYSE SP600 SP500 Platinum IBD SP400 USDollar. Show all posts
Showing posts with label Gold Silver Nasdaq NYSE SP600 SP500 Platinum IBD SP400 USDollar. Show all posts
Wednesday, June 10, 2009
Tuesday, June 09, 2009
Ten Banks Repay TARP Funds as Quality Growth Stocks and the NASDAQ Take the Lead
Quality growth stocks and the NASDAQ took over leadership today as volume rose on the NASDAQ but pulled back on the NYSE. Volume on the NASDAQ ran higher all day long showing the price action had institutional support. Even more important quality growth stocks emerged once again as leaders in the market. Over on the NYSE volume was tempered by the financials as ten banks are set to pay back TARP money. Reaction was mixed from the banks as it was mostly priced into the market. Overall, notch another positive day for the market.
It was very nice to see quality growth stocks stepup and take over leadership as we need these stocks continue to lead us higher. We have seen a few quality stocks that passed their pivot points on volume. Being able to spot these winners and get in them is what this game is all about. In addition, getting the leaders with size, meaning your position size is a substantial part of your portfolio. For example: if you put on a 1% position, in order for your portfolio to grow 1% that position needs to move 100%. However, having a 10% position to grow your portfolio by 1% all you need is a 10% gain. Remember, this will only work if you are cutting your losses short. By not doing so, you run the risk of completely destroying your trading capital. Position sizing is important when you are in a confirmed uptrend with quality growth stocks are at the helm.
Highlighting cutting your losses, every successful stock market operator always cut their losses short. Many pros often times will cut a position with only a 3% loss. I for one will use anywhere between 3% and 8% cut loss. It is the "art" of managing your portfolio. Factors such as how leading stocks are acting, the overall market, and how the position is acting all go into factoring where I will cut a stock loose. Remember, you are trading to make money, not lose it. The most important part regarding managing your portfolio is cutting your losses short and being prepared to get into a leader.
All positive action occuring in the market with quality growth stocks leading and positive ratios such as the NH vs NL. More importantly, we are seeing excellent opportunities to get long stocks that are the leaders and we are not missing out.
Keep your eye on the ball and stay nimble.
top longs w/ TOTAL returns making money TODAY: ORS 22% AVNR 54% CHLN 48% ISTA 51% SIGA 55% ANV 32% KONG 85% COOL 39% ADAT 25% ASCA 31% ABVT 31% PALM 34% CAST 30% CRAY 30% NAK 21% FIRE 44% ARST 36% NGD 27% CLRT 25% RBY 33%
top speculative longs off the bottom TOTAL returns making money TODAY: TELK 45% RODM 32% CSUN 37% CSIQ 48% IPCS 61% CFW 61% GRRF 87% PWAV 98% AHD 21% TXIC 26% SOL 43% VIT 35%
FREE YouTube video to help teach you how to interpret market action CORRECTLY:
It was very nice to see quality growth stocks stepup and take over leadership as we need these stocks continue to lead us higher. We have seen a few quality stocks that passed their pivot points on volume. Being able to spot these winners and get in them is what this game is all about. In addition, getting the leaders with size, meaning your position size is a substantial part of your portfolio. For example: if you put on a 1% position, in order for your portfolio to grow 1% that position needs to move 100%. However, having a 10% position to grow your portfolio by 1% all you need is a 10% gain. Remember, this will only work if you are cutting your losses short. By not doing so, you run the risk of completely destroying your trading capital. Position sizing is important when you are in a confirmed uptrend with quality growth stocks are at the helm.
Highlighting cutting your losses, every successful stock market operator always cut their losses short. Many pros often times will cut a position with only a 3% loss. I for one will use anywhere between 3% and 8% cut loss. It is the "art" of managing your portfolio. Factors such as how leading stocks are acting, the overall market, and how the position is acting all go into factoring where I will cut a stock loose. Remember, you are trading to make money, not lose it. The most important part regarding managing your portfolio is cutting your losses short and being prepared to get into a leader.
All positive action occuring in the market with quality growth stocks leading and positive ratios such as the NH vs NL. More importantly, we are seeing excellent opportunities to get long stocks that are the leaders and we are not missing out.
Keep your eye on the ball and stay nimble.
top longs w/ TOTAL returns making money TODAY: ORS 22% AVNR 54% CHLN 48% ISTA 51% SIGA 55% ANV 32% KONG 85% COOL 39% ADAT 25% ASCA 31% ABVT 31% PALM 34% CAST 30% CRAY 30% NAK 21% FIRE 44% ARST 36% NGD 27% CLRT 25% RBY 33%
top speculative longs off the bottom TOTAL returns making money TODAY: TELK 45% RODM 32% CSUN 37% CSIQ 48% IPCS 61% CFW 61% GRRF 87% PWAV 98% AHD 21% TXIC 26% SOL 43% VIT 35%
FREE YouTube video to help teach you how to interpret market action CORRECTLY:
Monday, June 08, 2009
Late Day Support as Stocks Pull Back for the Second Consecutive Day on Lighter Volume
by Market Speculator
Wall Street was a ghost town as volume limped well below Friday's level all day long. As stocks opened lower selling took hold, but selling was well contained as stocks found support throughout the day. It was a bullish sign for the second straight day to clear overbought conditions that existed from last weeks run. Bulls took control at the end of the day pushing stocks near the highs of the day at the close. Once again showing the underlying strength in the market. Another great day of consolidation giving stocks time to digest the recent gains.
The level of New Highs continues to outpace New Lows, again underlining the strength of this market. Remember, we need to have the NH vs. NL ratio in our favor to get Monster Stocks. Monday saw 115 new highs while only 13 stocks made new lows. Quickly doing the math that is nearly a 10 to 1 ratio of NH vs. NL. An impressive ratio considering the market ended on the downside.
Leading stocks were somewhat mixed today lagging the overall market. Taking a look at most of the leaders they found support and closed in the upper range of the day. Typically, we want leaders to always lead and never lag the overall market. We'll be paying attention to these leaders as to how they will act in the coming days. It is quite obvious we'd like them to regain their composure and lead the market higher.
Interestingly enough small caps, who have been leading the major indexes over the past few trading sessions lagged the overall market just like leading stocks. Again, we'll need to keep an eye on how the Small Cap indexes perform making sure they do not continue to lag the overall market.
The stock market can be a viscious game to be played. Often times, though, it is the individual themselves who destroy their own accounts. Being able to adapt and evolve over time will allow you to stay in the game. William O'Neil and his portfolio managers learned this leason in 1999 when many internet stocks were flying high without earnings growth. In reality, they had the best price action without the earnings. Missing the run up in many of these internet stocks would have left you high and dry but not William O'Neil's portfolio managers. Being able to identify an edge in the market is one thing exploiting it is another.
There isn't much out there that is screaming we should be going lower. At this point, given what is in front of me this market should continue its uptrend. Distribution has tailed off and is non-existent at this point and we still have leadership. Until any of this changes, we'll continue the march onward and upward.
Stay focused and nimble.
Wall Street was a ghost town as volume limped well below Friday's level all day long. As stocks opened lower selling took hold, but selling was well contained as stocks found support throughout the day. It was a bullish sign for the second straight day to clear overbought conditions that existed from last weeks run. Bulls took control at the end of the day pushing stocks near the highs of the day at the close. Once again showing the underlying strength in the market. Another great day of consolidation giving stocks time to digest the recent gains.
The level of New Highs continues to outpace New Lows, again underlining the strength of this market. Remember, we need to have the NH vs. NL ratio in our favor to get Monster Stocks. Monday saw 115 new highs while only 13 stocks made new lows. Quickly doing the math that is nearly a 10 to 1 ratio of NH vs. NL. An impressive ratio considering the market ended on the downside.
Leading stocks were somewhat mixed today lagging the overall market. Taking a look at most of the leaders they found support and closed in the upper range of the day. Typically, we want leaders to always lead and never lag the overall market. We'll be paying attention to these leaders as to how they will act in the coming days. It is quite obvious we'd like them to regain their composure and lead the market higher.
Interestingly enough small caps, who have been leading the major indexes over the past few trading sessions lagged the overall market just like leading stocks. Again, we'll need to keep an eye on how the Small Cap indexes perform making sure they do not continue to lag the overall market.
The stock market can be a viscious game to be played. Often times, though, it is the individual themselves who destroy their own accounts. Being able to adapt and evolve over time will allow you to stay in the game. William O'Neil and his portfolio managers learned this leason in 1999 when many internet stocks were flying high without earnings growth. In reality, they had the best price action without the earnings. Missing the run up in many of these internet stocks would have left you high and dry but not William O'Neil's portfolio managers. Being able to identify an edge in the market is one thing exploiting it is another.
There isn't much out there that is screaming we should be going lower. At this point, given what is in front of me this market should continue its uptrend. Distribution has tailed off and is non-existent at this point and we still have leadership. Until any of this changes, we'll continue the march onward and upward.
Stay focused and nimble.
Sunday, June 07, 2009
The SP600 And Nasdaq Lead The Indexes Higher On Friday; Leading IBD Indexes Are Finally Leading The Overall Market
I had a wonderful weekend enjoy this beautiful island of Maui. I don't plan on being here for too many more years and whenever weekends like this come along I AM going to enjoy them. To not would be damn foolish.
I work over 12 hours every day making sure that you are making the money you see below in our current longs and to do that I need my down time. This weekend, despite all the fun I had, I got all my work done for subscribers. However, those of you that come here to see what I have to say this weekend will only be greeted with this: it is a bull market you know. That is about all I can say that hasn't been said ad-naseum. Market Speculator has echoed my thoughts on this page all week and most of you are in tune with the market trends. That is great news.
However, if you continue to face problems in the stock market, then that means you are doing something wrong. If you are having problems making consistent money, do not have any set rules, and/or can not seem to hit any home runs, you are not alone. Many people have these issues but at BigWaveTrading.com the rules we advocate come directly from the rules that IBD has put out for everyone called CANSLIM. For those of us that know how to use this methodology the market has not been as difficult as the talking schmucks on TV make it sound.
The most important thing to remember is that they DO NOT have YOUR best interest in mind. The ONLY person who has YOUR best interest in mind is YOU. That means that if YOU DO NOT know how to make the big money on YOUR own in the stock market you can pretty much guarantee NOBODY is going to make it for YOU. I am a big advocate of running your own money. The only time you should not is if you have NO TIME AT ALL. If you have time, you should be running YOUR OWN money no matter how much you don't like it.
The world has changed and Americas best days are behind it thanks to the decline in morals, the entitlement society, and the get-even way of life where everything must be "fair" for everyone. This is very close to COMPLETELY KILLING the entrepreneurial spirit of America. The good news for those of us with some money is that we can get the hell out of here and move to Asia where those nations are EMBRACING those that can create wealth for their societies. Countries like China realize that the rich create jobs for the poor and help give the poor a higher quality of life. I don't know what the HELL HAS HAPPENED with the country I am from but I am darn near close to writing this country off. Unless we turn around I don't see how we are EVER going to have a NON-inflationary rally where real wealth is created instead of printed paper money.
I am bullish right now because I follow trends. However, even though I am bullish on the market for now I still have some key questions. Why are my CANSLIM stocks not setting up in quieter bases? Why do I STILL!! not have any "perfect/hot" setups in my speculative longs like I have in EVERY MEANINGFUL rally I have EVER been a part of? These are very important questions because without another round of breakouts after a consolidation pattern, I am pretty sure I am not going to get my "perfect/hot" setups. Truth is when they don't show up the rallies don't last long. I am very skeptical a real bottom has shown up.
Don't forget also that just because the 50 DMA has crossed above the 200 DMA on the Nasdaq that the all-is-clear signal has sounded. Instead, the 50 must cross an UPTRENDING 200 DMA for it to be automatically bullish. Since that is not the case now with the 200, we will need to see prices move along, pullback to the 50 dma, and then have prices rally again. This should then put the 200 DMA into an uptrend and if the market pulls back and test that line then AND ONLY THEN will we be in a TRUE bull market. Without my "perfect/hot" setups and the overall market indexes in the proper pattern with the moving averages, there is simply no reason to think that this is nothing but a bear market rally.
What also makes me think this is a bear market rally? The idiots at the government keep saying the "turn has come." Really assholes? Really? You are the same MORONS that missed the whole 2008 collapse. The last time I checked not one damn analyst expected the market to be higher. Yeah, sure, I trust you guys now! Sure!
Nah, instead, I think I'll take my chances with my charts. As you can see below they appear to be working and that is a good thing. The problem is that unless I focus on CANSLIM longs only, it is really a crap-shoot and it is difficult to guess which long is going to go up near 100% in a short amount of time. It used to be easy to tell based on the "hotness" of the chart. But nowadays I can't find any "hot/perfect' charts so a lot of stocks are making moves that simply have no pattern to them. Sometimes really nice chart patterns work, sometimes they do not. Then sometimes ugly breakouts work and then they don't.
I still honestly believe that this is the hardest market environment ever and this is coming based on past experience. If this was a real bottom, I am pretty sure I would be holding a few longs up over 100% and more than likely one or two of those kind of stocks would have perfect chart patterns. Right now, it seems like fantasy, that these stocks will ever show up again. As you can see in my 'past big winners' they showed up EVERY YEAR in multiple places over-and-over in bull market trends. Then, even in some bear markets, you could find a few. Those hot chart patterns just don't show up anymore, for now. I have a big feeling this is due to the quality of market participants involved in the year 2009 compared to the market participants that were involved in 1996.
Things have changed and change is HORRIBLE! This "change" has led to a very choppy, wild, and to be honest not that much fun of a market environment. I am used to making HUGE gains on hot charts and that used to be a lot of fun. Now I find I have to work my ass off just to barely beat the market. To do that I have to focus on CANSLIM stocks. While nothing is wrong with that, it was the CANSLIM stocks mixed with the "HOTTIES" like LMLP in 99 or HIL in 03 that really allowed me those huge gains of the past. Without that speculative splender I just don't know if we are going to see those kind of gains ever again IN THIS COUNTRY.
I am pretty sure my future lies somewhere in China. Take a look at this chart and see if that doesn't sound like a BRILLIANT idea. Remember everyone, for those of you who "poo-poo" history that no matter what you want to "feel" or "believe" in the truth is that ENTITLEMENT SOCIETIES DIE DIE DIE DIE DIE! WAKE UP AMERICA. YOU ARE ALMOST DEAD!!
PS: Don't mistake INFLATION or HYPER-INFLATION with a new bull market. Did you see Zimbabwe's stock market the past five years? You should see how amazing it did!!!! Do you think that stock market rally was good or bad for the country? Do you see how a rising stock market is bad when it is on the back of EVIL inflation that is controlled by our government? I sure hope you do. We need more people to wake the hell up to what we are trying to create in the name of "fairness." Fairness gives you Zimbabwe. Once again I ask you if the rally in Zimbabwe was "awesome" or if it was a tell to how sad and depressing this once great African nation has become. Is this what we want?
The Zimbabwe Stock Exchange (the ZSE) is the best performing stock exchange in the world, the key Zimbabwe Industrials Index up some 595% since the beginning of the year and 12,000% over twelve months. And yet, the country is crumbling (4/10/07). Ever since President Mugabe's disastrous land-reform campaign (an entire article in itself), the country's farming, tourism, and gold sectors have collapsed. Unemployment is said to be near 80%.
God! Isn't socialism wonderful. :( :( :(
I don't think so. Sometimes a rising stock market is NOT bullish and is instead telling "look out the S is about to hit the fan on the inflation front." It makes me wonder if that is the kind of rally we are in now. It appears that if it wasn't I would be making more money and more "perfect" charts would be stetting up and breaking out from pattern that I have been accustomed to that produces huge gains. Maybe this next consolidation phase the market is under will unleash it.
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.
Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.
top longs with total returns since 1st purchase making money TODAY: KONG 85% ATSG 73% SIGA 55% COOL 40% RAD 42% ARST 37% CAST 28% ADAT 26% CRAY 26% AVNR 22%
top longs with total returns since 1st purchase from the PLATINUM Forums making money TODAY: RAD 270% GRRF 85% CMRG 86% CSIQ73% CFW 74% IPCS 61% WPCS 48% TELK 48% KAD 38% JADE 30% VSR 38% CSUN 20% ENT 21%
FREE YouTube Video:
FULL SIZE PART ONE, TWO, THREE, AND FOUR ARE ALL AVAILABLE IN THE GOLD FORUMS.
I work over 12 hours every day making sure that you are making the money you see below in our current longs and to do that I need my down time. This weekend, despite all the fun I had, I got all my work done for subscribers. However, those of you that come here to see what I have to say this weekend will only be greeted with this: it is a bull market you know. That is about all I can say that hasn't been said ad-naseum. Market Speculator has echoed my thoughts on this page all week and most of you are in tune with the market trends. That is great news.
However, if you continue to face problems in the stock market, then that means you are doing something wrong. If you are having problems making consistent money, do not have any set rules, and/or can not seem to hit any home runs, you are not alone. Many people have these issues but at BigWaveTrading.com the rules we advocate come directly from the rules that IBD has put out for everyone called CANSLIM. For those of us that know how to use this methodology the market has not been as difficult as the talking schmucks on TV make it sound.
The most important thing to remember is that they DO NOT have YOUR best interest in mind. The ONLY person who has YOUR best interest in mind is YOU. That means that if YOU DO NOT know how to make the big money on YOUR own in the stock market you can pretty much guarantee NOBODY is going to make it for YOU. I am a big advocate of running your own money. The only time you should not is if you have NO TIME AT ALL. If you have time, you should be running YOUR OWN money no matter how much you don't like it.
The world has changed and Americas best days are behind it thanks to the decline in morals, the entitlement society, and the get-even way of life where everything must be "fair" for everyone. This is very close to COMPLETELY KILLING the entrepreneurial spirit of America. The good news for those of us with some money is that we can get the hell out of here and move to Asia where those nations are EMBRACING those that can create wealth for their societies. Countries like China realize that the rich create jobs for the poor and help give the poor a higher quality of life. I don't know what the HELL HAS HAPPENED with the country I am from but I am darn near close to writing this country off. Unless we turn around I don't see how we are EVER going to have a NON-inflationary rally where real wealth is created instead of printed paper money.
I am bullish right now because I follow trends. However, even though I am bullish on the market for now I still have some key questions. Why are my CANSLIM stocks not setting up in quieter bases? Why do I STILL!! not have any "perfect/hot" setups in my speculative longs like I have in EVERY MEANINGFUL rally I have EVER been a part of? These are very important questions because without another round of breakouts after a consolidation pattern, I am pretty sure I am not going to get my "perfect/hot" setups. Truth is when they don't show up the rallies don't last long. I am very skeptical a real bottom has shown up.
Don't forget also that just because the 50 DMA has crossed above the 200 DMA on the Nasdaq that the all-is-clear signal has sounded. Instead, the 50 must cross an UPTRENDING 200 DMA for it to be automatically bullish. Since that is not the case now with the 200, we will need to see prices move along, pullback to the 50 dma, and then have prices rally again. This should then put the 200 DMA into an uptrend and if the market pulls back and test that line then AND ONLY THEN will we be in a TRUE bull market. Without my "perfect/hot" setups and the overall market indexes in the proper pattern with the moving averages, there is simply no reason to think that this is nothing but a bear market rally.
What also makes me think this is a bear market rally? The idiots at the government keep saying the "turn has come." Really assholes? Really? You are the same MORONS that missed the whole 2008 collapse. The last time I checked not one damn analyst expected the market to be higher. Yeah, sure, I trust you guys now! Sure!
Nah, instead, I think I'll take my chances with my charts. As you can see below they appear to be working and that is a good thing. The problem is that unless I focus on CANSLIM longs only, it is really a crap-shoot and it is difficult to guess which long is going to go up near 100% in a short amount of time. It used to be easy to tell based on the "hotness" of the chart. But nowadays I can't find any "hot/perfect' charts so a lot of stocks are making moves that simply have no pattern to them. Sometimes really nice chart patterns work, sometimes they do not. Then sometimes ugly breakouts work and then they don't.
I still honestly believe that this is the hardest market environment ever and this is coming based on past experience. If this was a real bottom, I am pretty sure I would be holding a few longs up over 100% and more than likely one or two of those kind of stocks would have perfect chart patterns. Right now, it seems like fantasy, that these stocks will ever show up again. As you can see in my 'past big winners' they showed up EVERY YEAR in multiple places over-and-over in bull market trends. Then, even in some bear markets, you could find a few. Those hot chart patterns just don't show up anymore, for now. I have a big feeling this is due to the quality of market participants involved in the year 2009 compared to the market participants that were involved in 1996.
Things have changed and change is HORRIBLE! This "change" has led to a very choppy, wild, and to be honest not that much fun of a market environment. I am used to making HUGE gains on hot charts and that used to be a lot of fun. Now I find I have to work my ass off just to barely beat the market. To do that I have to focus on CANSLIM stocks. While nothing is wrong with that, it was the CANSLIM stocks mixed with the "HOTTIES" like LMLP in 99 or HIL in 03 that really allowed me those huge gains of the past. Without that speculative splender I just don't know if we are going to see those kind of gains ever again IN THIS COUNTRY.
I am pretty sure my future lies somewhere in China. Take a look at this chart and see if that doesn't sound like a BRILLIANT idea. Remember everyone, for those of you who "poo-poo" history that no matter what you want to "feel" or "believe" in the truth is that ENTITLEMENT SOCIETIES DIE DIE DIE DIE DIE! WAKE UP AMERICA. YOU ARE ALMOST DEAD!!
PS: Don't mistake INFLATION or HYPER-INFLATION with a new bull market. Did you see Zimbabwe's stock market the past five years? You should see how amazing it did!!!! Do you think that stock market rally was good or bad for the country? Do you see how a rising stock market is bad when it is on the back of EVIL inflation that is controlled by our government? I sure hope you do. We need more people to wake the hell up to what we are trying to create in the name of "fairness." Fairness gives you Zimbabwe. Once again I ask you if the rally in Zimbabwe was "awesome" or if it was a tell to how sad and depressing this once great African nation has become. Is this what we want?
The Zimbabwe Stock Exchange (the ZSE) is the best performing stock exchange in the world, the key Zimbabwe Industrials Index up some 595% since the beginning of the year and 12,000% over twelve months. And yet, the country is crumbling (4/10/07). Ever since President Mugabe's disastrous land-reform campaign (an entire article in itself), the country's farming, tourism, and gold sectors have collapsed. Unemployment is said to be near 80%.
God! Isn't socialism wonderful. :( :( :(
I don't think so. Sometimes a rising stock market is NOT bullish and is instead telling "look out the S is about to hit the fan on the inflation front." It makes me wonder if that is the kind of rally we are in now. It appears that if it wasn't I would be making more money and more "perfect" charts would be stetting up and breaking out from pattern that I have been accustomed to that produces huge gains. Maybe this next consolidation phase the market is under will unleash it.
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years.
Great nations rise and fall. The people go from bondage to spiritual truth, to great courage, from courage to liberty, from liberty to abundance, from abundance to selfishness, from selfishness to complacency, from complacency to apathy, from apathy to dependence, from dependence back again to bondage.
top longs with total returns since 1st purchase making money TODAY: KONG 85% ATSG 73% SIGA 55% COOL 40% RAD 42% ARST 37% CAST 28% ADAT 26% CRAY 26% AVNR 22%
top longs with total returns since 1st purchase from the PLATINUM Forums making money TODAY: RAD 270% GRRF 85% CMRG 86% CSIQ73% CFW 74% IPCS 61% WPCS 48% TELK 48% KAD 38% JADE 30% VSR 38% CSUN 20% ENT 21%
FREE YouTube Video:
FULL SIZE PART ONE, TWO, THREE, AND FOUR ARE ALL AVAILABLE IN THE GOLD FORUMS.
Friday, June 05, 2009
Pushing Aside Dismal Economic News Stocks Advance in Higher Volume
Thursday's morning release of economic news did not show signs of a recovery for the US economy. This didn't stop stocks from getting support. It wasn't long after mid-morning stocks began to show signs of life. Volume on the NASDAQ ran hot throughout the day while NYSE volume was running a bit behind. A late day move in stocks helped stocks close out on the highs of the day. The bullish move at the end of the day highlighted the bullish nature of this market.
Leading stocks kept pace with the NASDAQ, but it was Small Cap stocks that took the lead. It is important to see leading stocks ahead of the major indexes. From a historical perspective, Small Cap stocks always lead the market. At the moment, Small Caps and Leading stocks are taking over leadership.
The crowd got bullish again with the AAIIBull index topped 46% while the AAIIBear index slid to 38%. A few weeks back AAII published a note stating 45% of those who were surveyed were not invested in equities. The highest amount EVER recorded by the AAII. Are those investors not invested in the market willing to come back in? This most recent rally will certainly have those not in the market itching to get back in. In addition, will equity funds see inflows from investors to put to work in the equity market? Big questions have yet to be answered but by the price and volume action of this market it appears they are putting cash to work.
Do not get caught up in the "why," why are we moving higher? Does it matter or does that we are moving higher that matters? Too often many investors are caught up in the "why" rather than taking action. All the time spent on the "why" will leave you without the time to study and find the stocks that are moving this rally. One of my favorite expressions: "it is what it is" plays nicely here. Remember, you can only control your own actions and not action of others. Focus on what is important, control your own actions and forget the "why" to CNBC.
Tomorrow morning we have the long awaited May Jobs report from the US government. The first Friday of every month is always a delight for CNBC as they bring in expert guests to talk about a number that no one can predict. Anything near or higher than -500k jobs lost will surely spark the bulls interest and bid up stocks. Especially retail stocks as they weighed down the market today. Any sign of further weakness in jobs lost we might see stocks ticker lower. More importantly it'll be how the entire week wraps up on the close Friday. It isn't until then can we make a rational thesis from the day.
Remember, always keep those losses small and come aboard to Big Wave Trading if you aren't already a member.
Enjoy your weekends and be safe.
top longs/(shorts) w/ FULL returns since purchase making $ TODAY: KONG 85% ATSG 69% PALM 44% ISTA 40% SIGA 52% CAST 28% CFL 20% CLRT 24% AVNR 21% RBY 33% ADAT 23% CRAY 21% ANV 30% RAD 36%
top speculative longs off the lows for PLATINUM members: GRRF 82% CSIQ 72% IPCS 60% GOK 68% ETWC 42% RUS 51% TMR 34% GRO 25% OSCI 38% PXLW 35% WPCS 46% RODM 31% CFW 33% TELK 39% BAA 29%
FREE YouTube video: I ONLY MADE VIDEOS FOR SUBSCRIBERS TONIGHT. "IT IS A BULL MARKET YOU KNOW."
Leading stocks kept pace with the NASDAQ, but it was Small Cap stocks that took the lead. It is important to see leading stocks ahead of the major indexes. From a historical perspective, Small Cap stocks always lead the market. At the moment, Small Caps and Leading stocks are taking over leadership.
The crowd got bullish again with the AAIIBull index topped 46% while the AAIIBear index slid to 38%. A few weeks back AAII published a note stating 45% of those who were surveyed were not invested in equities. The highest amount EVER recorded by the AAII. Are those investors not invested in the market willing to come back in? This most recent rally will certainly have those not in the market itching to get back in. In addition, will equity funds see inflows from investors to put to work in the equity market? Big questions have yet to be answered but by the price and volume action of this market it appears they are putting cash to work.
Do not get caught up in the "why," why are we moving higher? Does it matter or does that we are moving higher that matters? Too often many investors are caught up in the "why" rather than taking action. All the time spent on the "why" will leave you without the time to study and find the stocks that are moving this rally. One of my favorite expressions: "it is what it is" plays nicely here. Remember, you can only control your own actions and not action of others. Focus on what is important, control your own actions and forget the "why" to CNBC.
Tomorrow morning we have the long awaited May Jobs report from the US government. The first Friday of every month is always a delight for CNBC as they bring in expert guests to talk about a number that no one can predict. Anything near or higher than -500k jobs lost will surely spark the bulls interest and bid up stocks. Especially retail stocks as they weighed down the market today. Any sign of further weakness in jobs lost we might see stocks ticker lower. More importantly it'll be how the entire week wraps up on the close Friday. It isn't until then can we make a rational thesis from the day.
Remember, always keep those losses small and come aboard to Big Wave Trading if you aren't already a member.
Enjoy your weekends and be safe.
top longs/(shorts) w/ FULL returns since purchase making $ TODAY: KONG 85% ATSG 69% PALM 44% ISTA 40% SIGA 52% CAST 28% CFL 20% CLRT 24% AVNR 21% RBY 33% ADAT 23% CRAY 21% ANV 30% RAD 36%
top speculative longs off the lows for PLATINUM members: GRRF 82% CSIQ 72% IPCS 60% GOK 68% ETWC 42% RUS 51% TMR 34% GRO 25% OSCI 38% PXLW 35% WPCS 46% RODM 31% CFW 33% TELK 39% BAA 29%
FREE YouTube video: I ONLY MADE VIDEOS FOR SUBSCRIBERS TONIGHT. "IT IS A BULL MARKET YOU KNOW."
Wednesday, June 03, 2009
A Late Day Surge Off the Lows Paints the Day Bullish as Stocks Pull Back in Lighter Trade
By Market Speculator
Taking a breathier, stocks pulled backas the market digests the most recent move. Stocks did touch overbought conditions and it didn't come as a surrpise the market put in a day of consolidation. During the last 30 minutes of trading stocks found a bid and moved off the lows near the opening levels. A move like this shows institutions stepped in late in the day to support their stocks. Again, it was an important sign to see the support come into the market as the day wrapped up. The market action is showcasing that the bulls are in charge and ready to continue the uptrend.
Leading stocks held up quite nicely today as many of them fell back on lighter trade. It is important to see leading stocks hold up when the overall market pulls back. This is another sign of strength when you have leading stocks pulling back but not leading the market to the downside. It will be important for this type of action to continue; support for the leaders must remain for this uptrend to have legs.
In economic news, we have the May jobs report due out Friday morning at 8:30amEST. Today the ADP report showed more than 500k jobs were lost in the month of May. CNBC once again will have breaking news on the subject, but this rally isn't being fueled by an economic recovery. This rally is simply built upon the printin of greenbacs by Big Ben Bernanke and the Federal Reserve. Simply pumping money into the system will do little to create any sort of recovery as the money is being funneled into non-functional assets. If the money was beeing spent on performing assets we'd have a diffeerent ball game.
Pointing out the New High vs. New Low raio again the market saw only 6 new lows today. Six new lows on a day where the market pulled back quite substantially and the market only saw 6 new lows. This is extremely helpful to see this as it means even when the market sells off we aren't seeing it as weakness. The moves lower are looking stronger and more constructive. Rather than blasting to to new lows we are really seeing some strength. There were 104 New Highs made today, a very positive sign for this market.
We continue to make great gains in this market and will continue to do so. If you aren't already a member of Big Wave Trading, why aren't you? While you wait, we'll continue to load up on our winners.
FREE YouTube video:
Taking a breathier, stocks pulled backas the market digests the most recent move. Stocks did touch overbought conditions and it didn't come as a surrpise the market put in a day of consolidation. During the last 30 minutes of trading stocks found a bid and moved off the lows near the opening levels. A move like this shows institutions stepped in late in the day to support their stocks. Again, it was an important sign to see the support come into the market as the day wrapped up. The market action is showcasing that the bulls are in charge and ready to continue the uptrend.
Leading stocks held up quite nicely today as many of them fell back on lighter trade. It is important to see leading stocks hold up when the overall market pulls back. This is another sign of strength when you have leading stocks pulling back but not leading the market to the downside. It will be important for this type of action to continue; support for the leaders must remain for this uptrend to have legs.
In economic news, we have the May jobs report due out Friday morning at 8:30amEST. Today the ADP report showed more than 500k jobs were lost in the month of May. CNBC once again will have breaking news on the subject, but this rally isn't being fueled by an economic recovery. This rally is simply built upon the printin of greenbacs by Big Ben Bernanke and the Federal Reserve. Simply pumping money into the system will do little to create any sort of recovery as the money is being funneled into non-functional assets. If the money was beeing spent on performing assets we'd have a diffeerent ball game.
Pointing out the New High vs. New Low raio again the market saw only 6 new lows today. Six new lows on a day where the market pulled back quite substantially and the market only saw 6 new lows. This is extremely helpful to see this as it means even when the market sells off we aren't seeing it as weakness. The moves lower are looking stronger and more constructive. Rather than blasting to to new lows we are really seeing some strength. There were 104 New Highs made today, a very positive sign for this market.
We continue to make great gains in this market and will continue to do so. If you aren't already a member of Big Wave Trading, why aren't you? While you wait, we'll continue to load up on our winners.
FREE YouTube video:
Holding Gains Stocks End Higher as Leading and Small Cap Stocks Lead the Way Higher
by Market Speculator
Once again stocks stage another bullish trading session. It was important that stocks did not reverse course and give up a sizeable amount of gains from Monday and prior Friday's sessions. Even more important is that we have leading stocks taking center stage and the reigns from junk off the bottom stocks. Intraday action was not volitile as we have seen it from last week. Much of the day we spent in higher ground and avoided any nasty sell off heading into the close. All around a positive day for the market and signs we are poised to continue to march higher.
We have plenty of members in the chat room who are taking advantage of this market. As we begin to rotate into quality growth stocks they will offer up the ability to get long in a big way. Are we there yet? Not quite, but we might be closer than many believe we are. Big Wave Trading members will certainly be taking advantage of the opportunities these quality growht stocks may provide.
Aside from positive price and volume action the number of New Highs vs. New Lows. Remember, for Monster Stocks to show up we need a positive NH vs NL ratio. Today, 162 new highs were made while only 26 new lows were hit. Removing the New Lows from the AMEX only 5 new lows were hit, a very positive sign indeed. Keeping in mind the massive bear market we witnessed it took quite awhile for New Highs to really start pounding on New lows. Not too mention during the 1938 rally it took over 3 months for sound leadership to take hold from the bottom. We may be entering into a sweet spot in this rally.
The most important aspect of this uptrend is that we have the IBD indexes leading for the second day in row. Of course, it will take much more than two days but nonetheless we need the IBD indexes to lead. We are no almost 3 months into this rally and we are beginning to see signs of leadership. Reviewing the 1938 market rally there was an excellent opportunity to make money. Strike while the iron is hot because if we follow the 1938 market it took another 3 1/2 years to find another bull market. We shall see but the market in front of us might yield us an excellent opportunity.
As always, remember to keep your losses short and never let them to have the chance to grow.
FREE YouTube video:
Once again stocks stage another bullish trading session. It was important that stocks did not reverse course and give up a sizeable amount of gains from Monday and prior Friday's sessions. Even more important is that we have leading stocks taking center stage and the reigns from junk off the bottom stocks. Intraday action was not volitile as we have seen it from last week. Much of the day we spent in higher ground and avoided any nasty sell off heading into the close. All around a positive day for the market and signs we are poised to continue to march higher.
We have plenty of members in the chat room who are taking advantage of this market. As we begin to rotate into quality growth stocks they will offer up the ability to get long in a big way. Are we there yet? Not quite, but we might be closer than many believe we are. Big Wave Trading members will certainly be taking advantage of the opportunities these quality growht stocks may provide.
Aside from positive price and volume action the number of New Highs vs. New Lows. Remember, for Monster Stocks to show up we need a positive NH vs NL ratio. Today, 162 new highs were made while only 26 new lows were hit. Removing the New Lows from the AMEX only 5 new lows were hit, a very positive sign indeed. Keeping in mind the massive bear market we witnessed it took quite awhile for New Highs to really start pounding on New lows. Not too mention during the 1938 rally it took over 3 months for sound leadership to take hold from the bottom. We may be entering into a sweet spot in this rally.
The most important aspect of this uptrend is that we have the IBD indexes leading for the second day in row. Of course, it will take much more than two days but nonetheless we need the IBD indexes to lead. We are no almost 3 months into this rally and we are beginning to see signs of leadership. Reviewing the 1938 market rally there was an excellent opportunity to make money. Strike while the iron is hot because if we follow the 1938 market it took another 3 1/2 years to find another bull market. We shall see but the market in front of us might yield us an excellent opportunity.
As always, remember to keep your losses short and never let them to have the chance to grow.
FREE YouTube video:
Monday, June 01, 2009
Following Through on Friday's Gains Stocks Stage Another Rally on Strong Volume
by Market Speculator
From the opening bell to the close stocks were being accumulated in a big way. Volume once again soared showing institutional support is behind stocks. We even saw quality growth stocks bust out and show tremendous strength. It was very important for the stock market to follow through with very nice gains after Friday's close. The action from stocks today is showing there is more room to run to the upside. Leaders have emerged to show quality is where the action will be at and the time is now to get on board with them. Leadership has taken hold and the overall price and volume action of the market is signalling this market wants to roll higher.
An important occurance happened today and that was the price and volume action following through from Friday's gains. It would have been terrible for stocks to roll over and essentially would have signaled the market wasn't going to move higher. Although we could have moved sideways in lighter trade today's session was much more favorable. Today proved institutions are willing to put their capital to work in stocks. Not only are they willing to put this capital to work they are supporting the quality growth stocks. We absolutely need institutional support for this market to go higher and we are seeing capital flow back into stocks.
There are quality growth stocks leading this market, a true sign of market strength is its leadership. We are beginning to see the type of stocks where you can build a sizeable position. Jesse Livemore, Jack Dryfus, William O'Neil and other great traders were able to plunge into the leaders and extract as much as their run as they could. There are these types of stocks out there at this moment that will allow us the opportunity to get long in size. It is getting long in size that will have a great effect on your overall portfolio performance.
Keeping in mind we have our backside to protect. We can not remember to cut our losses in cases where a stock is not acting right or its triggering a cut loss area. Generally speaking an 8% cut loss is an excellent area to look at. However, professionals are able to tighten up their cut loss to where sometimes it can be as low as 3%. It takes years and trading in the market to be able to know when a stock is not acting right and it is best to part ways.
A mistake many traders make is giving up on a stock once they have cut their loss. Some times stocks will give a buy signal and fail to continue to move higher and go on to form another base. It is important that if the fundamental growth picture hasn't changed to not give up on a stock just because it failed the first time. Many times some of these do come back and offer up great opportunities to get long. There are a few examples of these happening now. Our platinum members got a glimpse of these last night during a discussion with Joshua and I. Keeping your watchlist up to date is very important in your trading arsenal.
A very positive day in the market, now it is time to take advantage of the opportunities that lie ahead. Big Wave Trading and its members are certainly enjoying and will enjoy a move higher.
top longs w/ TOTAL returns since purchase making money TODAY: KONG 84% ATSG 76% FIRE 48% SIGA 48% ASCA 41% PALM 34% CAST 33% WAVX 31% ADAT 27% ISTA 25% ARST 29%
FREE YouTube video:
From the opening bell to the close stocks were being accumulated in a big way. Volume once again soared showing institutional support is behind stocks. We even saw quality growth stocks bust out and show tremendous strength. It was very important for the stock market to follow through with very nice gains after Friday's close. The action from stocks today is showing there is more room to run to the upside. Leaders have emerged to show quality is where the action will be at and the time is now to get on board with them. Leadership has taken hold and the overall price and volume action of the market is signalling this market wants to roll higher.
An important occurance happened today and that was the price and volume action following through from Friday's gains. It would have been terrible for stocks to roll over and essentially would have signaled the market wasn't going to move higher. Although we could have moved sideways in lighter trade today's session was much more favorable. Today proved institutions are willing to put their capital to work in stocks. Not only are they willing to put this capital to work they are supporting the quality growth stocks. We absolutely need institutional support for this market to go higher and we are seeing capital flow back into stocks.
There are quality growth stocks leading this market, a true sign of market strength is its leadership. We are beginning to see the type of stocks where you can build a sizeable position. Jesse Livemore, Jack Dryfus, William O'Neil and other great traders were able to plunge into the leaders and extract as much as their run as they could. There are these types of stocks out there at this moment that will allow us the opportunity to get long in size. It is getting long in size that will have a great effect on your overall portfolio performance.
Keeping in mind we have our backside to protect. We can not remember to cut our losses in cases where a stock is not acting right or its triggering a cut loss area. Generally speaking an 8% cut loss is an excellent area to look at. However, professionals are able to tighten up their cut loss to where sometimes it can be as low as 3%. It takes years and trading in the market to be able to know when a stock is not acting right and it is best to part ways.
A mistake many traders make is giving up on a stock once they have cut their loss. Some times stocks will give a buy signal and fail to continue to move higher and go on to form another base. It is important that if the fundamental growth picture hasn't changed to not give up on a stock just because it failed the first time. Many times some of these do come back and offer up great opportunities to get long. There are a few examples of these happening now. Our platinum members got a glimpse of these last night during a discussion with Joshua and I. Keeping your watchlist up to date is very important in your trading arsenal.
A very positive day in the market, now it is time to take advantage of the opportunities that lie ahead. Big Wave Trading and its members are certainly enjoying and will enjoy a move higher.
top longs w/ TOTAL returns since purchase making money TODAY: KONG 84% ATSG 76% FIRE 48% SIGA 48% ASCA 41% PALM 34% CAST 33% WAVX 31% ADAT 27% ISTA 25% ARST 29%
FREE YouTube video:
Thursday, May 28, 2009
Small Cap and IBD Indexes Lag the Major Indexes with Volume Higher Across the Board
by Market Speculator
Those who have been day trading the index futures know today gave many traders whiplash as stocks bounced around for much of the day's trading session. Intial jobless claims helped the market at the open, but troubling news from the housing put the brakes on and sent stocks lower. For much of the day stocks simply bounced around in lackluster trade. Stocks found it difficult to sustain a movement in either direction showing the epic battle between the Bulls and Bears. It wasn't until 2pm EST when the Bulls began to win the struggle and pushed the major indexes higher. Crude Oil prices closed above $65 a barrel helping oil related names push higher into the close. Closing in their upper ranges along with higher volume notched a day of accumulation for the market.
On the downside our IBD indexes lagged the entire market. In addition, Small and Mid-Caps were left behind leaving a few dark clouds lingering over the market. We must be mindful of the NASDAQ's 5 distribution days and 4 distribution days on the Dow. Although we haven't had any MAJOR bouts of distribution we still have them piled up here in recent weeks. The market is telling us it might not be ready to move higher and will need to continue to be cautious as sideways action may continue for the coming weeks.
Regardless of the political landscape the market does feel like it is in base building mode. Even though we have yet to see any major distribution day we could still end up rolling over a bit. It is not necessarily bad if we had lower as long as volume doesn't pick up but subsides. The market simply could be allowing quality growth stocks to build sound, "pretty" bases. Regardless, we simply need our quality growth stocks to setup properly so we can begin to plunge into them and get our much needed MONSTER STOCKS.
First Quarter GDP number is set to be released, preliminary GDP tomorrow morning at 830am EST. There will be a laser focus on this release as it will shed light on whether or not things are as bad as they appear. I am sure CNBC will have a panel discussion on the effects the Treasury and Federal Reserve have taken to rescue this economy and market. They have yet to begin dialogue about the ill effects inflating your money supply a few times over. As I digress, look for the futures to spin around as the numbers are released as traders look to position themselves for the day.
We are certainly finding some decent looking charts here at Big Wave Trading and we are not missing a beat. It is quite nice to be able to normalized the days activity and not trade emotionally. Be nimble and take nothing for granted in this market.
FREE YouTube video:
Those who have been day trading the index futures know today gave many traders whiplash as stocks bounced around for much of the day's trading session. Intial jobless claims helped the market at the open, but troubling news from the housing put the brakes on and sent stocks lower. For much of the day stocks simply bounced around in lackluster trade. Stocks found it difficult to sustain a movement in either direction showing the epic battle between the Bulls and Bears. It wasn't until 2pm EST when the Bulls began to win the struggle and pushed the major indexes higher. Crude Oil prices closed above $65 a barrel helping oil related names push higher into the close. Closing in their upper ranges along with higher volume notched a day of accumulation for the market.
On the downside our IBD indexes lagged the entire market. In addition, Small and Mid-Caps were left behind leaving a few dark clouds lingering over the market. We must be mindful of the NASDAQ's 5 distribution days and 4 distribution days on the Dow. Although we haven't had any MAJOR bouts of distribution we still have them piled up here in recent weeks. The market is telling us it might not be ready to move higher and will need to continue to be cautious as sideways action may continue for the coming weeks.
Regardless of the political landscape the market does feel like it is in base building mode. Even though we have yet to see any major distribution day we could still end up rolling over a bit. It is not necessarily bad if we had lower as long as volume doesn't pick up but subsides. The market simply could be allowing quality growth stocks to build sound, "pretty" bases. Regardless, we simply need our quality growth stocks to setup properly so we can begin to plunge into them and get our much needed MONSTER STOCKS.
First Quarter GDP number is set to be released, preliminary GDP tomorrow morning at 830am EST. There will be a laser focus on this release as it will shed light on whether or not things are as bad as they appear. I am sure CNBC will have a panel discussion on the effects the Treasury and Federal Reserve have taken to rescue this economy and market. They have yet to begin dialogue about the ill effects inflating your money supply a few times over. As I digress, look for the futures to spin around as the numbers are released as traders look to position themselves for the day.
We are certainly finding some decent looking charts here at Big Wave Trading and we are not missing a beat. It is quite nice to be able to normalized the days activity and not trade emotionally. Be nimble and take nothing for granted in this market.
FREE YouTube video:
Tuesday, May 26, 2009
Finally We Have The IBD Indexes Leading The Way As Stocks Rally On Heavier Trade
By Market Speculator
Stocks defied negative news from North Korea as the rogue country tested its nuclear and missle strike capabilities. Consumer confidence jumped big fueling institutional buying pushing stocks even higher and the buying continued right up into the close. Volume was up across the board compared to Friday's trade, but it was below the 50dma. Not a terrible sign, but its more showing institutions are still being a bit shy. Rapping up the day, seeing the indexes close out near the highs on volume was a positive step in the right direction.
Finally, we see the IBD indexes leading this market. The trend will need to continue, but today was a step in the right direction. It is nice to see quality growth stocks lead for once and not the junk off the bottom. Remember, in past uptrends which followed severe bear markets leaders took months to form. We may be seeing this begin to take shape as stocks with quality growth characteristics are beginning to take shape. As these stocks begin to show up and present opportunities to get long it'll allow us to get bigger in a position rather than taking small positions in speculative stocks. This is exactly why we stress keeping the powder dry for opportunties to get long quality stocks.
Other notable positive is news is the number of New Highs hit relative to New Lows. The NH vs NL ratio ran better than a 7 to 1 ratio showing the market continues to have strength from within. In John Boik's research he found that when the NH vs NL was favorable the probability of Monster Stocks appearing soars. Although I do not trade off of the Nh vs NL ratio it is a simply another secondary indicator that hints at the power of this uptrend.
Keep perspective is quite difficult for most as we have rallied off of a massive downturn. This uptrend will not mimic prior uptrends which started with downturns of only 20-30%. We have to look back to prior uptrends off massive decline, much like the 1938 rally. The 1938 rally was far from pretty as it witnessed turbulent consolidation periods and leadership took more than 3 months to emerge. We are now bumping up against the 3 month mark for this most recent uptrend. It should be interesting if we see a pick up in the IBD indexes to push this market higher.
A few things to be concerned with is the number of Distribution Days remaining on the NASDAQ and Dow Jones Industrial averages. At the moment, both indexes have 4 distribution days in recent weeks. History has shown when a market flashes 5-6 distribution days the uptrend is broken and we need to raise cash. So far we've avoided ending this rally prematurely. However, it is something we should be aware of and if our IBD leaders begin to crack and fall apart we'll need to raise our cash levels and look for shorting opportunities. With that said, the positives are outweighing the negatives, but we need to keep our heads up and avoid from being blindsided.
I am very happy to quality leadership emerge, it sheds some light on this uptrend which has been lead by Junk-off-the-bottom stocks. It is what it is, nothing wrong with an uptrend lead by the JOTB stocks. However, for a sustainable rally and a chance to get large gains in stock you need quality growth stocks as your market leaders. We'll be continue our quest in finding the market leaders and as always we continue to right on top of this market.
FREE YouTube Video:
FULL SIZE PART ONE AND PART TWO AVAILABLE ON THE GOLD FORUMS
Stocks defied negative news from North Korea as the rogue country tested its nuclear and missle strike capabilities. Consumer confidence jumped big fueling institutional buying pushing stocks even higher and the buying continued right up into the close. Volume was up across the board compared to Friday's trade, but it was below the 50dma. Not a terrible sign, but its more showing institutions are still being a bit shy. Rapping up the day, seeing the indexes close out near the highs on volume was a positive step in the right direction.
Finally, we see the IBD indexes leading this market. The trend will need to continue, but today was a step in the right direction. It is nice to see quality growth stocks lead for once and not the junk off the bottom. Remember, in past uptrends which followed severe bear markets leaders took months to form. We may be seeing this begin to take shape as stocks with quality growth characteristics are beginning to take shape. As these stocks begin to show up and present opportunities to get long it'll allow us to get bigger in a position rather than taking small positions in speculative stocks. This is exactly why we stress keeping the powder dry for opportunties to get long quality stocks.
Other notable positive is news is the number of New Highs hit relative to New Lows. The NH vs NL ratio ran better than a 7 to 1 ratio showing the market continues to have strength from within. In John Boik's research he found that when the NH vs NL was favorable the probability of Monster Stocks appearing soars. Although I do not trade off of the Nh vs NL ratio it is a simply another secondary indicator that hints at the power of this uptrend.
Keep perspective is quite difficult for most as we have rallied off of a massive downturn. This uptrend will not mimic prior uptrends which started with downturns of only 20-30%. We have to look back to prior uptrends off massive decline, much like the 1938 rally. The 1938 rally was far from pretty as it witnessed turbulent consolidation periods and leadership took more than 3 months to emerge. We are now bumping up against the 3 month mark for this most recent uptrend. It should be interesting if we see a pick up in the IBD indexes to push this market higher.
A few things to be concerned with is the number of Distribution Days remaining on the NASDAQ and Dow Jones Industrial averages. At the moment, both indexes have 4 distribution days in recent weeks. History has shown when a market flashes 5-6 distribution days the uptrend is broken and we need to raise cash. So far we've avoided ending this rally prematurely. However, it is something we should be aware of and if our IBD leaders begin to crack and fall apart we'll need to raise our cash levels and look for shorting opportunities. With that said, the positives are outweighing the negatives, but we need to keep our heads up and avoid from being blindsided.
I am very happy to quality leadership emerge, it sheds some light on this uptrend which has been lead by Junk-off-the-bottom stocks. It is what it is, nothing wrong with an uptrend lead by the JOTB stocks. However, for a sustainable rally and a chance to get large gains in stock you need quality growth stocks as your market leaders. We'll be continue our quest in finding the market leaders and as always we continue to right on top of this market.
FREE YouTube Video:
FULL SIZE PART ONE AND PART TWO AVAILABLE ON THE GOLD FORUMS
Monday, May 25, 2009
Stock Indexes End Slightly Lower On Lowest Volume Since The Beginning Of The Year
HAPPY MEMORIAL DAY!
I have scanned over 5,000 stocks this weekend and can honestly say that there are some very nice charts out there. SADLY, those charts are all in the sub-$10 category with most sub-$5. The good news is that there are still a lot of high quality CANSLIM stocks like GMCR, PEGA, NTES, TNDM, HMSY, CMG, NFLX, AAN, JOSB, SNDA, AMT, CRM, EQIX, and ASIA that are moving higher, even if they are not setting up and breaking out of the chart patterns I like. However, at the same time, it is a very mixed market, as stocks like AIPC, ALGT, IDCC, QSII, and DMND have setup and broken out of bases, started to move higher, and then have all disappointed by falling below their pivot points.
This mixed action is common and not surprising after the huge selloff we just went through. A lot of people that are not focused on the cheap stocks and most beaten up stocks basically missed the sweet part of the move higher, but if this market is going to turn into a bull, and not die as just another bear market rally, they will be rewarded as those stocks will be the stocks that produce the largest gains in a sustained bull.
Is this going to be a sustainable uptrend? Right now the verdict is mixed as cheap, small, and beaten stocks have been the only stocks to really profit after such a downtrend like we had in late 2007 to March 2009. It is always good when these stocks rally but it is twice as nice if they rally with CANSLIM quality longs. This was the case in late 2002 and especially in March 2003 as both CANSLIM quality and beaten up cheap stocks took off toward the heavens. It still appears to be a market where you must take gains fast at the 25%, 33%, 50%, 66%, 75%, 100%, and 150% moves in the stock. The time to hold for the 300%-1,000%+ returns still is not here. When it is here, you can be sure I will let you know.
PLEASE, if you see a soldier anywhere at a store, airport, mall, etc..., make sure you say hello and give them a big thank you even if it feels odd. It means a lot and is just a small way for us to say 'thank you.' God bless you troops.
I hope everyone has a great Memorial Day and I hope you had a wonderful weekend. I will be back later on this evening to expand on my weekend market thoughts. Platinum subscribers remember to check the 'new Platinum longs' area for new longs off the lows (five new longs). Silver, Gold, and Platinum members if you checked out the 'New Longs' earlier in the weekend, you might want to check back as another CANSLIM quality (yet speculative) long has been added. Once again, have a wonderful Memorial Day. I will be back with more market commentary whenever I finish my first surf session of the day (it feels good to be surfing again). Aloha!
Monday thoughts:
Looking ahead to the short week, I believe that we must remain fluid and unbiased as the market is in a mixed trend on multiple time frames with some trends up and some down. The only stocks that continue to produce good sized gains are the thin, low volume, and cheap stocks. The top quality longs still are not setting up in proper bases to have a breakout be worth a long-term hold. The way stocks have been acting it still seems that it is smart to take profits on the way up, instead of looking at those early big profits as "just the start."
Whenever stocks start to breakout, continue to run, setup, and then breakout and run higher, then I will look to go back to my historically proven methodology of producing the largest gains which is a form of growth-momentum-CANSLIM position investing. Like I posted earlier some stocks like GMCR are acting just like they should but at the same time stocks like QSII are still out there. That kind of action is what keeps me from going fully invested.
Some people were even questioning me for not being fully invested. I had to remind these investors/traders that my main methodology is not daytrading the 3x ETFs and futures or swing trading. My main methodology is the #1 strategy since 1998 according to AAII with a return over 1,500% AFTER the bear market of 2008. The CANSLIM methodology along with my own momentum/growth position trading with stocks with beautiful chart patterns, allows me to produce returns that have allowed me to make investing in the markets my full-time profession since I was a late-teenager. Not too many young guys can make a consistent decent living on an island where the cost of living is a tragedy of expensive proportions. Thanks to IBD and the CANSLIM methodology, along with a lot of market experience now, I can do that. However, is it IBD and CANSLIM that has allowed me this great life? No. It is the men and women that serve in the armed forces.
Once again, soldiers, I want to say thank you. I can not express my gratitude enough to you men and women that serve in uniform and the only thing I know that I can do to express how thankful I am is to post it multiple times on my blog. You guys and girls are the reason why people like me can do what we love to do for a living. THANK YOU!
We will see where we end up at the end of this week. I just want to remind all those that are now fully bearish again that, so far, we are pulling back on lower volume after rallying on heavier volume. For those of you that are fully bullish, I want to remind you that in bull markets that I have been a part of in 1997, 1998, 1999, and 2002-2007, you can not find ONE TIME where the low-quality longs have dominated an uptrend the way low-quality longs have this one. Another thing you do not see often in rallies is leading stocks lag. In fact, I almost can not remember the last time I saw leading stocks lag like this, unless I look at the bear market of 2000-2002. The rally attempt of May to July in 2000 had leading stocks lag. That rally failed. From April to June in 2001 leading stocks lagged. That rally attempt failed. The September 2001 to January 2002 had leading stocks lag. That rally failed. The summer rally of 2002 had leading stocks lag. That rally attempt too failed.
In late 2002, leading stocks in the internet-ISP group which was the #1 group at the time start breaking out. Telecom stocks then follow unleashing a powerful rally with leading stocks producing huge gains. Once again leading stocks lead. In bull markets, leading stocks lead. In bear markets, they lag. Leading stocks have been lagging. How do you think this is going to end?
Stay alert and ready for anything, remember to take gains when you have them, and to get rid of losses before they accumulate into anything serious, and stay positive. Trending markets on the upside will return. Watch the IBD 100 and IBD 85-85 for the signal to get back to the long side in a large way. When it is time to rally big, I will let you know. Well, I'll let the subscribers know, at least. Aloha!
FREE YouTube Video:
FULL SIZE PART 1-3 AVAILABLE IN THE FORUMS
I have scanned over 5,000 stocks this weekend and can honestly say that there are some very nice charts out there. SADLY, those charts are all in the sub-$10 category with most sub-$5. The good news is that there are still a lot of high quality CANSLIM stocks like GMCR, PEGA, NTES, TNDM, HMSY, CMG, NFLX, AAN, JOSB, SNDA, AMT, CRM, EQIX, and ASIA that are moving higher, even if they are not setting up and breaking out of the chart patterns I like. However, at the same time, it is a very mixed market, as stocks like AIPC, ALGT, IDCC, QSII, and DMND have setup and broken out of bases, started to move higher, and then have all disappointed by falling below their pivot points.
This mixed action is common and not surprising after the huge selloff we just went through. A lot of people that are not focused on the cheap stocks and most beaten up stocks basically missed the sweet part of the move higher, but if this market is going to turn into a bull, and not die as just another bear market rally, they will be rewarded as those stocks will be the stocks that produce the largest gains in a sustained bull.
Is this going to be a sustainable uptrend? Right now the verdict is mixed as cheap, small, and beaten stocks have been the only stocks to really profit after such a downtrend like we had in late 2007 to March 2009. It is always good when these stocks rally but it is twice as nice if they rally with CANSLIM quality longs. This was the case in late 2002 and especially in March 2003 as both CANSLIM quality and beaten up cheap stocks took off toward the heavens. It still appears to be a market where you must take gains fast at the 25%, 33%, 50%, 66%, 75%, 100%, and 150% moves in the stock. The time to hold for the 300%-1,000%+ returns still is not here. When it is here, you can be sure I will let you know.
PLEASE, if you see a soldier anywhere at a store, airport, mall, etc..., make sure you say hello and give them a big thank you even if it feels odd. It means a lot and is just a small way for us to say 'thank you.' God bless you troops.
I hope everyone has a great Memorial Day and I hope you had a wonderful weekend. I will be back later on this evening to expand on my weekend market thoughts. Platinum subscribers remember to check the 'new Platinum longs' area for new longs off the lows (five new longs). Silver, Gold, and Platinum members if you checked out the 'New Longs' earlier in the weekend, you might want to check back as another CANSLIM quality (yet speculative) long has been added. Once again, have a wonderful Memorial Day. I will be back with more market commentary whenever I finish my first surf session of the day (it feels good to be surfing again). Aloha!
Monday thoughts:
Looking ahead to the short week, I believe that we must remain fluid and unbiased as the market is in a mixed trend on multiple time frames with some trends up and some down. The only stocks that continue to produce good sized gains are the thin, low volume, and cheap stocks. The top quality longs still are not setting up in proper bases to have a breakout be worth a long-term hold. The way stocks have been acting it still seems that it is smart to take profits on the way up, instead of looking at those early big profits as "just the start."
Whenever stocks start to breakout, continue to run, setup, and then breakout and run higher, then I will look to go back to my historically proven methodology of producing the largest gains which is a form of growth-momentum-CANSLIM position investing. Like I posted earlier some stocks like GMCR are acting just like they should but at the same time stocks like QSII are still out there. That kind of action is what keeps me from going fully invested.
Some people were even questioning me for not being fully invested. I had to remind these investors/traders that my main methodology is not daytrading the 3x ETFs and futures or swing trading. My main methodology is the #1 strategy since 1998 according to AAII with a return over 1,500% AFTER the bear market of 2008. The CANSLIM methodology along with my own momentum/growth position trading with stocks with beautiful chart patterns, allows me to produce returns that have allowed me to make investing in the markets my full-time profession since I was a late-teenager. Not too many young guys can make a consistent decent living on an island where the cost of living is a tragedy of expensive proportions. Thanks to IBD and the CANSLIM methodology, along with a lot of market experience now, I can do that. However, is it IBD and CANSLIM that has allowed me this great life? No. It is the men and women that serve in the armed forces.
Once again, soldiers, I want to say thank you. I can not express my gratitude enough to you men and women that serve in uniform and the only thing I know that I can do to express how thankful I am is to post it multiple times on my blog. You guys and girls are the reason why people like me can do what we love to do for a living. THANK YOU!
We will see where we end up at the end of this week. I just want to remind all those that are now fully bearish again that, so far, we are pulling back on lower volume after rallying on heavier volume. For those of you that are fully bullish, I want to remind you that in bull markets that I have been a part of in 1997, 1998, 1999, and 2002-2007, you can not find ONE TIME where the low-quality longs have dominated an uptrend the way low-quality longs have this one. Another thing you do not see often in rallies is leading stocks lag. In fact, I almost can not remember the last time I saw leading stocks lag like this, unless I look at the bear market of 2000-2002. The rally attempt of May to July in 2000 had leading stocks lag. That rally failed. From April to June in 2001 leading stocks lagged. That rally attempt failed. The September 2001 to January 2002 had leading stocks lag. That rally failed. The summer rally of 2002 had leading stocks lag. That rally attempt too failed.
In late 2002, leading stocks in the internet-ISP group which was the #1 group at the time start breaking out. Telecom stocks then follow unleashing a powerful rally with leading stocks producing huge gains. Once again leading stocks lead. In bull markets, leading stocks lead. In bear markets, they lag. Leading stocks have been lagging. How do you think this is going to end?
Stay alert and ready for anything, remember to take gains when you have them, and to get rid of losses before they accumulate into anything serious, and stay positive. Trending markets on the upside will return. Watch the IBD 100 and IBD 85-85 for the signal to get back to the long side in a large way. When it is time to rally big, I will let you know. Well, I'll let the subscribers know, at least. Aloha!
FREE YouTube Video:
FULL SIZE PART 1-3 AVAILABLE IN THE FORUMS
Friday, May 22, 2009
Indexes End In The Red With A Push Off The Lows While Volume Eases Across the Board
From the onset the picture looked bleak for stocks as selling appeared to be slightly higher on the NASDAQ but lower on the NYSE. Selling pressure picked up just after 10am EST as the hot money was moving out of stocks. Interestingly enough money was pouring out of treasuries along with stocks suggesting traders weren't chasing after treasuries. Money was certainly moving into gold and gold related stocks. During the final our of trading we did find support off the lows showing signs the market still has some life left in it. Given the action earlier in the trading session the push off the lows simply confirmed my neutrality on this market.
Gold, Treasuries, and the Dollar are all troubling signs. With Gold moving above 950, Treasurie Yields racing higher and the dollar moving lower is spelling trouble. All 3 items are related and are quite troublesome to watch. The higher the yields on treasury bonds the more costly ALL Government programs become. Utlimately, this burden lies on the US Taxpayer who is already feeling the pinch from the current economic climate. The safe haven is gold and silver as these metals are seen to have intrinsic value. The move in gold will continue as the United States and other Global Central Banks print more fiat currency. Rather than let the market course correct itself we are delaying the natural process a free market provides.
An encouraging sign from the market was the IBD indexes didn't sell off on higher trade and outperformed the major indexes showing signs of strength. Not all is great, the IBD indexes did fall more than 1% and steep price declines are never welcomed. However, like the major indexes the IBD indexes found support intraday and finished well off the lows. A positive development for the market.
At the moment we appear to be in limbo. The AAII investor sentiment survey showed bears up to 45% while bulls slipped to 33%. This suggests that the crowd swung hard to the bears side in a matter of a week. I may remind everyone the AAII Investors Sentiment survey tends to be volatile in nature. It should only be used as a secondary indicator and should have investment decisions directly derived from this data. Nonetheless, with fear growing and the indexes failing to follow through to the downside there may be light at the end of this tunnel.
Other positive note for the market was that New Highs outpaced New Lows by a margin of 4 to 1. Have we got the leadership to take us forward is the biggest question that has not been answered. We are quite long in the tooth from the follow-through day and we are experiencing a stall. It is up to leading stocks to carry us forward and we are in need of them.
Keep your eye on the ball!
FREE YouTube video to help you make money in the stock market (I can't believe I have to explain that to people):
Gold, Treasuries, and the Dollar are all troubling signs. With Gold moving above 950, Treasurie Yields racing higher and the dollar moving lower is spelling trouble. All 3 items are related and are quite troublesome to watch. The higher the yields on treasury bonds the more costly ALL Government programs become. Utlimately, this burden lies on the US Taxpayer who is already feeling the pinch from the current economic climate. The safe haven is gold and silver as these metals are seen to have intrinsic value. The move in gold will continue as the United States and other Global Central Banks print more fiat currency. Rather than let the market course correct itself we are delaying the natural process a free market provides.
An encouraging sign from the market was the IBD indexes didn't sell off on higher trade and outperformed the major indexes showing signs of strength. Not all is great, the IBD indexes did fall more than 1% and steep price declines are never welcomed. However, like the major indexes the IBD indexes found support intraday and finished well off the lows. A positive development for the market.
At the moment we appear to be in limbo. The AAII investor sentiment survey showed bears up to 45% while bulls slipped to 33%. This suggests that the crowd swung hard to the bears side in a matter of a week. I may remind everyone the AAII Investors Sentiment survey tends to be volatile in nature. It should only be used as a secondary indicator and should have investment decisions directly derived from this data. Nonetheless, with fear growing and the indexes failing to follow through to the downside there may be light at the end of this tunnel.
Other positive note for the market was that New Highs outpaced New Lows by a margin of 4 to 1. Have we got the leadership to take us forward is the biggest question that has not been answered. We are quite long in the tooth from the follow-through day and we are experiencing a stall. It is up to leading stocks to carry us forward and we are in need of them.
Keep your eye on the ball!
FREE YouTube video to help you make money in the stock market (I can't believe I have to explain that to people):
Tuesday, May 19, 2009
Ending in Mixed Fashion Stocks Fail to Close Out With Gains Seen Earlier in the Session; IBD Indexes Take the Lead
Following through on yesterday's gains stocks took the lead and moved higher as volume tracked higher. A very bullish sign to see stocks moving higher with higher volume especially right after a day where prices advanced on lower trade. All was well and good with stocks until the final hour of trading where we began to see selling pressure. The selling pressure was enough to send the S&P 500 and Dow Jones Industrial Average into negative territory but the NASDAQ was able to slip in a small gain. Preliminary volume indicates NASDAQ saw higher trade while the NYSE declined avoiding a distribution day. A positive sign is we saw IBD indexes lead the market and we'll await to see if volume on the IBD indexes came in higher. In summary, not a terrible day following yesterday's move, but signs of bullishness are appearing in the leaders.
We've been waiting to see if the IBD indexes would begin to show some light. Yesterday, the IBD 100 was able to see gains on higher volume while other exchanges saw lighter trade. Although it lagged, the volume compenent was important to see. It meant that leading stocks were being accumulated rather than see shorts simply covering. The probability of stock gains improve dramatically when we begin to see growth stocks lead the way. IBD is on the forefront of these stocks and a proven method to capturing these leaders. BigWave Trading is certainly on top of these and ready to pounce given the opportunity to get long leaders.
An interetsing note is seeing the put/call ratio rise today given the stock gains. Although the S&P500 and Dow Jones finished negative they were showing gains earlier in the day. While these indexes were green the intraday put/call ratio (overall) was sitting above .80 4% higher than the previous day. It shows that the move today was not being bought into by option players. The higher put/call ratio suggests the move is showing option traders not terribly confident in the move.
A favorite secondary indicator is the number of stocks making a new high versus making a new low. John Boik pointed out in his book "MONSTER STOCKS" the need to for this ratio to be positive for the market to show Monster Stocks. Today, the market saw (preliminary) 95 New Highs versus 15 New Lows. Again, this NH vs. NL ratio has been positive for quite some time showing us that there is strength to this market. Having a positive NH vs. NL ratio is certainly a welcoming sign that we may begin to see more MONSTER STOCKS on the way.
top longs/(shorts) w/ total returns since purchase making money today: KONG 42% ASCA 34% ISTA 29% (CYT 57% CHTT 17%)
FREE YouTube Video:
FULL SIZE VERSION PART ONE, TWO AND THREE AVAILABLE IN THE GOLD FORUMS
We've been waiting to see if the IBD indexes would begin to show some light. Yesterday, the IBD 100 was able to see gains on higher volume while other exchanges saw lighter trade. Although it lagged, the volume compenent was important to see. It meant that leading stocks were being accumulated rather than see shorts simply covering. The probability of stock gains improve dramatically when we begin to see growth stocks lead the way. IBD is on the forefront of these stocks and a proven method to capturing these leaders. BigWave Trading is certainly on top of these and ready to pounce given the opportunity to get long leaders.
An interetsing note is seeing the put/call ratio rise today given the stock gains. Although the S&P500 and Dow Jones finished negative they were showing gains earlier in the day. While these indexes were green the intraday put/call ratio (overall) was sitting above .80 4% higher than the previous day. It shows that the move today was not being bought into by option players. The higher put/call ratio suggests the move is showing option traders not terribly confident in the move.
A favorite secondary indicator is the number of stocks making a new high versus making a new low. John Boik pointed out in his book "MONSTER STOCKS" the need to for this ratio to be positive for the market to show Monster Stocks. Today, the market saw (preliminary) 95 New Highs versus 15 New Lows. Again, this NH vs. NL ratio has been positive for quite some time showing us that there is strength to this market. Having a positive NH vs. NL ratio is certainly a welcoming sign that we may begin to see more MONSTER STOCKS on the way.
top longs/(shorts) w/ total returns since purchase making money today: KONG 42% ASCA 34% ISTA 29% (CYT 57% CHTT 17%)
FREE YouTube Video:
FULL SIZE VERSION PART ONE, TWO AND THREE AVAILABLE IN THE GOLD FORUMS
Monday, May 18, 2009
Shorts Ran For Cover as Stocks Run Higher on Lower Volume; Some Leaders Show Support With Volume
Lacking any economic catalysts to begin the week stocks started the day off gapping higher. Volume tracked lower for much of the day indicating institutional players were sitting on the sidelines staying away from the action. It appeared the action was driven by short-sellers covering their positions. It was certainly disappointing to see volume come in lower on such a large percentage move on the indexes. At this point, a day with gains is nice but at some point we need accumulation to support this uptrend.
Price and volume action is the most, the most important action to consider on the exchanges. The next is seeing how leaders are acting. Leaders are found in the IBD 100 and IBD 85-85. Normally, leaders emerge rather quickly from market corrections. However, this correction was quite severe and from past severe market corrections leadership may take months to form. It should come to no surprise that this market is lacking IBD leadership. At some point, for this uptrend to continue the IBD 100 and IBD 85/85 indexes must be leading this market.
There were some positives today as we did see leaders have an excellent day. A few of them found support with volume. A clue that there is institutional support for these leaders. We are on top of them here at Big Wave Trading and are ready to take advantage of these leaders if they begin to breakout. These leaders will run and show is Monster Stock gains. Not only will they be Monster Stocks but they will be the tell when the market begins to stall out. Junk-off-the-bottom have led this market up to this point but for this uptrend to continue any further we'll need to see the IBD indexes lead.
top longs/(shorts) w/ TOTAL returns since purchase making me money TODAY: AVNR 48% INOD 41% ASCA 33% FIRE 28% PALM 28% ISTA 20% (CHTT 16% DV 15%)
FREE YouTube video:
Price and volume action is the most, the most important action to consider on the exchanges. The next is seeing how leaders are acting. Leaders are found in the IBD 100 and IBD 85-85. Normally, leaders emerge rather quickly from market corrections. However, this correction was quite severe and from past severe market corrections leadership may take months to form. It should come to no surprise that this market is lacking IBD leadership. At some point, for this uptrend to continue the IBD 100 and IBD 85/85 indexes must be leading this market.
There were some positives today as we did see leaders have an excellent day. A few of them found support with volume. A clue that there is institutional support for these leaders. We are on top of them here at Big Wave Trading and are ready to take advantage of these leaders if they begin to breakout. These leaders will run and show is Monster Stock gains. Not only will they be Monster Stocks but they will be the tell when the market begins to stall out. Junk-off-the-bottom have led this market up to this point but for this uptrend to continue any further we'll need to see the IBD indexes lead.
top longs/(shorts) w/ TOTAL returns since purchase making me money TODAY: AVNR 48% INOD 41% ASCA 33% FIRE 28% PALM 28% ISTA 20% (CHTT 16% DV 15%)
FREE YouTube video:
Sunday, May 17, 2009
After All That Bottom Fishing The Past Two Months It Looks Like CANSLIM Stocks Are Ready To Lead Next; Stock Indexes Pullback On The Week On Lower Vol
Stocks pulled back this week and those that read this commentary daily know that we were expecting a pullback and we are getting it. If you remember I wanted the pullback to come on lower volume and that is exactly what we are getting on the IBD indexes, the Nasdaq, NYSE, and SP 500. If stocks continue to pullback this week, I will be more than OK with it as I think stocks are starting to look really good out there in the charting landscape. If this continues I am sure that we will be moving from trading everything breaking out in uptrends and downtrends and will be able to move on to going long the historical patterns that come about right before stocks go on major advances.
If you are not familiar with these chart patterns, you can find them on the 'past big winners' area at my .com site or you can visit the IBD Investors Education site and go over the historical chart patterns that lead to big gains there. If you are a subscriber you can also go all throughout the 'General Market' post to find a ton of beautiful chart examples of other past winners that I was not part of but have studied. The bottom line is that if you are a subscriber, you have no excuse to not know a chart pattern. We have example after winning example on the site and IBD's past studies to look at to know what we need to see before we go heavily long.
The good news is that thanks to the Nasdaq losing RS to the SP500 about two weeks ago and that turning into a pullback it has allowed charts to build better basing patterns. As the rally was moving along I was getting confused as to why the IBD indexes continued to lag while stocks coming off the lows were doing so well. I believe that the market was beaten down unlike anything ever seen and besides an initial oversold burst of breakout momentum most stocks simply can not sustain big uptrends with the weight of past resistance ahead.
The 200 day moving average has proven to be very tough for the indexes to break through. However, the more the indexes test the line the higher the chances are that we will break to the upside. The charts that I see in my scans are hinting that we will be able to make some good money on the long side very soon. While it is VERY NICE to get a 200% to 300% pop from beaten down stocks, the plain truth is that the best, longest, safest, and biggest gains come AFTER a stock has setup over the 50 DMA with the 50 DMA over the 200 DMA. The most important part of all of this is to have a market in an uptrend on strong volume. We are getting that but until the past week we were not getting any pullbacks. So it is nice to see pullbacks as you need these to help launch sustainable long term rallies.
Indexes can not just keep rallying without pulling back and be healthy. When that happens you get 2008. From 2003-2007 the DJIA didn't even pullback 10% ONCE! As you can see 2008 proved that "that" wasn't healthy at all. The gains were great but those that are clueless to cutting their losses or in their ability to spot a top lost a lot of money. Thankfully those of us at BWT went short in November and pretty much stayed cash/short until March. By April we had some longs but it was apparant the stocks off the lows with the "hot" chart patterns were working better than history's past big winners. However, this was because of the depth of the 2008 destruction.
If this rally continues to pullback on lower volume, can hold the March lows, and then make higher highs, I think we are going to see a LOT of CANSLIM quality longs and beautiful max-green BOP filled speculative stocks setup and breakout and work. If this rally rolls over I am ready to go short the new leaders and get short the past leaders that are still LOVED like AAPL and RIMM. The fact these are so loved prove to me that I want to continue to look to short these stocks. However, setups like the new short we have for Monday is the main bandit I will be looking for.
Still focusing on the short side should not be in the interest of momentum traders right now. If the volume would have been higher the past week than the previous few weeks with the 3% to 5% losses on the indexes it would have been very bearish and I am sure we would have more active short scans. As it is, even on a down 1% day there weren't even 10 shorts in each of my scans. Heck there was barely 10 stocks COMBINED in my scans. Still there was a new short but for it to be a short now, for me, it has to show negative divergences in its chart. Obviously this one does.
Don't get me wrong just because I am going short doesn't mean I am focusing on them. No; with the volume coming in lower on the indexes and the charts in my long scans expanding on a down day with more-and-more stocks ending up on my 'possible future longs' list, it would be a crime for this market to fail right now. Especially with so many green BOP filled charts that have very strong price and volume action. It has been a VERY LONG time since i have seen SO MANY green to max-green BOP filled charts. The best news is that these bases aren't the 5th stage or 6th stage bases you would find in 2007 and early 2008 before it all broke loose. No, these bases, our the fresh bases that come in the start of new bulls from downtrends.
I am not certain that this is a bottom at all. In fact, I still lean on the side of it being a bear market rally that will eventually lead to a wonderful shorting opportunity for me. The best thing about the CANSLIM methodology, however, is that my opinion doesn't mean crap. For all I know, we could have "the bottom" and we are about to see a lot of stocks setup in the max-green BOP, huge accumulation filled, and tight price pattern charts that we saw in 1999 and 2003. Every regular bull market looks like 2003 so that should give a lot of you comfort in knowing that if we are only weeks to months away from a real bull market we are going to be making a lot of money in leading stocks soon.
If, however, the economy is as bad as it looks and that the extremely foolish socialist policies of this incompetent administartion is going to continue, I can't see why stocks would rise for the long term. Still if stocks setup in base-on-base, double bottom, cup, cup w/ handle, ascending base, or high-tight-flag patterns with max green BOP and huge accumulation with "fresh" breakouts you better believe I will be putting my opinions on the backburner and will be having a grand ole typing profiting from another wonderful bull market. The charts look a lot better, this pullback has been very constructive, and now the next step is for breakouts and bounces off key support/averages to start happening rapidly everywhere. If charts continue to look the way they do I will soon be spending 3-4 hours scanning stocks. That is a good thing!
Overall, the market still could go any which way it wants. The bull is not strong enough to give me confidence higher prices are in the bag. Better charts, which are starting to try to show, would improve that outlook. However, the way the longs are holding up and still moving higher, with the lack of new shorts showing up or working when they do offer short positions, is a reason to lean to the long side. My mind might say no, but the charts are saying yes.
The current longs I have are weakening but the purchases I am making off the lows for trades still look good. When the proper breakouts start acting like FITB and HBAN did from the lows with their beautiful green BOP/volume filled charts, I will be giving you the clear sign that I am fully invested and holding on for the big gains. For now I say when you get some big gains make sure you take them in. If you go long (or short) and you do not see gains immediately, while we have a bit of a mixed market, make sure you take some to half to even all off. The only exception to hold on to a stock when it does not show you a gain immediately is when you get a very bullish intraday tail with it on volume.
As long as my charts look good, I feel good. My only beef is that the IBD indexes are lagging. I am not used to seeing these indexes lag and I am not used to being 1 1/2+ months deep into a rally and STILL not have ONE stock up 50%, after a breakout over the 50/200 DMA. The weakness is confirmed in the RS line and after reviewing all the big winners it is clear they are 99% from 52-week lows.
I am still going to focus on trading the bottoming stocks and I have two new longs we must watch for swing/day trading positions. I also have a list of longs for Platinum members, not listed to other areas, of stocks with very pretty charts I want everyone to watch off the bottom. One was up 8% immediately and while it isn't a RAD or CAR it has the start to be one. As long as these trading stocks want to rally from very oversold conditions I will continue to trade them in a bullish tape. When the CANSLIM and my 'Past Big Winner' max-green BOP stocks setup, then you can move your focus off the stocks from the bottom, because the only stocks that can produce 2,000% and 3,000% moves without whipping the hell out of you come after a base pattern is built and completed from a previous uptrend with the price above the 50 and 200 DMA. Another very important key to huge gains is huge EPS/sales growth. My best and greenest/prettiest longs in 2003-2007 almost all had very strong fundamentals either as a new company or a turnaround.
Great luck out there everyone. Subscribers you have four videos with over one hour of important stock market information in there and the longs and shorts analysis needs to be read before the start of the week. Great luck everyone, God bless, and ALOOOOOOHA from Maui where volcanic ash sure does make the daylight sky look very surreal. It also makes for killer sunsets!
top longs/(shorts) w/ TOTAL returns making me money TODAY: INOD 36% ASCA 24% FIRE 21% PALM 20% (CYT 59% OKE 39% PG 20% CHTT 15%)
FREE YouTube Video (part 2-4 in full size will be up SUN AM for subscribers):
If you are not familiar with these chart patterns, you can find them on the 'past big winners' area at my .com site or you can visit the IBD Investors Education site and go over the historical chart patterns that lead to big gains there. If you are a subscriber you can also go all throughout the 'General Market' post to find a ton of beautiful chart examples of other past winners that I was not part of but have studied. The bottom line is that if you are a subscriber, you have no excuse to not know a chart pattern. We have example after winning example on the site and IBD's past studies to look at to know what we need to see before we go heavily long.
The good news is that thanks to the Nasdaq losing RS to the SP500 about two weeks ago and that turning into a pullback it has allowed charts to build better basing patterns. As the rally was moving along I was getting confused as to why the IBD indexes continued to lag while stocks coming off the lows were doing so well. I believe that the market was beaten down unlike anything ever seen and besides an initial oversold burst of breakout momentum most stocks simply can not sustain big uptrends with the weight of past resistance ahead.
The 200 day moving average has proven to be very tough for the indexes to break through. However, the more the indexes test the line the higher the chances are that we will break to the upside. The charts that I see in my scans are hinting that we will be able to make some good money on the long side very soon. While it is VERY NICE to get a 200% to 300% pop from beaten down stocks, the plain truth is that the best, longest, safest, and biggest gains come AFTER a stock has setup over the 50 DMA with the 50 DMA over the 200 DMA. The most important part of all of this is to have a market in an uptrend on strong volume. We are getting that but until the past week we were not getting any pullbacks. So it is nice to see pullbacks as you need these to help launch sustainable long term rallies.
Indexes can not just keep rallying without pulling back and be healthy. When that happens you get 2008. From 2003-2007 the DJIA didn't even pullback 10% ONCE! As you can see 2008 proved that "that" wasn't healthy at all. The gains were great but those that are clueless to cutting their losses or in their ability to spot a top lost a lot of money. Thankfully those of us at BWT went short in November and pretty much stayed cash/short until March. By April we had some longs but it was apparant the stocks off the lows with the "hot" chart patterns were working better than history's past big winners. However, this was because of the depth of the 2008 destruction.
If this rally continues to pullback on lower volume, can hold the March lows, and then make higher highs, I think we are going to see a LOT of CANSLIM quality longs and beautiful max-green BOP filled speculative stocks setup and breakout and work. If this rally rolls over I am ready to go short the new leaders and get short the past leaders that are still LOVED like AAPL and RIMM. The fact these are so loved prove to me that I want to continue to look to short these stocks. However, setups like the new short we have for Monday is the main bandit I will be looking for.
Still focusing on the short side should not be in the interest of momentum traders right now. If the volume would have been higher the past week than the previous few weeks with the 3% to 5% losses on the indexes it would have been very bearish and I am sure we would have more active short scans. As it is, even on a down 1% day there weren't even 10 shorts in each of my scans. Heck there was barely 10 stocks COMBINED in my scans. Still there was a new short but for it to be a short now, for me, it has to show negative divergences in its chart. Obviously this one does.
Don't get me wrong just because I am going short doesn't mean I am focusing on them. No; with the volume coming in lower on the indexes and the charts in my long scans expanding on a down day with more-and-more stocks ending up on my 'possible future longs' list, it would be a crime for this market to fail right now. Especially with so many green BOP filled charts that have very strong price and volume action. It has been a VERY LONG time since i have seen SO MANY green to max-green BOP filled charts. The best news is that these bases aren't the 5th stage or 6th stage bases you would find in 2007 and early 2008 before it all broke loose. No, these bases, our the fresh bases that come in the start of new bulls from downtrends.
I am not certain that this is a bottom at all. In fact, I still lean on the side of it being a bear market rally that will eventually lead to a wonderful shorting opportunity for me. The best thing about the CANSLIM methodology, however, is that my opinion doesn't mean crap. For all I know, we could have "the bottom" and we are about to see a lot of stocks setup in the max-green BOP, huge accumulation filled, and tight price pattern charts that we saw in 1999 and 2003. Every regular bull market looks like 2003 so that should give a lot of you comfort in knowing that if we are only weeks to months away from a real bull market we are going to be making a lot of money in leading stocks soon.
If, however, the economy is as bad as it looks and that the extremely foolish socialist policies of this incompetent administartion is going to continue, I can't see why stocks would rise for the long term. Still if stocks setup in base-on-base, double bottom, cup, cup w/ handle, ascending base, or high-tight-flag patterns with max green BOP and huge accumulation with "fresh" breakouts you better believe I will be putting my opinions on the backburner and will be having a grand ole typing profiting from another wonderful bull market. The charts look a lot better, this pullback has been very constructive, and now the next step is for breakouts and bounces off key support/averages to start happening rapidly everywhere. If charts continue to look the way they do I will soon be spending 3-4 hours scanning stocks. That is a good thing!
Overall, the market still could go any which way it wants. The bull is not strong enough to give me confidence higher prices are in the bag. Better charts, which are starting to try to show, would improve that outlook. However, the way the longs are holding up and still moving higher, with the lack of new shorts showing up or working when they do offer short positions, is a reason to lean to the long side. My mind might say no, but the charts are saying yes.
The current longs I have are weakening but the purchases I am making off the lows for trades still look good. When the proper breakouts start acting like FITB and HBAN did from the lows with their beautiful green BOP/volume filled charts, I will be giving you the clear sign that I am fully invested and holding on for the big gains. For now I say when you get some big gains make sure you take them in. If you go long (or short) and you do not see gains immediately, while we have a bit of a mixed market, make sure you take some to half to even all off. The only exception to hold on to a stock when it does not show you a gain immediately is when you get a very bullish intraday tail with it on volume.
As long as my charts look good, I feel good. My only beef is that the IBD indexes are lagging. I am not used to seeing these indexes lag and I am not used to being 1 1/2+ months deep into a rally and STILL not have ONE stock up 50%, after a breakout over the 50/200 DMA. The weakness is confirmed in the RS line and after reviewing all the big winners it is clear they are 99% from 52-week lows.
I am still going to focus on trading the bottoming stocks and I have two new longs we must watch for swing/day trading positions. I also have a list of longs for Platinum members, not listed to other areas, of stocks with very pretty charts I want everyone to watch off the bottom. One was up 8% immediately and while it isn't a RAD or CAR it has the start to be one. As long as these trading stocks want to rally from very oversold conditions I will continue to trade them in a bullish tape. When the CANSLIM and my 'Past Big Winner' max-green BOP stocks setup, then you can move your focus off the stocks from the bottom, because the only stocks that can produce 2,000% and 3,000% moves without whipping the hell out of you come after a base pattern is built and completed from a previous uptrend with the price above the 50 and 200 DMA. Another very important key to huge gains is huge EPS/sales growth. My best and greenest/prettiest longs in 2003-2007 almost all had very strong fundamentals either as a new company or a turnaround.
Great luck out there everyone. Subscribers you have four videos with over one hour of important stock market information in there and the longs and shorts analysis needs to be read before the start of the week. Great luck everyone, God bless, and ALOOOOOOHA from Maui where volcanic ash sure does make the daylight sky look very surreal. It also makes for killer sunsets!
top longs/(shorts) w/ TOTAL returns making me money TODAY: INOD 36% ASCA 24% FIRE 21% PALM 20% (CYT 59% OKE 39% PG 20% CHTT 15%)
FREE YouTube Video (part 2-4 in full size will be up SUN AM for subscribers):
Thursday, May 14, 2009
Volume Slides as Stocks Move Higher After Suffering from Wednesday's Price Decline
The market was able to avoid further price deteriotion with a low volume move higher. Volume on the NYSE fell nearly 15% while the NASDAQ volume fell 8%. Although the rebound lacked volume it was nice to see the market not follow through to the downside. Ideally, today we would have seen institutions step up and support this market. Instead, it appears for the moment they simply stood aside while stocks moved higher. All in all not an excellent day, we just need more work if this uptrend is going to last.
The NASDAQ led the market in gains finishing up 1.5% while the IBD 100 index was right behind it. A glimmer of hope as we will need the IBD indexes take over as the leaders of this market. It will have to come relatively soon as we do have quite a bit of distribution days we are dealing with on the indexes. The Dow Jones has 5 distribution days while the NASDAQ and S&P500 have 4. When we see a major index hit 5 or 6 distribution days it ends the confirmed uptrend. It is vital we starting see the market do the following: show accumulation and all pullbacks in lighter volume with nominal price declines. The market will show us the clues it is up to us to take them and act appropriately.
The good news is we are still seeing New Highs beat New Lows but the number of New Highs slowed up today on the rebound. Again, there was underlying weakness to the move today as we are not seeing BULLISH signals. New Highs vs. New Lows is not the end all be all, but it is somewhat telling the type of market we are in. I would love to see NH vs NL stay above 1.0 even with a pullback on lighter volume to signal that there is strength within this market.
What we need now is the market to start showing accumulation with IBD stocks leading the way. In order for this market to continue to march higher we'll need CANSLIM stocks leading the way otherwise this uptrend will certainly fizzle into oblivion. We do have stocks that could be potential big winners but this market will need to cooperate in order for these potential big winners come to life.
FREE YouTube Video:
The NASDAQ led the market in gains finishing up 1.5% while the IBD 100 index was right behind it. A glimmer of hope as we will need the IBD indexes take over as the leaders of this market. It will have to come relatively soon as we do have quite a bit of distribution days we are dealing with on the indexes. The Dow Jones has 5 distribution days while the NASDAQ and S&P500 have 4. When we see a major index hit 5 or 6 distribution days it ends the confirmed uptrend. It is vital we starting see the market do the following: show accumulation and all pullbacks in lighter volume with nominal price declines. The market will show us the clues it is up to us to take them and act appropriately.
The good news is we are still seeing New Highs beat New Lows but the number of New Highs slowed up today on the rebound. Again, there was underlying weakness to the move today as we are not seeing BULLISH signals. New Highs vs. New Lows is not the end all be all, but it is somewhat telling the type of market we are in. I would love to see NH vs NL stay above 1.0 even with a pullback on lighter volume to signal that there is strength within this market.
What we need now is the market to start showing accumulation with IBD stocks leading the way. In order for this market to continue to march higher we'll need CANSLIM stocks leading the way otherwise this uptrend will certainly fizzle into oblivion. We do have stocks that could be potential big winners but this market will need to cooperate in order for these potential big winners come to life.
FREE YouTube Video:
Monday, May 11, 2009
Volume slides Across the Board as Small Cap Stocks Lead the Market Lower with the S&P500 Not Far Behind
Opening the week stocks end lower on lighter trade as Big Cap Techonology stocks aid the NASDAQ finishing well off the days low. The S&P500 was unable to sustain any buying as the index closed near its low-of-the day. A day of consolidation is welcomed, but having a large percentage drop is a bit concerning. Let's not overshadow the NASDAQ's resilency here even though volume finished the day lower. Today, in of itself wasn't a bad day but will need to be taken into context over the next few trading sessions.
A positive note would be to see the Small Caps lead the market tomorrow in higher trade signaling the market is being accumulated. It'll be important that we do not sell off any further on volume as this would highlight there is more weakness to come. Remember, we have come a long way off the lows and have yet to see the market consolidate it's move. Ideally, we'll remain quiet in the indexes over the next week or two while we have the IBD Indexes taking charge. IBD indexes are a signal of strength and will alert us whether or not the current rally has the juice to continue the uptrend. Leading stocks in leading industries are our key to this the uptrend and we are in need of their leadership.
The issue for the indivdual trader is whether or not you have been caught up in the intraday noise. It is the market's job to wear out its participants and if you do not have a sound game plan you are going to be warn out along with your capital. If you are following the number one rules, cutting losses short you are most definitely on the path of destorying your capital. Cutting losses will save your portfolio and will keep you in the game for when CANSLIM stocks begin to start flying.
For now, we'll need the IBD indexes to sure up while the rest of the market pulls back. This will clue us into if we are going to see another leg up with this rally. As always, we'll be on top of the action and will react accordingly.
FREE YouTube Video:
A positive note would be to see the Small Caps lead the market tomorrow in higher trade signaling the market is being accumulated. It'll be important that we do not sell off any further on volume as this would highlight there is more weakness to come. Remember, we have come a long way off the lows and have yet to see the market consolidate it's move. Ideally, we'll remain quiet in the indexes over the next week or two while we have the IBD Indexes taking charge. IBD indexes are a signal of strength and will alert us whether or not the current rally has the juice to continue the uptrend. Leading stocks in leading industries are our key to this the uptrend and we are in need of their leadership.
The issue for the indivdual trader is whether or not you have been caught up in the intraday noise. It is the market's job to wear out its participants and if you do not have a sound game plan you are going to be warn out along with your capital. If you are following the number one rules, cutting losses short you are most definitely on the path of destorying your capital. Cutting losses will save your portfolio and will keep you in the game for when CANSLIM stocks begin to start flying.
For now, we'll need the IBD indexes to sure up while the rest of the market pulls back. This will clue us into if we are going to see another leg up with this rally. As always, we'll be on top of the action and will react accordingly.
FREE YouTube Video:
Saturday, May 09, 2009
Big Cap Technology Holds Back the Nasdaq as Small Caps Lead the Market Higher on Lower Volume Across the Board
By Market Speculator
It was all about the April Employment figures released by the Government this morning which showed the economy lost 539,000 jobs during the month of April. March job losses were revised down to 699,000 lost. The unemployment rate, reported by the government was 8.9%. Futures reacted positively to the news and helped stocks gap higher at the open. However, big cap technology weighed heavily on stocks yanking the Nasdaq into negative territory. Volume was running hot during the morning hours and as stocks began to see support volumed tailed off into the end of the day. The positive on the day was that stocks did not accelerate to the downside, but lacked the volume and conviction to overcome Thursday's session.
Leading stocks were left behind has Super Regional banks led the market higher. Since the 3/12/2009 follow-through day on the S&P500 we have yet to see any of the IBD indexes lead this market. For a more sustainable move we'll need to see the Relative Strength lines of these indexes to begin to tick higher. Today, once again the IBD indexes lagged highlighting the weakness which is leading this market.
At some point this market will need to take a significant breather. Up to this point we have yet to see this be fullfilled, but we've seen signs that we could be on the verge of a pull back. Thursday we witness the market finally succumb to the selling pressure and end in a nasty day of distribution. Friday the market had the chance to re-establish itself and it failed to do so. This failure could be significant if we begin to roll over this coming week on higher volume. Ideally, the market simply rests here for a few weeks while volume remains tame allowing CANSLIM stocks setup in longer bases.
Up to this point, as to be expected we've seen very sloppy chart patterns where stocks are moving out of. Unfortunately, these tend to fail and do signal the market is headed for another turn. There are a few stocks that have made nice runs from the March bottom, but it is time to see these stocks setup in clean bases. Breakouts have a better probability of success when it is from a sound base rather than a sloppy base.
Keep your eye on the ball.
top longs/(shorts) w/ TOTAL returns since PURCHASE making me money TODAY: SIGA 21% THM 20% FIRE 32% SOLR 36% ASCA 42% ARST 20% (MOS 47% CHTT 15%)
FREE YouTubeVideo:
It was all about the April Employment figures released by the Government this morning which showed the economy lost 539,000 jobs during the month of April. March job losses were revised down to 699,000 lost. The unemployment rate, reported by the government was 8.9%. Futures reacted positively to the news and helped stocks gap higher at the open. However, big cap technology weighed heavily on stocks yanking the Nasdaq into negative territory. Volume was running hot during the morning hours and as stocks began to see support volumed tailed off into the end of the day. The positive on the day was that stocks did not accelerate to the downside, but lacked the volume and conviction to overcome Thursday's session.
Leading stocks were left behind has Super Regional banks led the market higher. Since the 3/12/2009 follow-through day on the S&P500 we have yet to see any of the IBD indexes lead this market. For a more sustainable move we'll need to see the Relative Strength lines of these indexes to begin to tick higher. Today, once again the IBD indexes lagged highlighting the weakness which is leading this market.
At some point this market will need to take a significant breather. Up to this point we have yet to see this be fullfilled, but we've seen signs that we could be on the verge of a pull back. Thursday we witness the market finally succumb to the selling pressure and end in a nasty day of distribution. Friday the market had the chance to re-establish itself and it failed to do so. This failure could be significant if we begin to roll over this coming week on higher volume. Ideally, the market simply rests here for a few weeks while volume remains tame allowing CANSLIM stocks setup in longer bases.
Up to this point, as to be expected we've seen very sloppy chart patterns where stocks are moving out of. Unfortunately, these tend to fail and do signal the market is headed for another turn. There are a few stocks that have made nice runs from the March bottom, but it is time to see these stocks setup in clean bases. Breakouts have a better probability of success when it is from a sound base rather than a sloppy base.
Keep your eye on the ball.
top longs/(shorts) w/ TOTAL returns since PURCHASE making me money TODAY: SIGA 21% THM 20% FIRE 32% SOLR 36% ASCA 42% ARST 20% (MOS 47% CHTT 15%)
FREE YouTubeVideo:
Thursday, May 07, 2009
A Very Nasty Reversal Hits Stocks With Volume Higher Across The Board; Today Was The First Time Both Indexes Fell Hard On Volume Since The March Rally
I have not done commentary for a while because things were pretty steady there for us since the March lows. Basically all that we have had to do was just manage our longs and our profits as those longs gave them to us. However, what happened on Thursday was a little different than what we have seen before on previous selloffs.
On previous selloffs that we have had, we have either had one or the other index selloff on heavy volume or when the indexes sold off it was on pretty light volume. Thursday, however, came on heavy volume for both indexes. Not only that but stocks like TSYS, SWHC, and NFLX are just some of the examples of how leading stocks were treated on Thursday.
Now, do not get me wrong, we still have a lot of solid charts out there that tell us to stay pat and not get too spooked on this one selloff. However, at the same time, I must say that I have not seen a pullback during this previous uptrend that has given us as much reason for concern as this one has. Just the fact that leading stocks and my best looking stocks had such a poor day tells me that today was just not a weak day for lagging stocks. It was a weak day for all stocks.
The biggest problem in this rally, for me personally, has been the lack of max-green BOP filled charts with wonderful price/volume action. With that, at the same time, leading stock have lagged the ENTIRE rally. If you go back to November, when some indexes bottomed, you can see that the IBD 100 and IBD 8585 continued to selloff into the March lows.
When we finally hit the March lows and the Nasdaq and SP 600 hit recent lows and ran hard (up around 45% for both indexes) the IBD 100 and IBD 8585 did not lead at all. Sure, there might have been a day or two but a day or two does not a rally make. If this rally was for real, you would be able to take one look at the IBD 100 and IBD 8585 and go "yep, those indexes sure are stronger than the overall market." This would appear with a RS line that was in an uptrend off the lows (not a downtrend like this is) and an IBD100 and IBD8585 index in a steeper uptrend. Instead these indexes uptrend has been very much sideways.
Now with today's selloff added to the recent stall the past couple of days on these indexes and NOW it appears that the indexes are rolling over. If that is the case, I still have 20 shorts and am ready to add to those gains and pick up more shorts while getting rid of my longs. But I have to admit it would be nice to keep my 25 longs and get rid of the remaining shorts. Either way, it doesn't really matter because these positions still make up a very short amount of my portfolio.
Well, if I don't have a lot of longs and I don't have a lot of shorts, what do I have a lot of? That's easy at these levels: cash! Cash is still the asset I hold the most of because all during the rally I waited and waited and waited and waited for my max green BOP charts to build with TIGHT bases. At the same time, I waited for high quality CANSLIM longs to setup and breakout of proper basing patterns that were high quality. We did run into some of those and more worked than did not. However, the few that worked did not put in a ton of "impressive" gains. Instead small gains and maybe a 20% here and there and we call ourselves lucky. That sure is a LOT less than we used to get in previous uptrends.
Maybe we got too many bulls too quickly. Last week, in the middle of the rally, we were comforted by knowing that bulls beat bears on the AAII poll and on the Investors Intelligence poll (36% bulls to 37.2% bears). However, this week, the Investors Intelligence poll shows 40% bulls and 35% bears which shows that some are starting to embrace this bounce. Not only is this embrace not wise by some but it is dangerous. Some are getting long without any resolve to where they are going to cut their lost. The good news about BigWave investing is that if you have a gain you let it ride...unless it took too long to get the 20% gain at first...and if you have a loss you get wrong of it quickly.
Stay patient, stay flexible with a bias to both longs and shorts but mainly to cash, and remember this too shall pass and we will have a market that rewards patient and smart investors. Remember, Jesse Livermore clearly stated that the big money was made only ONE WAY for him: in his sitting. It was never his trading that made him the BIG money he said. It was ALWAYS his sitting. Sitting during a big uptrend (like TASR in 03 or LMLP in 99) on the long side, sitting in a big downtrend (like CETV and CEDC 2008) on the short side, and sitting on cash when the market was in no trend whatsoever other than a painful chop for those forced to be long or shorts. Aloha and GREAT LUCK!! :)
--Joshua Hayes, CEO BigWaveTrading Capital Management
FREE (FULL SIZE VERSION FOR SUBSCRIBERS ONLY IN THE GOLD FORUMS ALONG WITH EXTRA VIDEOS) YOUTUBE VIDEO:
On previous selloffs that we have had, we have either had one or the other index selloff on heavy volume or when the indexes sold off it was on pretty light volume. Thursday, however, came on heavy volume for both indexes. Not only that but stocks like TSYS, SWHC, and NFLX are just some of the examples of how leading stocks were treated on Thursday.
Now, do not get me wrong, we still have a lot of solid charts out there that tell us to stay pat and not get too spooked on this one selloff. However, at the same time, I must say that I have not seen a pullback during this previous uptrend that has given us as much reason for concern as this one has. Just the fact that leading stocks and my best looking stocks had such a poor day tells me that today was just not a weak day for lagging stocks. It was a weak day for all stocks.
The biggest problem in this rally, for me personally, has been the lack of max-green BOP filled charts with wonderful price/volume action. With that, at the same time, leading stock have lagged the ENTIRE rally. If you go back to November, when some indexes bottomed, you can see that the IBD 100 and IBD 8585 continued to selloff into the March lows.
When we finally hit the March lows and the Nasdaq and SP 600 hit recent lows and ran hard (up around 45% for both indexes) the IBD 100 and IBD 8585 did not lead at all. Sure, there might have been a day or two but a day or two does not a rally make. If this rally was for real, you would be able to take one look at the IBD 100 and IBD 8585 and go "yep, those indexes sure are stronger than the overall market." This would appear with a RS line that was in an uptrend off the lows (not a downtrend like this is) and an IBD100 and IBD8585 index in a steeper uptrend. Instead these indexes uptrend has been very much sideways.
Now with today's selloff added to the recent stall the past couple of days on these indexes and NOW it appears that the indexes are rolling over. If that is the case, I still have 20 shorts and am ready to add to those gains and pick up more shorts while getting rid of my longs. But I have to admit it would be nice to keep my 25 longs and get rid of the remaining shorts. Either way, it doesn't really matter because these positions still make up a very short amount of my portfolio.
Well, if I don't have a lot of longs and I don't have a lot of shorts, what do I have a lot of? That's easy at these levels: cash! Cash is still the asset I hold the most of because all during the rally I waited and waited and waited and waited for my max green BOP charts to build with TIGHT bases. At the same time, I waited for high quality CANSLIM longs to setup and breakout of proper basing patterns that were high quality. We did run into some of those and more worked than did not. However, the few that worked did not put in a ton of "impressive" gains. Instead small gains and maybe a 20% here and there and we call ourselves lucky. That sure is a LOT less than we used to get in previous uptrends.
Maybe we got too many bulls too quickly. Last week, in the middle of the rally, we were comforted by knowing that bulls beat bears on the AAII poll and on the Investors Intelligence poll (36% bulls to 37.2% bears). However, this week, the Investors Intelligence poll shows 40% bulls and 35% bears which shows that some are starting to embrace this bounce. Not only is this embrace not wise by some but it is dangerous. Some are getting long without any resolve to where they are going to cut their lost. The good news about BigWave investing is that if you have a gain you let it ride...unless it took too long to get the 20% gain at first...and if you have a loss you get wrong of it quickly.
Stay patient, stay flexible with a bias to both longs and shorts but mainly to cash, and remember this too shall pass and we will have a market that rewards patient and smart investors. Remember, Jesse Livermore clearly stated that the big money was made only ONE WAY for him: in his sitting. It was never his trading that made him the BIG money he said. It was ALWAYS his sitting. Sitting during a big uptrend (like TASR in 03 or LMLP in 99) on the long side, sitting in a big downtrend (like CETV and CEDC 2008) on the short side, and sitting on cash when the market was in no trend whatsoever other than a painful chop for those forced to be long or shorts. Aloha and GREAT LUCK!! :)
--Joshua Hayes, CEO BigWaveTrading Capital Management
FREE (FULL SIZE VERSION FOR SUBSCRIBERS ONLY IN THE GOLD FORUMS ALONG WITH EXTRA VIDEOS) YOUTUBE VIDEO:
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