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%)
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Showing posts with label making money. Show all posts
Showing posts with label making money. Show all posts
Sunday, February 15, 2009
Saturday, August 09, 2008
Longs Analys Detailed With Some Important Stock Market Information
August 10, 2008
For subscribers to the site, we are back online, after a NJ transformer exploded and knocked out 1,000 of website. We were one. Anyways, for those of you waiting for commentary, I have already updated the shorts and longs section–making the longs section very detailed about each stock and the overall condition of the current bear bounce. So if you need to whet your lips with some heavy “dope” about this market feel free to go to the longs page and get some knowledge.
For the freeloaders, I will be updating the site this weekend. It has been a busy weekend but the bottom line is you 1,2, and 3 year old ROOKIES/NEWBIES/FOOLS/COCKY CRANKY PEOPLE whatever you want to be called need to stop thinking you are tough shit. 90% of you will fail. So stop acting like you know it all in this market. The best traders ARE NOT DOING ANYTHING RIGHT NOW. Until you can figure out why the Home Run hitters aren’t swinging for pitches after all the data and reasons I have posted here the past three weeks there is not much else I can do to help your greedy behind.
What have you done for me last week? Nothing. What did I do for you in 1996, 1997, 1998, 1999, 2000, 2001, late 2002, 2003, 2004, 2005, 2006, early 2007, and with two stock in 2008. I MADE YOU FILTHY RICH. It is NOT my fault you are deciding to enter the market now in a bear market. That is your problem not mine. Where were you in 2003? Where were you in 2004? Study my past big winners and tell me if you want to make money like that or if you want to daytrade yourself to the poor house.
The ball is in your court. I have already won the game. Now I play for fun. I have turned an initial stake of $20,000 in NYC and Maui to a VERY LARGE six figure account (and that was while suffering emotional problems that took me down a wrong path of girls, booze, and drugs; the stock market made it all for me back) that has allowed me to open 4 separate accounts including an IRA. Why newbies with NO EXPERIENCE still try to “debate” me is FOOLISH. Just stop it and learn. Learn from some one who has PROVEN IN REAL TIME THAT HE IS SUCCESSFUL. I hide nothing. I show all my buys and show you all my sales!!!! What more do you want? My blood? Think about it.
Stay positive, don’t give up on the market and become a flipper/daytrader, know that this CANSLIM sytle will work for those that take the EFFORT to learn it. Lazy people will ALWAYS fail. LAZY PEOPLE do not do well with the CANSLIM system. Don’t be lazy it can reward you greatly. Do you really think I thought I could afford 10 years in Hawaii? HELL NO. Only one thing made it possible: proftis from the raging bullish stock market in 99, 03, 04, 05, and 06. 00, 01, 07, and 08 were OK. But early 02 and most of 08 is HORRIBLE. It isn’t my fault. It is the market’s fault. It will change. My question is will you? This is NOT rocket science! Keep it simple my friends. I don’t like seeing anyone fail but I have a few I am severly worried about (I am looking at you Yoni).
OK I will be back on Sunday before Monday with another update on this bear market. ALOHA!!
PS: Haven’t any of you studied the INDEPENDANT AAII analysis on the top 60 investment strategies? IBD ranks 3rd out of 60. The other top two are the EXACT SAME THING (a form of CANSLIM) but they implement more value metrics. This tracking has been going on since 1998. Here are a few links. Here is one. Here is another RECENT tidbit: ABOUT INVESTOR’S BUSINESS DAILY (IBD)
Investor’s Business Daily is a leading financial news and research organization recognized for proprietary stock screens, comparative performance ratings and a record of identifying stock leaders as they emerge. IBD’s companion website, Investors.com, offers stock tools and research for investors of every level. These include the IBD Learning Center, intraday reports on market action and the IBD StockCheckup(R). IBD hosts popular investment workshops and provides Home Study programs based on The CAN SLIM(R) Investing System. The newspaper was founded April 9, 1984 by William J. O’Neil, who originated the investing system that has outperformed major market indexes(a) for years. (a)The American Association of Individual Investors’ independent “real time” study found IBD’s CAN SLIM investing achieved +1521.7% vs. S&P 500 +54.92% for the past ten years (1998 through December 31, 2007, AAII Stock Screen). (C) 2008 Investor’s Business Daily, Inc., Investor’s Business Daily, IBD, CAN SLIM and corresponding logos are owned by Data Analysis, Inc., an affiliate of Investor’s Business Daily.
For subscribers to the site, we are back online, after a NJ transformer exploded and knocked out 1,000 of website. We were one. Anyways, for those of you waiting for commentary, I have already updated the shorts and longs section–making the longs section very detailed about each stock and the overall condition of the current bear bounce. So if you need to whet your lips with some heavy “dope” about this market feel free to go to the longs page and get some knowledge.
For the freeloaders, I will be updating the site this weekend. It has been a busy weekend but the bottom line is you 1,2, and 3 year old ROOKIES/NEWBIES/FOOLS/COCKY CRANKY PEOPLE whatever you want to be called need to stop thinking you are tough shit. 90% of you will fail. So stop acting like you know it all in this market. The best traders ARE NOT DOING ANYTHING RIGHT NOW. Until you can figure out why the Home Run hitters aren’t swinging for pitches after all the data and reasons I have posted here the past three weeks there is not much else I can do to help your greedy behind.
What have you done for me last week? Nothing. What did I do for you in 1996, 1997, 1998, 1999, 2000, 2001, late 2002, 2003, 2004, 2005, 2006, early 2007, and with two stock in 2008. I MADE YOU FILTHY RICH. It is NOT my fault you are deciding to enter the market now in a bear market. That is your problem not mine. Where were you in 2003? Where were you in 2004? Study my past big winners and tell me if you want to make money like that or if you want to daytrade yourself to the poor house.
The ball is in your court. I have already won the game. Now I play for fun. I have turned an initial stake of $20,000 in NYC and Maui to a VERY LARGE six figure account (and that was while suffering emotional problems that took me down a wrong path of girls, booze, and drugs; the stock market made it all for me back) that has allowed me to open 4 separate accounts including an IRA. Why newbies with NO EXPERIENCE still try to “debate” me is FOOLISH. Just stop it and learn. Learn from some one who has PROVEN IN REAL TIME THAT HE IS SUCCESSFUL. I hide nothing. I show all my buys and show you all my sales!!!! What more do you want? My blood? Think about it.
Stay positive, don’t give up on the market and become a flipper/daytrader, know that this CANSLIM sytle will work for those that take the EFFORT to learn it. Lazy people will ALWAYS fail. LAZY PEOPLE do not do well with the CANSLIM system. Don’t be lazy it can reward you greatly. Do you really think I thought I could afford 10 years in Hawaii? HELL NO. Only one thing made it possible: proftis from the raging bullish stock market in 99, 03, 04, 05, and 06. 00, 01, 07, and 08 were OK. But early 02 and most of 08 is HORRIBLE. It isn’t my fault. It is the market’s fault. It will change. My question is will you? This is NOT rocket science! Keep it simple my friends. I don’t like seeing anyone fail but I have a few I am severly worried about (I am looking at you Yoni).
OK I will be back on Sunday before Monday with another update on this bear market. ALOHA!!
PS: Haven’t any of you studied the INDEPENDANT AAII analysis on the top 60 investment strategies? IBD ranks 3rd out of 60. The other top two are the EXACT SAME THING (a form of CANSLIM) but they implement more value metrics. This tracking has been going on since 1998. Here are a few links. Here is one. Here is another RECENT tidbit: ABOUT INVESTOR’S BUSINESS DAILY (IBD)
Investor’s Business Daily is a leading financial news and research organization recognized for proprietary stock screens, comparative performance ratings and a record of identifying stock leaders as they emerge. IBD’s companion website, Investors.com, offers stock tools and research for investors of every level. These include the IBD Learning Center, intraday reports on market action and the IBD StockCheckup(R). IBD hosts popular investment workshops and provides Home Study programs based on The CAN SLIM(R) Investing System. The newspaper was founded April 9, 1984 by William J. O’Neil, who originated the investing system that has outperformed major market indexes(a) for years. (a)The American Association of Individual Investors’ independent “real time” study found IBD’s CAN SLIM investing achieved +1521.7% vs. S&P 500 +54.92% for the past ten years (1998 through December 31, 2007, AAII Stock Screen). (C) 2008 Investor’s Business Daily, Inc., Investor’s Business Daily, IBD, CAN SLIM and corresponding logos are owned by Data Analysis, Inc., an affiliate of Investor’s Business Daily.
Friday, July 13, 2007
Leading Stocks Help Take Indexes To All-Time And Six Year Highs; The Bears Who Continue To Fight This Trend Get What They Deserve
For the second week in a row, stocks put in one impressive week of gains, with today’s gains coming in some small part to the University of Michigan consumer confidence index coming in at 92.4 above estimates of 86. However, that simply was not the reason for today’s gains, as another round after afternoon short squeezing hit the indexes sending them near the highs of the session with the Nasdaq closing just short of its HOD. The gains also came in the face of oil rising $1.43 to $73.93.
At the close, the DJIA, SP 500, and SP 600 all hit new all-time highs rallying .3% and the NYSE and Nasdaq gained .2%. The NYSE hit another all-time high and the Nasdaq hit a new 6 1/2 year high. The best part about today’s gains, of course, comes in the fact that leading stocks led the way, once again. The IBD 100 gained .7%, doing much better than the broad market.
Volume was lower today, compared to yesterday’s volume. But considering that we produced some really big gains (biggest on the DJIA since 2003) and were right before the weekend, today’s action has to be considered very bullish and constructive. We could have sold off on lower volume or even higher volume.
There were some weak points with the internals. Despite the gain in the Nasdaq, decliners beat advancers by a 7-to-6 ratio and advancers barely beat decliners on the NYSE. There were also 150 new 52-week lows, despite the markets hitting new highs. But with 683 new 52-week highs, it is not anything to worry about.
For the week, it really doesn’t get much better than what we saw. The DJIA led the way with a 2.2% gain, the Nasdaq followed with a 1.5% gain, and the NYSE and SP 500 gained 1.4%. The best new, obviously, was that leading stocks, once again, beat the broad market for the week. The IBD 100 produced a 2.5% gain, after last weeks 5.2% gain. The best news, however, comes from my own personal IB portfolio. After having a poor weak last week, I managed to return a 10.3% gain for the week. This is what happens when you are in the right stocks. The outperformance has been there every week, except for one, since the March lows. This is what proper disciplined growth momentum investing is all about. There is no doubt, this is a great short-squeezing July, full of breakout in many leading stocks.
I remember, last year, constantly referring to our market as having a potential to repeat a 1995 scenario. Not long after, I heard Kudlow and IBD also bring this up. Now recently Cramer has brought it up, refreshing my memory on that scenario. The only thing that is different is that rates are not being cut yet. If the market keeps rallying and inflation does come into a more moderate pricing zone that would be great. However, no matter what happens, it looks like the 1995 scenario has and is playing itself out. This continues to be the most amazing market that gets absolutely no credit on major media outlets. And if Cramer and history is right and this is a replay of 1995 we have a lot more room to run, especially with tech just now joining the party.
This, however, creates the perfect wall of worry that the stock market needs to climb higher. If you think there is not any fear out there and that everybody is just giddy and happy with this market, let me remind you that the put/call ratio spiked to .99 on Tuesday after the market “swooned,” according to the media. The fear and blatant top calling is, ONCE AGAIN, something you do NOT see at market tops. EVERYBODY and I mean EVERYBODY is in love with the market and everybody will be talking about these good times.
Now, if you are a subscriber to my gold service, I know it seemed like Christmas this week as a LOT of gains were made in many favorite stocks. We did have one suck it up (MTOX) but one out of every other one is not that bad. However, I am not losing my mind over the gains and understand that this is what is supposed to happen in bull markets. It is when my neighbors start celebrating their gains that I will get nervous.
As of right now, to go along with the put/call still being at .76, the NYSE short-interest ratio is still near all-time highs at 7.52. LOL, this is not the number you will see at a market top. The other thing with this bearishness and start of parabolic runs in the charts is the fact that stocks are not doing crazy splits yet. Well, I take that back. I did see RIMM announce a 3-for-1. PEOPLE THAT IS A WARNING. PARABOLIC RUNS AND EXCESSIVE STOCK SPLITS ALWAYS LEAD TO A TOP. So keep your eyes out, even though I don’t expect one for months and months. It pays to be prudent.
And when we do top I have my list of stocks to short: GOOG, AAPL, RIMM, AMZN, ICE, BIDU, FWLT, FSLR, TNH, MA, and CME. I’ll give them to you for free, knowing that most of traders will NOT be able to short these at the right moment and history shows that most will be squeezed out of their shorts many times before the real fall comes. And by that time traders are so dejected that they miss the right moment. I won’t. :)
To prove my point that most will not be able to short the market when they are supposed to, I am finding out many traders are not very good at going long stocks either. In the free chat rooms I monitor I see a lot of traders selling prematurely all the time. Many have bought stocks to sell them on the smallest uptick and now want back in. By watching this action, I can understand why more gains at this juncture will not need a lot of volume. This retail crowd buying on top of the shorts being forced to cover due to them not being able to take the squeeze anymore ensures we will keep going higher. Even thought the crowd is bullish, yet betting bearishly, it doesn’t take much to take a market up with low supply and high demand.
If you did not notice this week, GE, COP, JNJ, HD, SHLD, and AMGN all announced stock buyback. FOLKS! These are no small-fries. These are real big giant companies. This along with all the M&A’s and leaders going into exponential to parabolic moves is the reason why you have to be long here. ABN is selling its LaSalle bank to BAC, ENR is buying PYX, and RTP outbid AA for AL with a $38 billion bid, and you want to be short stocks and long puts? Yeah right! Not me! You want to be short stocks only in a bear market and this is not a bear market. This market is not yet ready to top.
The reasons I see for a top are weak. They involve us being overbought and it involves the high bullishness in the surveys. The overbought can be attributed to the McClellan, 10-DMA of Adv/Dec line, and Arms index. The McClellan is moving overbought but it is nowhere near the 80s at only 68.6. The 10-dma index is overbought but nowhere near extreme levels, and the Arms index is overbought ALL THE TIME. It is almost useless. As for the surveys: the realmoney.com poll shows 69% bulls, 11% bears, and 20% netural. The Investors Intelligence is at 69.5% bulls and 21.8% bears. The AAII is at 44% bulls and 30% bears. However, relying on these for tops is useless. It is better using the UBS euphoria index and that is NOWHERE near euphoric levels seen in 2000.
Also, with the Gold, Steel, Metal, Mining, and all the old leaders moving along with the SOX index and all the technology stocks moving up the IBD 197 industry list it is very hard for me to be worried about a top. Look at AA. It is moving like a tech stock. That is a bull market if I have ever seen a bull market. Seeing the SOX and electronic stocks help leading the market to new highs is just a beautiful thing to see. Especially, when they are joined by so many other groups.
My suggestion is to continue to stay long and strong. Don’t go out trying to chase performance and do not chase stocks way beyond logical pivot points. If you are long, continue to enjoy the gains, but make sure you take some profits along the way when the stock’s price and/or volume acts odd. When the market tops and leading stocks are rolling over, trust me, I will let you know. You will see me selling off many of my top stocks and cutting my new buys short very quickly by them failing immediately. Also the amount of longs will dry up. As they are starting to do on my scans. Most stocks are well beyond proper buy points. Right now, it is all about holding the stocks you are long and riding the gains. Going long a lot of stock here is just a little too risky.
So let the overseas money with a strong Euro continue to find a safe home in the US equity market. As long as they are buying this market, you have to stay long.
Second quarter earnings really start rolling out this week. Expect a rise in volatility, as always happens during earnings season. Remember, going long a stock before earnings is a dangerous play. But selling a long ahead of earnings is an immature amateur play that only newbie emotional inexperienced traders do. Normally, if the stock is in an uptrend, the earnings don’t matter, as the stock will rise. Vise versa, in a bad market. VSCN is a perfect example. They miss, yet their stock rises. Such is a bull market. And that is what we are in.
Aloha and I will see you in the chat room!
Sidenote: Since May 2, 2003 the IBD 100 is up 216% compared to the SP 500’s 66% gain. The greatest traders are the greatest traders for a reason: history.
top holdings up this week - purchase date
TRCR 531% - 1/12
MA 240% - 8/2
OMTR 192% - 9/15
KHD 150% - 5/30/06
IHS 146% - 12/21/05
ULTR 141% - 10/27
TTEC 129% - 8/25
CPA 128% - 9/15
DECK 117% - 9/13
IGLD 103% - 10/26
CNH 103% - 11/2
CKSW 103% - 10/11
HURN 96% - 9/13
APLX 95% - 9/28
EVEP 94% - 11/16
AFSI 89% - 4/12
CXW 89% - 5/19/06
VDSI 85% - 1/14
CTCH 83% - 1/24
INNO 83% - 6/4
FSLR 76% - 5/23
HURC 71% - 12/18
LFL 66% - 12/13
ATX 65% - 12/12
VSR 63% - 6/15
CRNT 62% - 5/21
TESO 60% - 2/16
NAVI 58% - 12/18
IMA 57% - 8/2
SNDA 55% - 12/26
SMTX 55% - 6/15
NTLS 55% - 1/30
TASR 54% - 6/6
ICOC 52% - 5/18
IMMR 50% - 6/21
Market Commentary At Big Wave Trading Bronze Level One
New Swing Longs: Silver Level Two
New Swing Shorts: Silver Level Two
Stocks On My Watchlist: Gold Level Three
Complete Profits/Losses: Gold Level Three
Partial Profits/Losses: Gold Level Three
MauiTrader Forums: Gold Level Three
MauiTrader Chat Room: Gold Level Three
Longs Up On The Day: Gold Level Three
Shorts Up On The Day: Gold Level Three
At the close, the DJIA, SP 500, and SP 600 all hit new all-time highs rallying .3% and the NYSE and Nasdaq gained .2%. The NYSE hit another all-time high and the Nasdaq hit a new 6 1/2 year high. The best part about today’s gains, of course, comes in the fact that leading stocks led the way, once again. The IBD 100 gained .7%, doing much better than the broad market.
Volume was lower today, compared to yesterday’s volume. But considering that we produced some really big gains (biggest on the DJIA since 2003) and were right before the weekend, today’s action has to be considered very bullish and constructive. We could have sold off on lower volume or even higher volume.
There were some weak points with the internals. Despite the gain in the Nasdaq, decliners beat advancers by a 7-to-6 ratio and advancers barely beat decliners on the NYSE. There were also 150 new 52-week lows, despite the markets hitting new highs. But with 683 new 52-week highs, it is not anything to worry about.
For the week, it really doesn’t get much better than what we saw. The DJIA led the way with a 2.2% gain, the Nasdaq followed with a 1.5% gain, and the NYSE and SP 500 gained 1.4%. The best new, obviously, was that leading stocks, once again, beat the broad market for the week. The IBD 100 produced a 2.5% gain, after last weeks 5.2% gain. The best news, however, comes from my own personal IB portfolio. After having a poor weak last week, I managed to return a 10.3% gain for the week. This is what happens when you are in the right stocks. The outperformance has been there every week, except for one, since the March lows. This is what proper disciplined growth momentum investing is all about. There is no doubt, this is a great short-squeezing July, full of breakout in many leading stocks.
I remember, last year, constantly referring to our market as having a potential to repeat a 1995 scenario. Not long after, I heard Kudlow and IBD also bring this up. Now recently Cramer has brought it up, refreshing my memory on that scenario. The only thing that is different is that rates are not being cut yet. If the market keeps rallying and inflation does come into a more moderate pricing zone that would be great. However, no matter what happens, it looks like the 1995 scenario has and is playing itself out. This continues to be the most amazing market that gets absolutely no credit on major media outlets. And if Cramer and history is right and this is a replay of 1995 we have a lot more room to run, especially with tech just now joining the party.
This, however, creates the perfect wall of worry that the stock market needs to climb higher. If you think there is not any fear out there and that everybody is just giddy and happy with this market, let me remind you that the put/call ratio spiked to .99 on Tuesday after the market “swooned,” according to the media. The fear and blatant top calling is, ONCE AGAIN, something you do NOT see at market tops. EVERYBODY and I mean EVERYBODY is in love with the market and everybody will be talking about these good times.
Now, if you are a subscriber to my gold service, I know it seemed like Christmas this week as a LOT of gains were made in many favorite stocks. We did have one suck it up (MTOX) but one out of every other one is not that bad. However, I am not losing my mind over the gains and understand that this is what is supposed to happen in bull markets. It is when my neighbors start celebrating their gains that I will get nervous.
As of right now, to go along with the put/call still being at .76, the NYSE short-interest ratio is still near all-time highs at 7.52. LOL, this is not the number you will see at a market top. The other thing with this bearishness and start of parabolic runs in the charts is the fact that stocks are not doing crazy splits yet. Well, I take that back. I did see RIMM announce a 3-for-1. PEOPLE THAT IS A WARNING. PARABOLIC RUNS AND EXCESSIVE STOCK SPLITS ALWAYS LEAD TO A TOP. So keep your eyes out, even though I don’t expect one for months and months. It pays to be prudent.
And when we do top I have my list of stocks to short: GOOG, AAPL, RIMM, AMZN, ICE, BIDU, FWLT, FSLR, TNH, MA, and CME. I’ll give them to you for free, knowing that most of traders will NOT be able to short these at the right moment and history shows that most will be squeezed out of their shorts many times before the real fall comes. And by that time traders are so dejected that they miss the right moment. I won’t. :)
To prove my point that most will not be able to short the market when they are supposed to, I am finding out many traders are not very good at going long stocks either. In the free chat rooms I monitor I see a lot of traders selling prematurely all the time. Many have bought stocks to sell them on the smallest uptick and now want back in. By watching this action, I can understand why more gains at this juncture will not need a lot of volume. This retail crowd buying on top of the shorts being forced to cover due to them not being able to take the squeeze anymore ensures we will keep going higher. Even thought the crowd is bullish, yet betting bearishly, it doesn’t take much to take a market up with low supply and high demand.
If you did not notice this week, GE, COP, JNJ, HD, SHLD, and AMGN all announced stock buyback. FOLKS! These are no small-fries. These are real big giant companies. This along with all the M&A’s and leaders going into exponential to parabolic moves is the reason why you have to be long here. ABN is selling its LaSalle bank to BAC, ENR is buying PYX, and RTP outbid AA for AL with a $38 billion bid, and you want to be short stocks and long puts? Yeah right! Not me! You want to be short stocks only in a bear market and this is not a bear market. This market is not yet ready to top.
The reasons I see for a top are weak. They involve us being overbought and it involves the high bullishness in the surveys. The overbought can be attributed to the McClellan, 10-DMA of Adv/Dec line, and Arms index. The McClellan is moving overbought but it is nowhere near the 80s at only 68.6. The 10-dma index is overbought but nowhere near extreme levels, and the Arms index is overbought ALL THE TIME. It is almost useless. As for the surveys: the realmoney.com poll shows 69% bulls, 11% bears, and 20% netural. The Investors Intelligence is at 69.5% bulls and 21.8% bears. The AAII is at 44% bulls and 30% bears. However, relying on these for tops is useless. It is better using the UBS euphoria index and that is NOWHERE near euphoric levels seen in 2000.
Also, with the Gold, Steel, Metal, Mining, and all the old leaders moving along with the SOX index and all the technology stocks moving up the IBD 197 industry list it is very hard for me to be worried about a top. Look at AA. It is moving like a tech stock. That is a bull market if I have ever seen a bull market. Seeing the SOX and electronic stocks help leading the market to new highs is just a beautiful thing to see. Especially, when they are joined by so many other groups.
My suggestion is to continue to stay long and strong. Don’t go out trying to chase performance and do not chase stocks way beyond logical pivot points. If you are long, continue to enjoy the gains, but make sure you take some profits along the way when the stock’s price and/or volume acts odd. When the market tops and leading stocks are rolling over, trust me, I will let you know. You will see me selling off many of my top stocks and cutting my new buys short very quickly by them failing immediately. Also the amount of longs will dry up. As they are starting to do on my scans. Most stocks are well beyond proper buy points. Right now, it is all about holding the stocks you are long and riding the gains. Going long a lot of stock here is just a little too risky.
So let the overseas money with a strong Euro continue to find a safe home in the US equity market. As long as they are buying this market, you have to stay long.
Second quarter earnings really start rolling out this week. Expect a rise in volatility, as always happens during earnings season. Remember, going long a stock before earnings is a dangerous play. But selling a long ahead of earnings is an immature amateur play that only newbie emotional inexperienced traders do. Normally, if the stock is in an uptrend, the earnings don’t matter, as the stock will rise. Vise versa, in a bad market. VSCN is a perfect example. They miss, yet their stock rises. Such is a bull market. And that is what we are in.
Aloha and I will see you in the chat room!
Sidenote: Since May 2, 2003 the IBD 100 is up 216% compared to the SP 500’s 66% gain. The greatest traders are the greatest traders for a reason: history.
top holdings up this week - purchase date
TRCR 531% - 1/12
MA 240% - 8/2
OMTR 192% - 9/15
KHD 150% - 5/30/06
IHS 146% - 12/21/05
ULTR 141% - 10/27
TTEC 129% - 8/25
CPA 128% - 9/15
DECK 117% - 9/13
IGLD 103% - 10/26
CNH 103% - 11/2
CKSW 103% - 10/11
HURN 96% - 9/13
APLX 95% - 9/28
EVEP 94% - 11/16
AFSI 89% - 4/12
CXW 89% - 5/19/06
VDSI 85% - 1/14
CTCH 83% - 1/24
INNO 83% - 6/4
FSLR 76% - 5/23
HURC 71% - 12/18
LFL 66% - 12/13
ATX 65% - 12/12
VSR 63% - 6/15
CRNT 62% - 5/21
TESO 60% - 2/16
NAVI 58% - 12/18
IMA 57% - 8/2
SNDA 55% - 12/26
SMTX 55% - 6/15
NTLS 55% - 1/30
TASR 54% - 6/6
ICOC 52% - 5/18
IMMR 50% - 6/21
Market Commentary At Big Wave Trading Bronze Level One
New Swing Longs: Silver Level Two
New Swing Shorts: Silver Level Two
Stocks On My Watchlist: Gold Level Three
Complete Profits/Losses: Gold Level Three
Partial Profits/Losses: Gold Level Three
MauiTrader Forums: Gold Level Three
MauiTrader Chat Room: Gold Level Three
Longs Up On The Day: Gold Level Three
Shorts Up On The Day: Gold Level Three
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