Big Wave Trading incorporates a Mechanical Disciplined Signal Generated System and uses a Market Model system to invest profitably in the stock and futures markets. Big Wave Trading also incorporates a strict risk management system and cuts losses immediately if a new purchase does not work in our favored direction right away.
"A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government." - Thomas Jefferson
Looking across the blogosphere and media outlets one might have expected a relief rally. Logic and indicators pointed to an oversold market. Thursday's action began positive, traders were getting behind the idea of we could rally. Obama's budget proposal was set to be released during the morning hours of the market. During the 2008 Presidential Campaign Obama pledged to reduce the operating budget deficit; traders were expecting to see Obama to adhere to his campaign promise. However, upon the release of the budget the market began to sell off. There were no improvements to the budget deficit, but it was ballooned to a tune of $1.75 TRILLION dollars. In addition to the budget deficit the proposal ATTACKS healthcare providers effectively squashing future profit potential. The market is not to be argued with, it is foreshadowing troubled times its best we pay attention.
In Tuesday's market wrap I mentioned the Equity Put/Call ratio and how it was signalling complacency. It continues, the equity put/call remains near lows as the market remains near its lows. Alongside the put/call ratio the VIX index is showing how the selling is not sparking any FEAR in the market. Even short term bottoms will have these indicators showing SOME level of fear. Not this time, sellers are complacent and it shows there is high level of hope that this market rallies in the near term. If we are able to lift off the lows it will be a weak move.
The biggest thing YOU can do is to make sure you paying down your debt and keeping cash on hand to pay for groceries. As for this market, we are finding ways to make money. Whether it be long or short we are still making gains.
Gold and silver are pulling back and consolidating from an impressive move higher. Fears regarding the world's economy and the confidence the world has in its available currencies has gold/silver bulls out. History has shown when confidence is lost in a fiat currency gold and silver are sought after as a safe haven. Once confidence is lost a mass exudos occurs from the paper currency to precious metals. So far, it appears we are headed down the path of a dollar crisis.
GDP numbers for the fourth quarter are set to be released this morning. It'll be focal point for the market as it opens. I'm afraid, regardless of the annualized figure it will not cure what ailes this economy. Cutting spending and taxes is the step in the right direction.
Enjoy the remainder of the work week and have an enjoyable weekend.
M.S.
Top longs/(shorts) with TOTAL returns making me money TODAY: ANCI 59% (TITN 56% GTIV 19% CPRT 23% GGB 64% CEO 31% OKE 48% APD 49% ARB 73% WRB 15% K 22% LLL 25% RDK 33% PG 23% RIMM 60% MCY 32% AMSG 37% PLCE 33% SPG 60% IPHS 51% CYT 70% SDA 80% PRGO 31% FSYS 17% CASY 30% CEDC 86% AAPL 44% AMX 53% CETV 93%)
Overall it was a negative day, of course, with the markets down around a little over 1%. However, the SP 600 lost almost 2.5% and the IBD 100 full of leading stocks fell 1.4% showing that the leading stocks and small-cap stocks that usually lead new bull markets. So the fact that they weaken worse than the overall market when people are talking about a supposed bottom really leaves me scratching my head.
There is some good news for bulls however in that, for the first time since this downtrend got started, I actually had a significant down day with zero new possible shorts and two new longs. Not only that one long is a CANSLIM quality champ and the other is in the leading mining-gold/silver stocks industry. So these two championship longs showing up in a day where the market loses over 1% is pretty impressive. However, honestly, without a ton of volume in the market, the gains are not "really" that impressive. It is what it is.
If this was a raging bull market like 1995, 1998, 1999, and 2003 that I have witnessed or participated in, I would have no problem jumping up and down saying GET LONG THIS STOCK IN BULK as the odds would be well in our favor. Right now, it should be very obvious to all of those out there, besides the few crazy daytraders that can actually trade this market and make money ON A CONSISTENT BASIS--this one day lucky stuff doesn't cut it with me and I will never take you one day wonders seriously. It is the long term that will ALWAYS count--most investors should be fully in cash or have only small long gold or small short the market positions.
Overall it was a dull day with higher volume and signals a lot of action in the churning arena. A lot of firms are flipping shares around creating what looks like a market but it is obvious from watching one day drops of 21% after a stock takes 6 months to rally 10% is not a market where everyone is at home. Someone has fallen asleep at the wheel and something needs to be done. I like the idea of going back to a pre decimal period, end regulation FD, and stop the program trading. End this and we would see a very efficient market come back. However, my final recommendation would actually HURT ME IN MAKING MONEY WHICH PROVES IT IS THE MARKET I CARE ABOUT AND NOT MY POCKET: the whole process of having no uptick is insanity. There needs to be an uptick rule and the rule should be put back. The market used to have a way of working that seemed honorable. Now it is hard to honor and chart when you know something could come out tomorrow that kills it. It is such a different world out there but even though the world is changing one thing will always remain the same: CAN SLIM® System Is #1 Growth Strategy From 1998 Through 2008. An 11-year, independent study by the American Association of Individual Investors found IBD's CAN SLIM Investment System gained +1,351.3% while the S&P 500 dropped -6.9%.
Why in the heck is anyone reading this using ANY OTHER type of methodology. Why are you not joining me in MASTERING the GREATEST methodology out there for making money in the stock market YEAR-IN-AND-YEAR-OUT! Not just one lucky fluke trade every three years. A real living. An honest fun living.
Have a great intraday most of you and for my subscribers I will see you all near the last three hours to the closing bell, tomorrow! Great luck out. Let's make more money. I might have lost my total 10% return this year but compared to the SP 600's 21% loss, I guess I can chalk up the first two months to the win column. ALOHA and see you in the chat room!
top longs/(shorts) with TOTAL returns making me money TODAY: ACNI 57% (CPRT 23% CASY 28% POT 49% K 21% SPG 57% MCY 30% AMX 54% BOH 22% CEO 30% TITN 56% CYT 69% LLL 23% AMSG 27% APD 49% ARB 72% PLCE 30% IPHS 49% CETV 92% CEDC 85%)
Today was sure one ugly day for the market as indexes fell hard across the board. About the only thing positive you can say is that volume was lighter. However, when stocks are falling almost 4% I am not sure volume is that important.
What is important is that the market is proving those that were patient and held shorts while the low volume rally occurred were right. I now have many many many shorts up over 50% in short amounts of time along with new shorts already up 15%+ in many issues. What makes this EVEN BETTER is that gold stocks and the commodities of gold, silver, and platinum are rocking it. Not only that, but the rest is in cash sitting safely ready to pounce on the next round of leaders if and when they setup.
Basically I would have to say that Friday and Monday have been home runs for yours truly and I have almost already returned my total return for last year. This tells me that the market is getting some sense back with it, even if it is not rewarding leading growth-stock investors yet. It is still rewarding those that know how to get long the right leading stocks at the right time. Whoever said you can't time the market must not have EVER learned about CANSLIM.
Speaking of CANSLIM, I feel it is very important to post something I read this morning when I returned from Waikiki, O'ahu:
CAN SLIM® System Is #1 Growth Strategy From 1998 Through 2008. An 11-year, independent study by the American Association of Individual Investors found IBD's CAN SLIM Investment System gained +1,351.3% while the S&P 500 dropped -6.9%.
If some of you have been reading me for years, have seen the returns of my 'past big winners' in my longs section, have seen these returns by IBD over the past 11 years, and see my returns now on my current shorts:
top shorts with TOTAL RETURNS making me money TODAY: MOS 58% GGB 67% SPG 61% CEDC 84% POT 52% CYT 70% MCY 32% APD 48% TITN 57% CASY 29% FSYS 15% IPHS 50% CETV 92% AMX 53% OKE 47% PRGO 28% SDA 80% AAPL 45% RIMM 62% CINF 15% LLL 23% BOH 24% RDK 32% PG 23% CPRT 24% WRB 16% ARB 72% PLCE 30% CEO 32%
..and then let's not forget my Gold ETFs and my gold long in ***. There is another 27% gain in one month, when most are losing money.
If you are not a bigwavetrader yet, I am not sure why. My returns during the past bull market were better than the CANSLIM system which was ranked #1 out of 56 so that would put me #1 out of 57 and my current short returns I am pretty sure are destroying most that I see out there. Usually I am real humble. But after having back to back days with over 5% gains when the market is down 5% the past two sessions on the NYSE, I think I deserve to toot my own horn. If I don't do it, God knows no one else will. How can I be so consistently right yet go no respect by the major media. I guess you have to be a slave to OPM to get those gigs. ;) At least those of you with me know that when the bear ends and the bull begins we will all become very wealthy and will be at the top of the pile when this bear market gets done destroying this economy. Thanks SPENDINGULUS bill!
Stocks ended the week the way that they started with all indexes closing down across the board with indexes down anywhere from .1% on the Nasdaq to down 1.6% on the NYSE. The bad news about the losses, today, is that the NYSE and SP-500 (-1.1%) suffered a clear distribution day. The DJIA had a huge distribution day but the bullish intraday reversal and the huge level of volume would appear to be more short-term bullish for me. Why? Because the DJIA has been down 20 of 31 days before today's huge volume down day's intraday bullish reversal. Either way technically they are distribution days but when using "art" with "science" it is clear to see today's losses were not vicious.
What is more problematic is that the longs scans looked worse than only a 1% down day. That just tells me that the market probably is in no mood to rally any time soon and this is probably why we can not find ANY "hottie" chart patterns or high quality CANSLIM stocks setting up in proper patterns with growing fundamentals. The market has turned down on the micro and macro and it will take time to get these stocks growing again. It will even take longer if we go down the road to socialism. If we take a track that has proven to NEVER EVER work in the history of the world, then it might be safe to say the "hottie" stocks might not setup. If that is the case, we will just keep focusing on our shorts in the market and our gold/silver/platinum longs which will make us excellent money in a market like that.
A lot of people seem to not realize that there is a HUGE correlation between long bull markets and technology and financials leading. Even in 2003 the huge bull market rally that we saw that year did not just have technology leading it also had banking leading. Stocks like GS were leading the sector higher making these companies a lot of money. This happened in 1999 also as one of my best longs was a payment system stock that worked in banks. So you normally need banks to help rally the market if you have a healthy market. So I am sitting here wondering what is going to happen if the socialist agenda of our Congress is put in place and our banks become nationalized. You better pray to the Lord above that this doesn't happen. It will flatline and kill banks as investment vehicles and somehow excess capacity will have to be moved from these dead banks to new alive stocks that haven't been killed by socialism yet. There are always future technologies like nano dust, artificial intelligence, security, robotics, and many other green technologies. However, if the venture capitalist have no capital to loan and the banks have no money to loan. NOBODY is going to make money. So let's pray our system makes it through this.
For the week, the market took it on the chin with the IBD 100 falling 4.5%, the DJ down 6.2%, the NYSE lost a whopping 7.7%, the SP 500 lost 6.9%, and the Nasdaq lost 6.1%. It was not a pretty week and that can be confirmed with the amount of longs we had decrease from 10 to 5 and our shorts increase from 39 to 43. I think it is obvious which side is the right side right now, unless you are keeping warm in cash.
With the mess our leaders are making with these trillion dollar SPENDINGULUS bills, these $75 billion housing plans, this exponential printing of money, and the nationalization of banks have me thinking only one thing for the long-term. That is GOLD baby! My gut tells me ANY pullback we can EVER get to the 50 day moving average or the 200 day moving average should be an area that we buy a LOT of gold. The 21 DMA can even be used. However, I have 25% of my IRA in Gold and would not mind putting 50% in it if I can get a proper pullback. I will not chase and will remain patient and let it come to me. When my "hot" max green BOP filled, heavy accumulation filled, and excellent price action stocks setup, I will be going long and strong.
However, if they don't show up and an opportunity to go long comes along, a bounce of Gold right off the 50 day moving average sure looks like a smart thing to do when you have a long-term time frame based on the US Dollar collapsing under the spending in the gov., the corruption in the gov., the printing in the gov., and the lying in the gov. This will lead to China to stop buying and will send Gold/Silver/Platinum exploding higher. Gold is already made us a good amount of money in a short time and we hope more is left. Don't forget to keep an eye on AGQ for a BIG ultra silver play. This is a very bullish silver chart and any pullback BEFORE a climax run should be on a lot of investors wish list.
The bottom line this Friday is that I have had a GREAT week with our gold longs producing large gains in our big holdings, our shorts ALL did us very well giving us nice gains, and the best part is that we still have a LOT of cash on the sidelines to use in case any of those exciting stocks we have fallen in love with since 1998 come along and setup again. I know it will be sooner than later as we still have some nice charts holding up out there that could become "hot, perfect, wonderful" chart patterns in a few more weeks to months. We will see, it is still early. Remember everyone, CASH IS STILL KING, SHORTS ARE QUEEN, and GOLD/SILVER IS PRINCE!
top longs/(shorts) with TOTAL RETURNS since purchase MAKING ME MONEY TODAY: ANCI 56% (CETV 92% CEDC 82% CYT 68% SDA 79% RIMM 60% GGB 63% TITN 54% AMX 51% APD 44% OKE 44% IPHS 48% CEO 32% RDK 30% PG 21% CPRT 22% BOH 22% PLCE 29% AMSG 27% PRGO 25% LLL 19% K 19% WRB 15%)
Stocks were mixed today with lower volume on the NYSE and the Nasdaq. Overall stock indexes leaned to the downside but the DJIA was up 0.04% today showing itself as the diamond in the rough. The worst index was the SP 600 falling 1.1%. Despite the tiny losses today I would have to say that this has been another positive 'day-after' following another very bearish market session. We have seen the market fall at least 3% in at least five-sessions since 2009. Any of those selloffs on heavier volume could have broken into a big downtrend. However, after every nasty selloff we are seeing some sort of minor support coming into the markets.
Now this support is not on heavy volume and leading/hot! stocks are still not participating by setting up in proper bases with strong fundamentals that are followed by big breakouts on strong volume. While these stocks continue to not show up it is clear that the market is not ready to trend up or down in a very harsh momentum fashion.
It does appear the market is ready to rollover and hit new lows and the long-term shorts that I have that are still working and making me good money, there have been some recent new shorts that are working wonderful since we went short. The fact that these new shorts are working along with our old shorts still working indicates to me that the trend is still down. Especially with all time-frames pointing down on all indexes. The long-term trend, the intermediate trend, the sub-intermediate trend, and the short-term trend are all down right now and that must be respected.
The only difference with this leg down is that for the first time since the last LAME rally attempt from March to May in 2008 we actually have the few leading sectors of the market actually racking up gains. Like I said in previous post most of the top industry groups that have been showing up on IBD's top industry groups have already been strong for a while and whenever they made it to the top were soon putting in toppy formations. This happened to small banks, medical, security, and education stocks in 2008. This time mining-gold/silver is leading and their charts in that industry group still look very fresh with a lot of the chart patterns forming that look good coming from very early points in the bases. So if we have ever had a chance to make money on longs this is the time with mining-gold/silver stocks clearly leading.
While it is nice to see some leaders moving FINALLY, you must remember that the market is still not rallying on heavy volume. Instead the pattern of higher volume selloffs followed by lower volume rallies continue. This is the pattern of a market that should be shorted on the low volume rallies and not bought when the rallies start. Only when we have more CANSLIM quality and "HOT to perfect" chart setups will I get fully bullish. Until better leaders lead the way higher and the market rallies on lower volume, I will just take what I can in the current leaders and take my profits on the way up at the 25%, 50%, 100%, 150%, 200%, etc. marks.
Remember as the trend of a nation's GDP goes so goes its stock market. The Fed indicated today that GDP would fall in 2009 and that they will be more transparent. While the transparency is always good it is not good that we have a falling GDP. This means that our P/E ratios are too high right now and that they will have to come down to be considered "great value" plays for the lame fund managers that use P/E ratios to make their investing decisions.
This is a very nasty news driven market that is making it impossible for long-momentum and CANSLIM investors to make money. Your odds are always against your favor in a downtrend but a downtrend lasting so long without a little rally is a very discouraging thing and can only mean that when we do bounce and those leading stocks do show up that they will KILL IT as most investors will be looking the wrong way when it is time to load the boat.
But with the market being at the whim of the news, all of this Obama mortgage plan crap, bailouts, and SPENDINGULUS bills can't be good for the market long-term. I wouldn't mind having a spendingulus bill rally that sends some stocks on speculative runs allowing us to make BIG MONEY so that we can turn around and short it when the house of cards built on socialism's lies come crashing down.
I would rather be DEAD! than live in a world of complete Socialism! Long: THE TRUTH and Capitalism - GREED Short: ANY form of centralized planning--communism, socialism, environmentalism, marxism, and the other scummy slimeball sick-in-the-head big-government brainwashed economically-ignorant elitist parties.
top shorts with their total returns since my first purchase MAKING ME MONEY TODAY: AAPL 41% CETV 91% CEDC 80% SDA 78% CYT 66% AMX 49% GGB 59% OKE 41% RIMM 57% IPHS 41% AMSG 21% RDK 29% PRGO 21% MCY 24% BOH 15%
It was a very ugly day for the stock market today but I have to admit that me and my subscribers were very happy as not only did 37 of our 39 shorts make money but our two biggest gold positions were up 9% and 3%+ today. So it is safe to say today was a very bullish day for subscribers and all I have to say is that IT USED TO ALWAYS BE LIKE THIS from 1996-2007. Only recently has things been turned upside down and even then our shorts are doing WONDERFUL proving that the trend will FOREVER be your BEST friend.
The one problem I have had with the downtrend is that unlike the 1997 pullback, 1998 pullback, or the 2000-2002 bear market, this is the first time (besides the March to May period in 2008 which was lame!!) where I have seen the market go so long without rewarding momentum/growth investors with at least a few "hot" stocks where they buck the major downtrend (like CRUS in 2000 or GNSS in 2001--both tech related). This downturn has been so harsh and has hit the whole macro-economy that NO stock is avoiding the downturn. There are a few but compared to any other year I have been doing this it is PATHETIC! Luckily, right now, stem-cell, pasta, and gold all have some momentum and these areas could still make us money if the market doesn't breakdown too much more. However, if the market falls apart, you can kiss these speculative leaders (stem cells) and real leaders (gold) goodnight.
It is possible gold, silver, and platinum stocks can do well. However, I think we need to have some better counter-trend rallies to really get any upside momentum that will allow us to make the 100%+ gains that I was used to getting before 2008 hit us. Gold, silver, and platinum might do well if the world doesn't feel safe buying our debt anymore but the actual stocks on the exchange will still be at the whims of the buyers (demand) and sellers (supply) forces of the market. Gold will replace the Dollar in some countries holdings as they diversify but I doubt those same countries will buy AEM, NEM, GG, ABX, or GOLD instead of the actual bullion.
This is why I think it is safe to buy Gold, Silver, and Platinum on pullbacks but NOT the stocks that are involved in those markets. They are still STOCKS and, since weak holders and small money goes into stocks more than futures, they are at the mercy of supply and demand imbalances caused by a fund liquidating or a big investor jumping ship. In the Gold market, if that investor decides to dump, I am pretty sure, RIGHT NOW, you will not have any problems finding a foreign buyer out there for the Gold. But for NEM or ABX? I doubt it.
Bottom line is this: the market is very ugly and the trend is now down on all four major time-frames that I use. This means that you should either be in cash waiting for the market to turn on volume so you can go long and heavily long on margin if we have leaders break out. Or it means that if you are experienced you should be looking to go short the low volume rallies. Just like we did today on two stocks that freshly broke down from low volume rallies. Take that along with another speculative stock on the long side and you have three new positions for tomorrow which is just as many as we saw TOTAL last week.
Last week we had ONLY 3 shorts. Those three shorts are all three lower than where we went short. Sadly one did swing us out of it with a TINY ITTY BITTY loss but NOW it is working. The other two are working really well and now even if they reverse we will be leaving with profits. The most important thing is that LAST WEEK I did not issue A SINGLE NEW LONG. By doing that I saved you from today's major collapse. Not only did I save you from today's major collapse by not getting you long but you made money by being short the recent short positions I have given out (with all my long-term winners posted below). The best part today, however, was seeing our longs net-up today with our two gold stocks (my two biggest long positions) having VERY bullish sessions today. So not only can we get it right on the short side, but as you can see (and how it was for over 10 years), even when it is a nasty day, we can get it right on the long side too.
Have a great Wednesday everyone. I will see you after the bell, on this .net site, tomorrow! Aloha! top longs/(shorts) with their total returns MAKING ME MONEY TODAY: ANCI 57% (CEDC 80% CETV 90% CEO 30% IPHS 38% RIMM 55% GGB 58% MOS 54% OKE 40% AAPL 41% CPRT 27% MCY 22% LLL 19% SDA 77% PG 21% CASY 28% PRGO 20% PLCE 28% K 19% ARB 71% APD 44% AMSG 20% AMX 48% CYT 66% SPG 57% TITN 52% POT 51%)
A very volatile week comes to an end with the markets losing anywhere from .5% to 1% on the day. The good news about this pullback was that it did come on lower volume. But it is possible that could have been a function of a long-weekend. The bottom line is that the week ends on a weak note and stocks finished lower on the week anywhere from 3.6% to 5.2%.
Overall the theme of this week was volatility and uncertainty. Even though there were two quiet day this week, there were three very loud days that showed the market is still not a rational animal right now and is instead a wild scared beast that reacts on a whim to any and all news deemed relevant to short-term traders at the time.
Sadly, almost all form of momentum investing (besides staying short) is working on the long side. Every time we seem to have some leaders start to show up that could lead the market in a new direction they get hit. The most recent example is the Education stocks that got whacked on Thursday after STRA came out and disappointed.
The good news for us is that we can get short these stocks as they fail at resistance on higher volume and begin to rollover. The bad news for us is that it means that the market is still not going to be moving higher for any of us to get rich or wealthy from capital gains anytime soon. About the only good news out of that is that after enough failures people will come to expect it and then the leaders will work.
That might be the case now as Mining-Gold/Silver stocks are not only #1 but have hit #1 BEFORE most of the stocks in this sector has setup and broken out with their price above the 50 day moving average with the 50 DMA above the 200 DMA. This is one of the first groups in a while that I can remember setting up in bullish charts before ALREADY having a major previous run-up. This is why this group feels stronger than past leading sectors.
Now while that may not be good for the market it could very well be very good for us that are long Gold in our IRA and have gold stocks that we have locked on our radar screens ready to go heavily long if those magical beautiful setups occur.
Basically what I have been seeing in leaders are that PAST leaders breakdown that are currently at the top of the list for past six-month and twelve-month performances thus leaving a group that has already been going up for a while and still moving up as the #1 group. This isn't by strength but by default of being the strongest WEAKEST. That is why after these groups are becoming #1 we have been seeing them crack and break not too much long after.
I mean if we just look at the recent top sectors we had security stocks, medical stocks, and recently education stocks that have all failed after becoming the new leaders because they were already in LONG-TERM (going back to 2000 or 2003) major uptrends. They were not anything new.
Now at the same end everyone can say well Gold isn't new either, Einstein! However, a lot of the charts that are setting up in proper bases are longs that have not had a major run yet that are still very fresh and could still have a long way to go especially with the conditions of the world economy the way it is. The old gold stock leaders are not really "leading" this time around (gold stocks helped lead in 2005 and Gold has been moving higher since 9/11). Instead there are plenty of "fresh and nice" charts.
I am still praying that the IYW is hinting at technology turning because time-after-time big bull markets are started and led by the technology sector because this is OBVIOUSLY where innovative and exciting companies are coming from. That is unless they make an amazing energy drink like HANS! Then they can grow 9,250% in four years. But the real money is made in technology stocks that are major innovators like CSCO which grew 60,000% in a little over 9 years. TASR also moved 2,390% for me in nine months. So as you can see, no matter if it is an electricity gun, a router, or an energy drink, if it is new...it can make you a LOT OF MONEY if the company is being run correctly! This is why CANSLIM rocks!! You can always find these stocks by researching and using Investor's Business Daily products (and no I am NOT paid by IBD; the tools are just that great!).
I want to wish everyone a very happy Valentine's Day and have a great 3-day weekend/President's Day! ALOOOOOHA!!
top longs/(shorts) with their total returns since my first purchase MAKING ME MONEY TODAY: ANCI 57% (OKE 36% POT 46% AAPL 38% PG 19% AMX 46% MOS 50% AMSG 17% PRGO 19% APD 41% CYT 64% CASY 27% ARB 70% RDK 29% IPHS 31% RIMM 51% MCY 22% CETV 89% SPG 53%)
Today was basically a day of slow steady selling until the final hour hit. That is when a major rally pushed the indexes higher to close near the HOD with volume higher than the session before. It was quite obvious the Nasdaq led with the volume compared to the NYSE. However, sadly, leading stocks did not participate like you would like to see as the IBD 85-85 finished off 2%.
As a natural bull by heart and forced bear due to the ugly market action, I still must admit it has been nice to see the market stabilize the last two days instead of crack wide open like it acted like it was going to do. It seemed like this market was ready to break wide open as less and less stocks looked good. The good news comes via the past two days as some stocks avoided the major selloff three days ago and still have decent charts. I have posted these in the new longs area. Let's hope soon we can go long some of these charts off of nice chart patterns.
However, if they don't setup and instead the market breaks down, I am sure that Gold and Silver stocks and the commodities will continue to do well. We are already long one nice gold stock and have many other on our watchlist but that can only be gained by going on the Silver or Gold areas.
If the market does rally and the volume continues to come below average of the last 50 days I would be more inclined to look to short the rally than get long. If the rally comes with volume and max green BOP charts and CANSLIM quality stocks setup then BOOM we go long. However, if these charts and stocks do not show up and instead low volume rallies throw stocks right to their key resistance levels I will have no problem going short.
Today was very bullish but volume was not huge enough and leading stocks did not participate. So really it wasn't as wonderful as it seemed. Still it is nice to see the market acting well here. But the fact I have 39 shorts and only 10 longs does not give me confidence a new bull market is around the corner. Either way those shorts have made us a lot of money already and I would have no problem getting rid of them, turning around, and getting more long. At the same time I have no problem going more short, if the market turns down. And what if the market continues to go sideways? Well, I am a very patient man and that is why I did NOT miss 2003 while SO MANY walked away from 2000-2002.
Leaders are made during hard times; not good. Aloha everyone and I will see you in our busier and busier chat room. Aloha!! Make sure you watch the video below to know everything you need to know about the market. My commentaries are going to be shorter because my subscribers believe I give out too much for free. I am going to respect their wishes. You still have enough information here to safely navigate the market to safe profits. Remember, cash is STILL KING with gold being the queen. Aloha!
Today was a happy day for those of us that did not want to see the market crack wide open. While I may not have a care of which way the market is moving, I will admit that it is always more fun on the long side. Why? Because you can make as much as you want on the long side as long as the stock is moving up but on the short side you can only make 99.99%. So it should be obvious why it is more fun. Plus it is always more pleasant to look at a lot of green on a chart instead of red.
Today's action was tight action and indicated to me a market that may want to be a little rational and hold some semblance of itself instead of cracking wide open and deteriorating quickly. Whatever the market decides to do, I guess it doesn't really matter to those of us going long or short the stocks I have been going short or long.
It seems at first when the market was going nowhere after November that nothing was working on the short or long side. However, as this sideways market has moved along we have seen both our longs and shorts work. Now, of course, we have our fair share of cut losses, but still we have longs like Axxx, Ixx, ANCI, Jxxx, and Lxxx that still look very solid and look like they continue to provide us with gains. However, at the same time we had four stocks now up over 40% show up in our shorts making money, we had two stocks with 50% gains, we had one stock with a 77% gain after today session. So obviously, most stocks we touch are working.
What is not working, honestly, is this market. The market is caught in one big long sideways congestion and while the longer trend is down and the short term trend changes from up to down faster than John Kerry changed positions in 2004 it is still overall going a big nowhere. That is why you can not find ANY "leading" stock with a gain of over 500% since January 2008 besides EBS. That is normally not normal for the market. But clearly things are changing. The great news is that change is always occurring so eventually you change back. It just takes time, especially after a MAJOR housing bubble burst. Just ask the Japanese how their economy has done from 1990 to now.
I don't have much time tonight but I have to say that I am getting very anxious and salivating for a max green BOP loaded, huge accumulation, nice tight price pattern, and a strong breakout on huge volume to show up so that I can go long something in "bulk" and make a lot of money. I am honestly getting a little sick (but what can you do? NOTHING! Unless you want to lose money) of taking small losses with a litter bigger gains for the past year. I do GREATLY miss the years of 1998, 1999, and 2003 VERY MUCH. I even miss the years of 2004-2007. LOL. I know a new bull market will start again with a new round of leaders however I don't have a ton of confidence we will see it any time soon.
One market that is definitely bullish is a market I have been pushing hard on my Platinum members recently. I have been a Gold fan for a little while now (2-3 months since the move back over the averages) and have noticed Gold Mining stocks setting up in nice patterns with one chart really setting up in a potential "hot, beautiful, and wonderful" price, volume, and BOP pattern. This stock also has some excellent fundamentals. So now a five to seven week base MUST form and then a breakout or bounce off the 50 day moving average with strong volume and max green BOP will be my signal to go strongly long.
I have not gone heavily long a stock since AFSI in 2007 and the biggest position since 2005 has been HRZ in 2006 (20% of my account). This is a function of too many stocks going up due to not enough pullbacks in the market. Had I had less stocks moving higher maybe HRZ would have been 33% to 50%. No matter. The point is if this certain stocks move 5 to 7 weeks and breaks out, with huge volume, and max green BOP, I will finally be able to have a large long. It's been a long time.
Don't worry about the fear monger that say the world is going to end tomorrow. You can be sure we are in the "season" of the final hour but I doubt we are at the "final" hour. So continue to play the trend up and down and make as much money as you can for you future children because God knows our government is about ready to screw them and strip them at the same time. Just take a look at any Dollar chart to debt, borrowing, or printing. This is why Gold, Silver, and Platinum is moving. Would you rather be long a substance that we know can't be found just anywhere or would you rather be long a piece of paper that I can print to my heart's content. Think about for the long-term. It might make the difference between survival or failure.
For now, I will continue my operation in the market until the longs produce those HUGE GAINS like 98,99, and 03 did. I am patient. Are you? I sure hope so. Because even if you aren't, I have saved you a TON OF MONEY in 2008. All of those that listened to me are now thanking me and all I have to say to everyone is THANK YOU FROM THE BOTTOM OF MY HEART. I am very thankful for the kind emails, PM's, and kudo's I have received from chat members and others. However, I don't mind you busting my chops if I do something you don't like. Keep me informed. I know I seem "rough around the edges" but I am a very busy person. I still love and care about everyone that entrust me to help them TAKE FULL CONTROL OF THEIR OWN PERSONAL WEALTH. Freedom baby. That is all I ask for...freedom. Freedom of choice. Freedom to be long a bull market. Freedom to be short a bear market. Freedom. It's a beautiful word. Almost as beautiful as those max green BOP, huge accumulation, cup with handle charts with powerful breakouts. ;)
Aloha everyone. Have a great Thursday and I will be back on Friday. Aloha.
Sorry everyone our high-tech security worked too well last night and registered my IP addresses as spam so I was unable to complete everything in the manner that I like to do it to give you the best analysis and not some fly-off-the-wall emotional report. However, it backfired last night and I (and a couple of people) were red flagged by our ISP and we had to fix this issue. What is funny is that we went almost the entire year in 2008 without a single glitch. 2007 had a few. But we have had two in two weeks. Both problems have been fixed but when dealing with the internet there always seems to be something odd. I didn’t think I would need another backup connection but I am going to get one anyway. That will leave me with 3 ways to connect the net and unless I am blocked by them all I can’t see the problem last night happening again. If you missed the video here it is below. I might not have time to write commentary tonight for the Wedensday session but will have time for another video. So enjoy yesterday’s video if you missed it and I will be back with today’s roundup for Thursday’s market.
Stocks ended the week with a little bang as the Nasdaq went out with a 2.9% close, the NYSE had a 2.8% close, the DJIA had a 2.7% close, and the SP 600 led the way with a very impressive 3.6% move. There were two slight "bummers" to today's rally. The first was that volume came in lower than the day before. But, honestly, the volume difference isn't enough to have an argument over it. It was basically the same as the day before just slightly lower. The more important problem was that for the second day in-a-row, even with small-cap stocks doing relatively well, the IBD 85-85 lagged the general market with only a 0.3% gain today. Add that .3% to the SP-600 3.6% and Thursday's IBD 85-85's gain of 1.1% which lagged the Nasdaq's 2.1% gain and the SP-600's 1.4% gain and you have leading stocks not leading this rally.
Why is this bad? It is only bad, for now, because new LASTING stock market rallies need leading stocks to be leading the market higher for the market to sustain a long-lasting rally. Do we have leading stocks leading the way higher? Yes. Gold, Security, Medical, Stem Cells, Software-Medical, Education, Food, Utility, Telecom-Wireless Equipment, and Retail/Wholesale groups and their leading stocks are moving higher. This is the first time since the August to October 2007 small rally where leading stocks actually have gone up with the market. The entire year of 2008 was just a changing of guard at the top constantly from one new leader breaking down to the next. While that has set us up in a better market has that put us in the clear? The answer is not yet.
Why? If we were in the clear, the groups that I mentioned earlier would not be filled with what are considered as "boring" groups during this upturn. Instead, besides stem-cells, we would have many more innovative and technology driven groups. However, facts are facts and groups like Banks, Retail, Transportation, and Homebuilders did better than the new leading groups. This tells me, just like yesterday, that we are still in a rally where vultures are definitely out there trying to pick the dead carcasses off the road of the laggard stocks.
When you look at the simple ETFs of the most beaten up sectors you can see how they are leading. XLF the financial ETF was up 7.6%, XHB the homebuilder ETF was up 7%, and XRT the retail ETF was up 4.3% on Friday. So it is clear to see the two most beaten up sectors, which are banks and homes, are once-again, so far, leading us higher and this tells us that a new bull market is probably not going to start here with these laggards leading.
There is, for the first time, like I mentioned earlier, some great news in that leading stocks in leading sectors are finally moving higher with the market during the pullbacks and rallies. This is the first time this has happened in the market since August 2007 to October 2007 when stocks like APPY DRYS and FSLR put in strong gains for us in short amounts of time. So obviously there is something bullish that could turn out for this rally. Sadly we are missing something that we DID HAVE in 2002 while we were bottoming. Those were hot charts! Even though we have a lot of nice charts the amount of perfect charts shows that this is probably not a bottom. "Bottom" line is that we should have charts like GERN with a lot of max green BOP, heavy volume surges, and a nice flat perfect price action setup like it is currently going through. When max green "hotties" like this start to show up in my scans as we rally higher I will then get more and more bullish. But for now I have to take it easy.
Conditions could be right for those type of stocks to setup soon as most traders and investors are starting to lose their faith in a market rally. I have heard a friend recently say "the next rally I see I am shorting the pants out of it." I think that since people I know that barely know how to invest are now making comments like this, it is safe to say that maybe shorting isn't the safest play RIGHT NOW. A lower volume rally on this rally attempt to the 200 day moving average might make some stocks worth a short play.
But right now the market's movement is clearly mixed with the long-term trend down with the market down over 43%, the intermediate term is down with the market down over 38%, the sub-intermediate term is FLAT FLAT FLAT with the market going nowhere from 10/23/08 to 2/6/09 on the Nasdaq as it has returned a dead -0.76% during that time (zzzzzzzzzzzzzz...), and the NYSE has had the same luck with a +0.88% return from 10/24/08 to now. So obviously over the past few months it has been pretty boring as the market has basically gone nowhere. Short-term the trend is now up for me and not sideways thanks to the last two-days.
I want to remind everyone also that you do not need to buy the exact bottom of this low if you think a new bull market is ready to be unleashed. If you go back and study my best longs from 2003, 2004, 2005, 2006, and 2007 I think it becomes OBVIOUSLY CLEAR that you NEVER have to buy the exact bottom of the stock market to come out a huge winner. Just ask everyone that bought TASR in July of 2003 which was nine months past the 2002 lows and then after the July buy made a near 3,000% gain in nine months.
Knowing history and how the greatest stocks work can greatly help you relax and stay calm when everyone is running around like a chicken with its head cut off. There sure are a lot of wild and crazy traders that really think they need to know the future to make big money. The best investors/traders that I have met in my life are NEVER worried about the future. They are only prepared for it. They are prepared for a bull market, a bear market, or a range-bound market. The best are never off with their market calls. Why? They never make calls. They just move with the trend. Just like the best new market students do.
Since I have not gone over the stats for the week I think I should do that now to revisit the fact that we simply do not have leading stocks blasting away higher. While these are necessary, like I said, for long lasting bull markets. Heck, if you are happy with just a few months of a rally right now then things will be fine. But when the week ends out with the Nasdaq up 7.8%!, the SP 600 up 5.9%, the NYSE up 5.4%, the SP 500 up 5.2%. But the DJIA only came in with a weak 3.5%. So if the DJIA was weak you would think small-caps would be strong...and they were up 5.9%. However, in a shocking development, even though nice charts started showing up in my scans, the IBD 85-85 kept lagging only rising 1.2% on Thursday when everyone else was up 1.6% to 2.1% then on Friday it was only up .3% on a day when the indexes were up 2.7% to 3.6% on Friday. These lame returns are just a hint that those nice leading stocks are going to either not lead us up and then fail and help lead us down to new lows or else they are going to have to reverse their lagging status and become leading stocks.
Only when leading stocks like the IBD 100 and IBD 85-85 are leading the overall market higher can you be completely confident that the rally attempt is not just an attempt but is in fact a start of something new. The other KEY important development that must occur is for "hot" charts like SINA, SOHU, NTES, USNA, GRMN, and UNTD show up in those green BOP to max green BOP charts loaded with accumulation. During the 2002 lows they were looking good and were leading industries at the top of the list of IBD's leading industry growth. Now we have leading industries with charts that are lame. Some do look good like Gold and Education stocks. However, a lot of Gold stocks are not yet showing massive accumulation with max green BOP and huge accumulation. However, with them rising to the top of the charts and with a few showing these very nice chart patterns it appears soon Gold will move.
Not only is Gold moving but Education stocks are too. I am long a recent education stock but do not have more do to the fact that the charts are not LOADED with green to max green BOP right now.
Well I have gone very long in my analysis for tonight and would like to continue with this tomorrow. I am sleepy and have loaded this area with information. Great luck this coming week and if you need any extra help that is what the subscriber longs and shorts pages, videos, forums, and chat room are for! Have a wonderful Monday. I will see you here after the Monday stock market session.
Some other key points that I don't have time to go over but want to post before the market opens includes:
--Futures not looking good in the AM. But remember futures don't usually matter because most of the time if futures are green you get a red close and when futures are red you get a green close.
--Shanghai Composite is the only index up with a 2%+ gain at my last look. If you look at the Chinese Hang Seng and Se Composite you can see the market is rounding out and moving higher on strong volume. The leading innovative fundamentally strong stocks in that market are going to make their investors very wealthy.
--I still believe that since the amazing accumulation that I have seen in Gold, Silver, and Platinum since September that there is some amazing long-term accumulation in these metals going on. Therefore, any bounce off the key 50 and 200 DMA (or even the 21 DMA) or even breakout to new recent highs above key resistance levels.
--some leading stocks to watch that were mentioned in IBD that I don't like but we'll see they are acting in a few week to months include SQM RDM SYT TNDM UPS FDX AAWW. I only don't like them because their charts are jacked a little. RGLD would be great to get long soon!
--IBD called this a FTD on 1/28. I called it a "technical" one but it was so ugly I said it would fail. I was right and it did fail. However, on Thursday we had a FTD on the fourth day of the recent rally attempt from the 1/30 short-term lows. The higher lows combined with the big day on Thursday coming on day four of that rally attempt gives me a sign (since CANSLIM stocks are moving up; HOT, pretty, maxed out green, and sexy beautiful stocks are not though) that this rally could have some legs. And we need a rally not only to make money now but to either have it turn into a real bull to make some 200% to 1500% to maybe 2400% gains again or to rally on low volume back to the 200 DMA so we cant get short the past laggard stocks that are now back near their recent 52-week highs. Eiher way a rally here is good. Good for the bulls now and good for the long term bears later.
--There were 3 clearly bullish reversals this week in the stock market. Study 2/2, 2/3, and 2/5 to see how a market should be acting if it has good news possibly coming.
--put/call is .71 signaling the option market players are complacent/bullish
--Investors Intelligence shows 35.2% bulls to 36.3% bears. So it is neither bullish or bearish.
--despite the impressive Friday gains there were still ONLY 10 new 52-week highs compared to 67 52-WEEK LOWS.
--YTD the Nassy is up .93%, the SP 500 is -3.8%, the NYSE is -4.9%, and sadly the IBD 85-85 is -5%. The good news is that I am beating the overall markets with a LAME (this is what happens in dead markets that go nowhere since October) 2% gain thanks to my recent longs and all those profits I took on shorts this year. I don't have a lot of shorts (37 total but 37 SMALL positions) and my 10 longs (10 longs 10 small positions but dollar average is the same as shorts) aren't that huge. So that must mean...
--CASH IS STILL KING!!
--don't fool yourself. This is one of the MOST DIFFICULT markets ever. The beautiful or nice chart setups I saw ALMOST ALL the time from the age of 16 in 1996 to 2006 were like golden tickets. Then in 2007 it got much harder as stocks like AFSI, TESO, APPY worked but stocks like FALC and INXI really fooled us with their SUPER HOT and AMAZING green to max green BOP filled charts. They failed and thus the pattern on those hotties failing more to working started. It seems to be coming back but there are not enough of the charts I like to see with strong enough fundamentals to get me excited here.
--I will need to continue to see volume and hotter charts on the rally or else I will look to be going short the rally with a heavy volume failure at the 200 day moving average. For now, I feel a lot better about the stock markets chance to rally. But still I need better charts to believe it can stay.
ALOHA!!!
Top longs/(shorts) with total returns MAKING ME MONEY on Friday: ANCI 55% (OKE 36% LLL 16%)
FREE YOUTUBE VIDEO:
GOLD AND PLATINUM MEMBERS YOU CAN FIND VIDEO ONE, VIDEO TWO (15 MINS), AND VIDEO THREE (22 MINS) IN THE GOLD FORUMS. MAHALO!
FROM THURSDAY FOR FRIDAY'S MARKET; THIS WEEKEND WILL BE POSTED HERE ON SUNDAY:
I GOT EVERYTHING DONE THAT I DO EVERY NIGHT TONIGHT, DESPITE THE PROBLEMS WE ENCOUNTERED TODAY. SUBSCRIBERS YOU WILL FIND EVERYTHING IN THE FORUMS AND WEBSITE IS COMPLETELY UPDATED, INCLUDING BOTH VERY IMPORTANT DAILY VIDEOS.
Today's market session was a great day overall for the indexes as stocks gained from 1.5% to 2% today on higher volume than the day before and with volume above the 50 day volume average. Now before we can get too excited we have to check out leading stocks and see if there are any "hot" stocks setting up.
Well, surprisingly, I do see some CANSLIM stocks rounding out possible bottoms and bear market leaders like Gold, Medical, Biotech, Education Stocks, Commercial services-security, Software-medical, and some select Utility stocks. While it is nice to see some leadership in industries with stocks moving higher allowing some to setup in bases, it would be much nicer if high tech stocks that dealt with nano dust, artificial intelligence, microchips, new weapon technology, and green technology would be leading as they are the "innovative" fields. But I guess with Stemcell stocks moving we do have some speculative action and that is always a good thing for stocks.
Another good thing is after having a beyond DRY IPO period after September with only one stock coming out (LOPE) we finally have some stocks priced and ready to go on the market. About five stocks with one security stock is ready to finally play along. The fact that some companies are coming to market and that the banks are letting them indicate they must see some sort of future financial rally. OR POSSIBLY, just like in 2000!!!, they are trying to ditch the best of the worst before the market hits the crapper. However, I think that last round of IPOs were the bad ones and now we are dealing with higher quality.
Let's hope that the last piece of the puzzle can fit in with all of this. What is that? My hot charts like the longs I have posted in my 'past big winners' section under the longs/shorts on my .com site. There are very few stocks with perfect setups. But there are some stocks that are starting to setup in pretty bases that could turn into something "hot, perfect, or beautiful."
So right now, as I see, due to these conditions, I still believe if we rally here we will have just a bear market rally in a longer-term downtrend. The 200-day moving averages will probably end up being great areas to short.
However, I would love the market to just take off here on huge volume, thus creating some hot charts with some CANSLIM charts. Then I would like to see the market pullback and have all these charts setup in beautiful bases and then have them breakout with volume surges and max green BOP everywhere. Just like in 1991, 1995, 1998, 1999, and 2003 (check your Nasdaq monthly charts to check this data out for yourself so you know what the market trend will look like when these hotties occur). I am a positive man.
But if that scenario doesn't happen, I am ready to take my shorts to the area that CETV hit for us today. Today CETV hit the 90% gain mark for a short in a little over 6 or 7 months. This is exactly how I want EVERY short I take to act. I expect the best and prepare for the worst, always.
If this market decides to go up, I will ride it with my longs. If it then fails, I will re-add to my shorts and let my current shorts ride the move lower. If the market just keeps rallying well then we will keep making a LOT MORE MONEY than we are now in this "go-nowhere-market."
Well everyone, we had a long downtime due to my videos being SO BIG. Next time the videos will be on a separate server of ours that will allow us to come up quickly. I don't think we had any security breaches. It was simply a server overload due to too many files. I have to learn to keep my mouth shut more when I make these videos. I should be able to do them in six minutes. Let's see if I can do that tomorrow.
Aloha and great luck everyone. I will see all my friends in the chat room tomorrow. Let's make some real money and not "mad money" or is it "losing money?" Whatever.
PS: Can you believe I got everything done like I promised? I hope my videos don't bring down the site tonight! He he!! Have a wonderful day and watch out for the volume on CNBC. It is a MUCH BETTER channel on MUTE during the day. It will help you do more important research on sites like Investors.com (IBD) and read important stories throughout the day on news items related to the market to pick up on trends. There is too many conflicting opinions that will leave you more confused than confident. You want confidence, do your own work and learn it the right way--the CANSLIM way.
It was another excellent busy night in the chat room and that has left me running late on my commentary post again. However, like always I am here now and can prepare for tomorrow's session.
Subscribers already know that we have two new shorts which indicates the market wants to go lower in the short-term now, instead of higher since I do not have any new longs. The odd thing however is that both my longs (10 of them) and my shorts (40 of them) are both making money. Only a few are giving me full sells and full cover signals.
This hints to me that it is a stock pickers market still and not just the kind of market anyone and everyone can just buy blindly. And when it comes to buying blindly sometimes I believe that is what the majority of people do that do not use technical analysis with their fundamental analysis or whatever it is that they think they are doing. A stock pickers market is never a kind of market that you can get filthy wealthy in. Instead it is a market where we can really try to separate yourself from the rest of the pack as the market just moves sideways. Which is what it has done since October 27, 2008. I believe we have moved .61% on the Nasdaq which indicates that we are flat-lining.
The good news is that despite the back and forth action the market does have the feel that it wants to get moving. At first I thought it was down but with the market failing to rollover and instead hold in there I decided that maybe it could be our bear market rally's time to come out and do some dance moves. However, every time the market appears to be ready to go, it pulls back a bit. The only difference as we go along is that both my shorts and longs are working. Earlier my shorts would work and my longs would fail. Now the longs appear to be holding in there.
Not only our my longs doing well but the leading industry Education stocks are doing well. Even though I do not have any long I would not have a problem with anyone going long these stocks on low volume pullbacks to their 50 day moving averages. Just make sure you buy a leader and not a laggard.
Right now, the market is still stuck around the 50 day moving average and if it continues to be like this you are not going to see much change from my market analysis. Subscribers can follow the new longs and new shorts and make money while everyone else just gets whipsawed to death. The best thing during all of this is that we have a potential "hot, perfect, nice, pretty" setting up. It is not nearly finished yet but if it does setup and finish like it is starting I believe we could finally have a moment to make money. Subscribers know what it is but I am not talking about it here.
Anyways, please watch the videos to keep up on the action and I want all Platinum and Gold members to remember that video two and sometimes a video three are always available on the Gold Forums before the first video is posted here the majority of the time. On my videos, I am now not only going over the longs and shorts in our scans every night but I am also showing you the new longs and new shorts and the reasons for the new longs and new shorts in the video format. This along with the longs and shorts website page on the .com site should completely get you into my mind of what I am seeing and looking for when I take a position. I also go over the sells and covers so that you may understand why we are either booking profits or cutting our losses fast.
Great luck to everyone out there and I will see you tomorrow in the chat room! Aloha!!
top shorts with their total returns MAKING ME MONEY today: ARB 70% SDA 76% TITN 49% PLCE 34% IPHS 28% PG 17% OKE 34% CASY 24% RDK 27% SBAC 38%
Stocks sold off heavily Friday finally following-through to the downside after a previous down session. There have been a few times this month that the market looked like it wanted to breakdown hard. However, it was always followed by support from oversold laggards that remained up while C and BAC failed previous supports. However, the lack of leaders in the current rally attempt is finally giving way to a weak market and that is why I have been saying to either quickly take your gains on longs or better yet to safely stay in cash, during this past rally.
The biggest problem I have had the entire rally attempt off the November lows is that leading stocks with leading fundamentals in leading industries were not leading the market higher. Instead it was oversold laggards that have had the living life beaten out of them. The fact that these laggards led the way higher was my clue to tread carefully in this market and not get too excited about a possible rally holding any time soon.
Instead it is the shorts that have continued to hold up (err...down) while this low-volume rally went on the past few months. Well it really wasn't even a rally as the market has gone no where the past three months. Instead, while the market went nowhere, stocks broke down from nice patterns and current shorts continued to trend barely higher on low volume. This was the clearest "tell" that bears were still right, even in the short uptrend and that longs were at best "hopeful" that the rally could last longer than it appears that it is.
The only difficult part about the market right now, for me, is finding anything new to talk about that I have not already gone over thousands of times. Especially, for my subscribers. Anyone reading this that is not a subscriber is obviously only getting around 5% of what this whole website offers in regards to information. Even with this information in hand, you would have known the market topped in October of 2007, to have sold all your mutual funds by November of 2007, and to have been HEAVILY LONG CASH the entire year of 2008 if you were a new investor. I did not tell you once to buy the "bottom" of any of these false rallies and have told experienced investors to go short.
While the last year was a very mixed year between shorts working and shorts not working, the shorts that have worked have worked very well as you can see in the recent update yesterday of my current shorts. I don't expect for those shorts to be losing too many of those gains and do expect them to make more. Especially if the GDP continues to get worse. Remember, everyone, as goes the trend of a nation's GDP so goes the trend of the stock market. Don't believe me? Look it up yourself on Google. :)
The market has been very tough even for the most serious and experienced professional and the great news is that if you survived the 2008 stock market then there is no reason you should not be prepared for the 2009 market. We all know the market looks bad, the US Dollar looks good, Gold Silver and Platinum look good, and that is all you need to know.
Now when it comes to timing those buys, with my past track record, there is no way I can just give those out. However, I think it is safe to say that for everyone a little worried about their retirement funds I wouldn't hesitate to go out there and put SOME of your funds in Gold, Silver, and Platinum if you can. I know it sounds like a bandwagon play but the commodities are re-entering another uptrend and gold looks like it is ready to breakout to new highs. Along with that a lot of Gold stocks are setting up in very bullish chart patterns. When those breakout, you can be 100% sure I will not miss the next ERS up 560% in 5 1/2 months.
Please make sure to watch my videos posted the past week. You will see how I did not get suckered into the rally by the "biased" and "self-interest" filled CNBC. Remember, no matter what a guy who was down 40% tells you, using technical analysis the RIGHT way (it is a windsock, not a crystal ball) will always help you make money than BLINDLY buying based off another man's recommendation.
In this world, it is time to take control of YOUR OWN finances. 30 minutes a day with IBD for a couple of years and some training by professionals that do this for a living and have a track record of making money in bull markets and either MAKING MONEY OR SAVING MONEY in bear markets and YOU CAN AND WILL take control of YOUR OWN financial future. You NEVER EVER need to rely on someone else wants you learn how to read the market like me. So please take your time to learn. It will pay off.
Aloha!
Video 1, 2, and 3 on the general market and commodities, our longs and the longs in our scans, and our shorts and the shorts in our scans will be up by Saturday night in the Gold forums for Platinum and Gold subscribers.
There were three new longs and one new short tonight that I really went into detail explaining to my subscribers in the new videos section. I believe they needed to know why these stocks are longs and shorts, how much money they should put in each one, and I also went over the reward/risk ratio aspect of the stocks, making sure they were on point to what I am looking for for a future BIG WINNER. The time I spent with subscribers today going over today's market was a lot of fun but unfortunately I do have a small headache (probably from being on the computer too much) and after all the work I put into the forums, longs, shorts, videos, chat room, and charts I am pretty burned out and am going to skip doing commentary tonight. I don't think I have skipped making one of these in a LONG TIME so I think I deserve a night off. Especially considering the general market is flat-lining the past three months. The free general market video should have enough information in it to have you well prepared for Friday's session.
FREE YOUTUBE VIDEO:
Top shorts with total returns that made me money today: CETV 86% CEDC 77% SDA 77% AAPL 42% POT 51% CPRT 27% RDK 15% LLL 16% SBAC 36% ARB 67% OKE 31% CYT 58% AMX 47% RIMM 44% GGB 57% AMSG 15% CEO 31% PLCE 29% IPHS 26% MOS 58% APD 42% CASY 21% TITN 52% SPG 47%
A weak start to Friday's session had the feeling of a painful day to come. However, the market found its lows near the opening and managed a nice rally most of the day, until the last couple of hours. All indexes were green at one point in the day but a decent pullback that was followed by a little EOD rally kept the DJIA from closing green. Overall it was yet another bullish session preceded by a negative session.
That has been the pattern since last week when the market broke down away from the 50 day moving average on January 14th. Following that break down, stocks bounced back the next two days on higher volume. This was not was supposed to happen according to textbook stock movements.
Normally, when the market breaks away like that from a key moving average and many "attempted leading" stocks have big reversals, you usually do not see a halt in the decline so quickly. So after those two days of prices holding it then appeared that the market might be able to turn and give us the low volume uptrend we are waiting for so we can load up our shorts when the market fails at the 200 day moving average. So no big deal. We have a new plan.
Then on Tuesday, the market tanks on the inauguration. No big deal now we are only back to being in our confirmed downtrend and now we know the Thursday and Friday support was just temporary and not anything important. With Tuesday's breakdown a more shocking situation occurred; we were given seven clear "get short" signals.
With those seven short signals it now is clear to me the market is ready to break down. Right? Wrong. LOL. Instead the market held in there with a stronger volume rally. But a very important data point occurred on this strong up day. What was it? All of my shorts from the day before held in and not a single one gave me a FULL COVER and only one gave us a PART COVER signal. This indicated to me that the short side was still probably the right side.
That was then confirmed on Thursday with the bearish session the market put in, with my new shorts and old shorts going down along for the ride. And on Friday, thanks to a weak open, stocks did not gain much ground and my shorts continued to look like great money making positions. The other good news to go along with our winning shorts, is that on Wednesday, the day after we got seven short signals, we got two new long signals. One long is up over 4% since our purchase and the other one is hanging in with nice price/volume/BOP characteristics. That good news along with one of our long-term (6 1/2 months) shorts hit the 85% gain mark intraday this week makes this an overall great week for me while the market did nothing.
The interesting part about this week to me though was not necessarily the overall stock market. It was some individual sectors that stuck out. For the first time in a long-time, that I can remember, we got some speculative action on a few stocks related to stem-cells. ASTM, STEM, and especially GERN saw some great price action this week as the work on embryonic stem cells get under way. Another exciting group from a leadership standpoint is the education stocks.
The good news about the education stocks, for the bulls, is that some of these stocks are heavily shorted as hedge funds release info about the number of enrollments at these universities being exaggerated or made-up. Well, I hope these shorts have a lot of money, because if big institutions keep buying them like they have recently there will be a lot of short-squeezing that follows. Stocks like ESI, COCO, LOPE, APOL, CECO, DV, CPLA, and others have very bullish chart patterns. But they don't necessarily have buyable patterns. While I am long one leader in this group already, there are at least three other leading stocks I would love to get long if they setup. However, they have to setup. And as long as the rumor mills keep pumping out deadly short stories during a time when the big boys are loading up on these stocks, you know you got some great money that can be made.
The last sector I want to talk about is a sector that I really love not just for when they setup and breakout but for the long-term till-you-die kind of investing. That is gold/silver. For readers that do not subscribe to my site, you might not be familiar with my love of gold. What is sad is that I have not put my money where my mouth is. But back in 2002, shortly after the 9/11 attacks I had a very blunt conversation with a gold dealer on Maui. I told him "to buy as much inventory as you can now because gold is going to be the "US Dollar" of the future." I told this man (Mike X at Kula Gold) that he should buy gold and lock it in the future for this price and short the dollar as the dollar is no longer the "safe currency" it looked like before 9/11. Post-9/11 I told Mike I believe that Gold would go higher in value as more people found safety in it.
Now when I told Mike this I had NO CLUE that our government would be so inept as to actually give tax cuts WHILE INCREASING SPENDING AT THE SAME TIME!!!! Now the Fed is printing Dollars like it is worthless paper and Obama believes he can spend trillions of worthless Dollars to get us out of this mess. I hate to tell everyone this: THIS IS A GLOBAL ECONOMY NOW. The government is spending money like there is still a bull market of 1999 out there. Where are they going to get this money in the future? Companies are moving to Dubai to avoid the HUGE corporation taxes the USA has on OUR OWN businesses. The government keeps raising our taxes so that we can't put our FREE dollars into the market and have people exchange them for the goods and services that THEY choose to use. Instead our hard earned money is confiscated via the income tax and the people that work hard for their money are FORCED (not willingly allowed to donate to who they want, like most great people do) to give their money to some people who will use it to buy heroin and crack (I am from St. Louis--I am not a blind fool!) with the money our government gives them.
Also how can we be giving tax rebates to people who don't even pay taxes???? Has this country lost its freaking mind? Are we controlled by people who want to take all of our wealth??? To me it looks like it and I tell you what I have about had enough! You can tax me on what I want. But to tax me on WHAT I EARN VIA MY HARD WORK and then take the money and use it on things I DONT WANT MY MONEY USED ON is pure THEFT!
So instead of being a slave to the almighty dollar that WILL lose its value more and more LIKE IT ALREADY HAS SINCE WE WENT OFF THE GOLD STANDARD, I am going to do something about it and begin to put SOME (not all--SOME!) of my IRA money into Gold stocks, Gold mutual funds, Gold coins, Gold bullion (I'll pray for this), or Gold ETFs. I am upset I did not do this in 2002 when I first made this gut call and I am even upset for not doing this two weeks ago when I told all my members in my chat room that I would be doing this. However I am going to make my move now. I have plenty of money to actively invest in the stock market to put into stocks like LMLP, HIL, FMDAY, EGHT, TASR, AAPL, IST, AFSI, HRZ, and many other great past winners I have been blessed to be a part of. So a little bit into gold will be worth it just in case Gold goes from 900 to 9000 in the next so many years. That little bit I have will pay off.
I know stocks can go to zero. I know fiat money printed on paper can go to zero, I know even great mutual funds can go bust and go to near zero...but the last time I have checked, gold has NEVER been worthless and even when it was cheap and looked like it was a bad investment it sure looks like a smart one now. :) This isn't 1999 anymore and it never will be again. I just thank God above that I was blessed to have known the CANSLIM system in early 1999 and had my price bounces-breakouts/volume surges/max green BOP charts down by 1998. This allowed me to be fully ready for both 1999 and late-2002, 2003. 1998, 2004, 2005, and 2006 were good years too but nothing was like 99 and 03. I know 1999 can't happen again as that was a BUBBLE beyond any bubble ever seen in the US stock market COMBINED with the Y2K fear and a flood of money from the Fed. But I do know that 2003 markets come all the time when bear markets turn from a bear market to a bull market you will always see charts go from ugly to beautiful as leaders take control of the market. It just takes time.
Make sure you stay patient with this market and even though in the past three months it has basically gone NOWHERE (from 10/27/08 to 1/23/09 the Nasdaq has moved -1.9% and the NYSE has moved -0.02% during the same time). Take a look at those market moves the past three months and tell me that you don't understand why longs or shorts aren't making a ton of money. Well that isn't too difficult to figure out so let me just get it out of the way.
Three out of four stocks follow the general trend of the market. In this downtrend from the October 2007 highs, it has been around four out of five. So obviously it has been very important to follow the market and do what it wants to do. The only bad thing is that some stocks want to breakdown and produce some big gains, it seems like, but they are just holding in that holding pattern that you are in waiting for it to either break lower or give you that FULL COVER signal. Until the stock tells us what to do, you stay in that pattern and wait to make your big money. If a better faster moving stock shows up, don't hesitate in moving the money from the lame-o stock to one that is working on volume.
I think it is fair to say that today was a very wild intraday wild for those that follow the market intraday. The market opened flat on the Nassy and SP 500 but gapped lower for the DJIA setting a negative tone in the AM. That was confirmed as stocks fell, making for an ugly morning, until around noon.
That is when stock roared back and came back to green for the Nassy and SP 500. However, the DJIA was still negative showing its negative divergence. Before the close, sadly for those looking for a bottom, the bulls could not hold on to the gains and the market closed in the red across the board.
While it was not a very bearish session, the damage was still done as the market failed to follow through on yesterday's gains just like on Monday when it failed the attempted reversal on Thursday and Friday. This is not the action that you normally would like to see in a market possibly putting in a low. Instead this is the action of a market ready to continue on its way lower. How can we judge what the markets next move will be? Well we can do that by looking at the index action and current stocks.
If we do that we can see that the market attempted a rally from the November lows that took most indexes up between 20% and 30%. However, this rally came without something that we have seen in most bear market rallies. That is a leading group setting up and breaking out of a hot chart pattern in a few stocks. Sadly, this last rally was full of ONLY stocks that were pulverized in the 2008 downtrend. Any stock down 75%+ from their 2007/2008 highs seemed to get a nice bid during the bounce. Since these lame stocks bounced and leading stocks, at the time, did not do well, it was clear that this bounce would fail faster than the length of time that it would work upward.
That was proven in early January when all of a sudden I had some newly crowned "wise" investors lose their wise heads and start complaining that they felt bad being left out of a rally their friends were in. Then when I find out more I learn that those same friends hooting and hollaring about the rally are the same investors that bought C, BAC, BSC, and LEH all the way down buying the bargains one dollar lower each time. Of course, these guys are going to brag on a small rally!!! They need you to get excited about this market so that they can get you to help bid their stock up. Sadly you can't do that but they like to believe you can.
In a good bear bounce, the IBD 100 and IBD 85-85 will lead the market higher on a % gain basis and should have heavier volume than the 50 day volume aveage. If this is the case, you can normally find a few CANSLIM quality long setups with proper characteristics and then you can sometimes find some "hot and pretty" charts with perfect BOP/volume/price setups in leading sectors. When you see this, yet see low volume on the market general indexes, then you know you have a good bounce. However, without these nice setups, like August to October 2007, we are not going to find APPY "hot and pretty" charts or DRYS "perfect CANSLIM setups" that return 100% in a couple of months. So make sure you check the stock quality during a bear market bounce.
Now, if your rally is coming after a very low volume market downtrend, you can see some max green BOP bases in nice tight price patterns setting up, with some of those having strong CANSLIM traits, you can see some CANSLIM charts setting up and breaking out, and the general market uptrend is coming on higher volume on the follow-through day and the days following, you know you have a bullish market setup showing up. If this beautiful setup happens and more and more green to max green BOP filled charts setup with great price and volume traits get ready to get 100% or 200% to 400% invested on margin if you have it.
Right now, going that long isn't going to happen, but every subscriber should understand that after we were handed seven new short positions we did not have to give A SINGLE ON back up yesterday. That followed by today's turn lower has all seven of our shorts in profitable positions to go along with our other 35 shorts. This should be the time to make big money on the shorts side or else we will have to engage in a major short covering campaign to avoid losses. So where we are at right now we can make good money on our 10% (to possibly 20% for some of you) shorts or we can get out fast and keep our losses EXTREMELY SMALL by getting out of dodge if we are wrong. And if that happens our longs will be there to make up for that side. But hopefully, if everything works out right, we are about to make some major profits in some to all of our shorts. After that, we can then get our "pretty and hot" setups to get very long and make some big money on those longs and our current few.
Stay positive, remember FOR NOW cash is KING!, and a new dawn will come where we can go fully margined long and make big money. Until this happens, let's profit as best as we can on the short uptrends and big downtrends. Stay flexible, stay cash heavy, and stay ready! We can all do this!
VIDEO ONE, TWO, AND THREE AVAILABLE IN THE GOLD FORUMS FOR GOLD AND PLATINUM SUBSCRIBERS.
Stocks put in a very nice intraday reversal off the lows today that sent all the indexes roaring toward their HOD as most indexes only closed just a tad off the HOD level. Volume also came in heavier on both exchanges giving some hope to bulls that another breakdown might get some support.
However, if you remember just a few days ago, we had the almost exact situation. Last week, on Wednesday it looked like the market was ready to crack wide open and go to new lows. But on Thursday and Friday, the general market indexes managed to contain the downside and actually closed in the green on higher volume. That seemed all right and well until Tuesday.
On Tuesday, the stock market cracked opened again on mixed volume with a lot of stocks that were holding up finally breaking down. So that breakdown was a move that typically leads to the market opening wide up and breaking down. This means that shorts should be ready to make a lot of money. Especially with us having seven new shorts. However, that did not happen.
Instead, prices moved higher today and did so on a very large increase in prices. However, the positive news for bears is that the price gains of today did not complete reverse the price losses of Tuesday. Also the seven new shorts that we took yesterday gapped higher thus giving us excellent prices for our short positions. So if every subscriber used limits, LIKE I TOLD YOU TO DO, then you all are now short some very weak stocks at some good prices. This has us setup in excellent reward/risk positions. Even if we have to cut our losses with the market rallying more from these levels, it was still a wise move to take these stocks short as they have patterns setup to provide us with gains of anywhere from 50% to 75% to the ultimate 99%.
Bear markets are usually never as smooth as bull markets, so it is not shocking to not see the market not crack wide open when it looks like it is about ready to. One of the reasons for this might be that there are still too many bears on the short term via the AAII bull/bear reading. A new reading comes out tomorrow, I believe, but right now it is obvious that the bears are beating the bulls. But the investors intelligence numbers show that the professional newsletter writers are bullish still with bulls coming in around 45% and bears coming in around 34%. Clearly, if this market was going to rally in a very bullish fashion, we would see bears beating bulls, since the market likes to do the opposite of the crowd.
One of the reasons I personally thought today would be a down day was that the put/call ratio fell from around 1.0 to .98 yesterday. That was my tell that something is wrong. The market fell around 6% on the NYSE yesterday yet more investors bought calls than puts as prices fell. That hinted to me that the public retail option buying crowd is OUT OF TOUCH with the reality of the market.
While in the long term that may not pay off, it very well could on the short term. Therefore, monitor our shorts closely for possible cover moves. We do have seven strong longs (none are "hot" or "pretty") that will definitely rally if the market decides to rally or move sideways with an upwards bias. However, they are not big enough that if a reversal happens the longs will hurt. Instead the longs are for "in case" moves. That is "in case" the market moves higher, we have seven strong longs to make money while we wait for the rally to fail.
Why do I feel it will fail? Because no "hot" long can stay "hot," any long that I take a position in either leaves me with a small loss or a small gain (ie...not a single recent long is making me rich!), and we continue to add shorts while dropping longs. We have gone from 13 longs to 5 longs to 7 longs the past seven days while going from 34 shorts to 35 shorts to 42 shorts! We lose longs yet gain shorts, while the market drifts sideways. That tells me that when this market decides to start trending again that trend will be down.
Now, is it possible the market can continue to do what it has done since October 27-to-now (the Nasdaq has moved a whopping +0.08% in almost three months) and drift sideways? Absolutely. However, when this drifting sideways is done, the market should move lower since we have so many short positions in downtrends and so few longs in nice uptrends. Now if it does turn into an uptrend, obviously we will take our profits from our long-term shorts, cover our losing recent shorts, and get long the new breakouts that come out of "hot, green, tight, accumulation filled" charts.
Right now, for the past three months, the market has really gone a whole lot of nowhere. That has been the case with our P&L statement but something tells me a trend is about to resolve itself from this long-term downtrend, intermediate term downtrend, sub-intermediate term LATERAL, and short-term LATERAL market. Once a trend is in place it normally stays in place and that would mean a move down. We will see what happens. For now, we do what the market tells us and hold a LOT OF CASH while we wait for the CLEAR "GET LONG NOW" or "GET SHORT NOW" signal. I'll tell you when that alarm goes off!
top short holdings with total returns that were UP yesterday (forgot to post yesterday): MOS 62% SPG 51% CEDC 72% CETV 83% GGB 57% APD 43% SBAC 47% OKE 37% RIMM 49% SPW 64% TITN 46% AAPL 51% PLCE 28% CASY 21% LLL 18% CPRT 29% SDA 76% AMX 50% IPHS 21% POT 58% CYT 61% BOH 20% ARB 70% CEO 36% CFR 17%
VIDEO ONE, TWO, AND THREE AVAILABLE ON THE GOLD FORUMS FOR GOLD AND PLATINUM MEMBERS.
Stocks sold off hard today as most indexes fell between 4% and 6% with volume higher on the NYSE but lower on the Nasdaq. However, the lower volume didn't matter as it was still above average and the breakaway from the 50 day moving average on the NYSE and Nasdaq is signaling to us that the short term rally that did appear like it was about to start will not start. This is probably disappointing for bulls but they can't be that shocked because as we have gone along the past seven days the charts have continually gotten worse.
About six days ago we had 13 small long positions and going into today we only had 5 long positions. All of those remain small since the trend is still very down. And that was proven to be a smart move today as the market cracked wide open thus creating a little bit of damage to our current longs and our current shorts. However, the damage to the shorts is obviously a good thing as it has given us a nice day of profits when most "bottom fishers" just lost more money than what they already lost in 2008 alone. The trend is your friend everyone. Please, never fight it! So many want to buy the bargains and have been doing this the entire way into the pullback. This has obviously been the wrong play and will continue to be the wrong play for as long as we are moving lower on the long-term trend, the intermediate term trend, the sub-intermediate trend, and the short-trend.
There is one thing very much for sure!! and that is that the long side is still not working. Those that think going long now are still clearly missing where the big money is being made. The short side. Until this entire stock market can actually start to rally on very strong volume and pullback on low volume which then unleashes "very beautiful max green BOP filled" and "CANSLIM quality" stocks the only right side will continue to be the short side.
Today we had 35 short positions going into today's market session. At the end of the day we had 34 of 35 higher for gains!!!! Woo hoo is about all I can say to that. The other important information came via our longs. Our five remaining longs all could have swooned today as the market did kill a lot of longs. But our longs are clearly leaders in this rough environment and they all did hold up. But to get me to become a bull and want to load up on longs not only will my current longs have to hold in better and get more green to max green BOP on their charts but I must also start to see setups that hold up the entire way and do not turn into disappointments. Right now, there just is not any pattern out there price, volume, and BOP relationship wise that makes me go "yes! that is the stock I am going to fully margin myself on."
I hope that when this next round of selling is done that we can at least have a short-term bull market in a long-term downtrend. Nothing makes you feel better than getting a 300% return in 3 months in a beautiful long and then repeating that process over and over in a bull market. Bull markets can make you filthy rich in a short time if you are in the right bull market. You normally get 3 to 4 times a decade to get a shot at becoming very wealthy by getting long the "perfect" setups that we used to get often enough from 1995 to 2007 that I would have to believe they will come back when this bear market is over.
Nobody knows how long this bear is going to last but we don't need to know how long it is going to last. All we need to do is keep an eye on the leading individual stocks and the general market. When the market stops trending lower and stops throwing up shorts and gets back to its pre-2008 way of operating then I will be very happy get long our next round of leaders
But that might be a while from now so we must focus on the short side and focus on protecting our cash levels. New investors I want you to completely understand that RIGHT NOW, CASH IS KING!!! If you are an experienced investor and have some experience working on the short side, you have my full blessing to start pressing your shorts. If they don't work you know what to do. Cut your losses very fast and make sure you keep all your shorts to a normal size. Don't get too nuts on any of them but don't be afraid to get short any of these new seven shorts as they all have the potential major issues that these stocks will have to work through.
Remember, in a bear market 3 out of 4 stocks follow the market lower, In this market is worse as 4 out of 5 stocks follow the market lower. So if you decide to buck the trend you are playing with very dangerous fire. Being long is the right move ONLY in bull markets. This is not a bull market. Only cash and a decent holding of shorts is the right play. The most perfect play is long gold, long the US Dollar, short the banks, and short the past leaders (AAPL CETV CEDC RIMM POT MOS etc...). If you have this combination in your IRA you are doing very well and need to keep things up. If you don't have this combination in your IRA then you need to start getting to work on it now.
This market is back to being in a clear downtrend, the few nice charts out there are now gone or are close to being gone, and our shorts are doing very well which is coming with another 7 possible new shorts.
Be careful out there everyone, stay bullish on yourself, and remember the trend is your friend. PLEASE WATCH THE VIDEO BELOW TO FULLY UNDERSTAND THE MARKET SITUATION WE ARE IN. ALOHA!
PLATINUM AND GOLD MEMBERS CAN VIEW FULL SIZE VIDEOS 1-3 IN THE GOLD FORUMS. FREE YOUTUBE VIDEO:
