Stocks End The Week The Way They Started With Another Selloff; Long Gold/Silver/Platinum + Short Stocks = Big Profits In This Market

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%)

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Stocks Ticked Higher Ending A Very Quiet Yet Bullish Week For Stocks; Here Comes The Fed

Another excellent and bullish intraday reversal followed what was a very weak opening. This continues a pattern in the stock market since the August 16 lows, where a lower gap before the opening bell is bought by investors and bid higher almost all day long. Ugly beginnings of the trading day that end like this are a sign of a healthy market, not a bearish market. Even though volume remains completely absent, the price action speaks for itself as it is the final TRUTH in the stock market–not your opinions.

The light volume this week was blamed on Rosh Hashana but somehow I doubt Rosh Hash had anything to do with the low volume this week as that has been all that we have seen the past month. Despite the low volume, the Dow led the way, jumping 2.5% for the week. The NYSE composite ramped up 2%. The S&P 500 climbed 2.1% and the Nasdaq 1.4%.

This low volume rally has left MANY people on the sidelines scratching their head as they watch new breakout move higher and higher and watch leading stocks continue to hit all-time highs. This goes back to the same argument I have been making since I can remember. The trend is your friend. Rather on low volume or high volume, if you get stocks breaking out of sound bases on high volume, you need to just ignore the low volume overall in the market and take your signals. By passing on your signals, I AM SURE, a lot of you have missed out on some big gains.

Now, at the same time of saying this, it is true that low volume rallies are bad and usually are met by heavy volume selling. But, how do you know it is going to happen this time, fortune tellers?? You don’t. So stop trying to predict where in the hell the top is. That is all I keep hearing about–the top. Therefore, wouldn’t you feel quite stupid that instead of heavy volume selling hitting the market, instead heavy volume accumulation comes in due to the fact that the big boys are feeling pain by underperforming the market? Well, to the addicted top callers, I am sure you don’t care. Your memories are about as solid as water. So you will not remember this top call or the other 100 you made.

So, while some decide to play that game-and it appears almost all are as the Fed meeting is right around the corner-I will continue to just listen to the only thing that I ever listen to. Price and volume. That is it. If a stock breaks out or bounces off the 50 or 200 day moving average, on strong volume, I want to be long. If the stock breaks down or bouncing off the 50 and 200 day moving average to the downside, I want to be short. All the predicting BS will never make you money like just playing the trend will do. If you do what I just typed in this paragraph, you will do a lot better than your “smart” friends who are telling you when this rally will fail.

There continues to also be a ton of subprime and mortgage talk out there. That is the PERFECT wall-of-worry for us to continue to climb. The more we continue to worry about the fallout from the subprime business, the further this rally has to go. We have to wait for all the talking morons on CNBC to finally stop freaking out and tell us the worst is behind us before ANY top can happen. Our wall-of-worry is strong and continues to be there to ride higher.

Reports that the Bank of England provided emergency funding to the U.K.’s third largest mortgage lender, only confirms that the trouble in this sector will continue to be magnified and blown out of proportion.

What if everyone is right and we do go into a recession? Are you kidding me? If they are, then we will act accordingly. We do NOT marry our positions. When our leading longs give us clear sell signals, we do not argue with them, we simply obey them and get out. Then if the market does tumble, we can move our now free cash to shorts. It is simply that simple. Too simple for most to believe it works. And that is fine with me. Continue to quant your way to the poorhouse or the house of mediocre returns, fundamentalist.

Everyone, right now, seems focused on the upcoming FOMC meeting this Tuesday where the Fed is expected to lower rates from the current 5.25% that they have been at since June 2006. A lot expect .5 and some expect .25. Either way, you shouldn’t pay too much attention to all of this NOISE and instead should be focusing your time on the longs and shorts that show up on your scan. Make money here; don’t become a Fed watcher. Do you really want your life to be like that? Isn’t it more fun finding stocks like VMW, instead of watching Ben bitch about the economy?

Stocks like SXE, GME, CMED, TBSI, YHOO, and OMTR are ALL much more exciting than anything you will ever get out of watching Ben. Trading off of Ben will also NEVER get you the returns a strong investment in a top stock like OMTR will.

The good news is that there are still many stocks out there that are setting up and breaking out of bases with the kind of possible potential gains that OMTR has had. What makes it even better is that most people seem to be completely unaware or uninterested in it. I saw more than one or two times this week where professionals made comments somewhere along the lines that this market is not fun and they are burned out. Burned out from what? All the strong chart patterns showing up? Their pain is my gain!

All of this could change at any time and the Fed may in fact mark a top in the market. However, like I said before, by being involved in the longs at the right time we would still be able to get out with SOME gains and then have enough time to turn around and go short. Bear markets don’t only last for a few days. Real bear markets last years and years.

Speaking of bear markets, I want everyone to do me a favor and look at the Russell 2000 index. On a daily chart, since late July, I want you to count how many days on the chart where you either see a bullish intraday reversal (they look like tails and are called “hammer” patterns) or days where the price opens at or near the lows and then closes either near or at the HOD. You will notice that there are a lot. Then check out the weekly chart of the Russell 2000. After the week of July 26, you will notice that EVERY week has seen a selloff and every week has then seen price come back from the lows and close either near the highs of the week or actually come back and close above the open of the week. This week was just another example of a strong opening week, turn into some selling, and then turn into a well supported market that closes near the highs of the week. That is bullish, until it ends. And as long as patterns in this index exist, there are going to be plenty of longs out there to make some money on.

Before I get out here I want to let everyone know that I have suffered yet another disturbing medical experience. I was supposed to run the marathon this Sunday, but, instead, sadly, I became VIOLENTLY ill the night before and for the first time in over ten years was forced to call an ambulance. During the ride to the hospital I suffered a twenty second “tonic” seizure. They do not know what the cause was or even why I got violently ill. It could have been food poisoning, the medication from my MS drug (I have Mutliple Sclerosis for those that don’t know), or dehydration. They simply don’t know. I just want to thank everyone for reading me and let you know that your readership is what helps keep me strong. Thank you very much, God bless, and Aloha. I will see you in the chatroom!!!!

WINNERS: OMTR 246% BCSI 92% ZNH 247% NVT 53% EDO 70% ICOC 80% WRLS 88% DECK 101% IMA 50% TTG 75%