Strong Rally On Higher Volume Confirms Yesterday's Move; Leading Stocks Help Lead The Market Higher.

Just as you thought the market was going to continue its chop and flop it instead continues to rally. For the second day in a row major market indexes came under good accumulation from institutional investors. However, the media will have told you that the Fed's beige book report was the reason for the upside move. Believe what you want.

Major market indexes all closed near the HODs, with the Russell 2k up .9%, SP 600 up .8%, Nasdaq up .7%, SP 400 up .7%, DJ up .5%, and the SP 500 up .4%. The Russell 2k and the SP 600 made all time highs today and the SP 500 and Dow Jones almost made new 5 year highs.

Volume was higher on both the NYSE and the Nasdaq. Obviously, this is what you want to see as markets rally. Breadth was 2-1 positive on the NYSE and 3-2 positive on the Nasdaq. Overall, a very nice day. Not the best but a lot better than the choppy action we have seen the past two weeks.

The leading sectors today resided in the Transportation-Railroad and Airlines, Retail-Department Stores and Restaurants, and Building-Supplies and Materials. Along with those good sectors, leading stocks led the rally with the IBD 100 rising 1.7%. The constant mix of new leaders leading sectors, and the IBD 100 full of leading stocks making good gains the past two days are very bullish for stocks.

The most incredible thing about this rally is the fact that bears are at their highest levels since April 2003 and bulls are at their lowest level since August 2004 according to the Institutional Investor survey of newsletter writers. Bearishness this thick is exactly what you want to see when a market starts a new rally. Markets rise best when they have a big wall of worry to climb. This market is full of worries. I just read an IBD article saying that even though there was 2.5 million new jobs added last year and unemployment is lower than 5% over half of the stories, on ABC, NBC, and CBS, covering jobs was NEGATIVE! Surprise!!!!

The last time bears were this high was in April, as I have said before. What did the stock market do from March/April 2003 - January 2004?

Now will this be the same rally as the March rally was? I don't know. The underlying technicals on the indexes are weakening and this could just be an oversold bounce (based on McClellan oscillator). However, earnings season is over and this could be the moment that stocks go on a run like 2003. Either way, it does not matter. Just follow the charts and react accordingly.

As you know if you have been reading my blog, I am one commentator that did not capitulate during the recent market downtrend. I stayed somewhat bullish with a cautious bias. That was the proper play, since both the long-term and intermediate trends were ALL up on ALL indexes. How can you get so darn bearish when the intermediate trend is still up? It just didn't make sense.

But the media has brainwashed everyone into believing the market sucks, the economy sucks, the President sucks, Iraq sucks, Afghanistan sucks, Iran sucks, and everything in life just plain sucks. You want to know what? CNN, CBS, ABC, NBC, and PBS, YOU GUYS HAVE LOST ALL CREDIBILITY. They do not report all of the news. You are getting selected stories that fit their anti-Bush agenda. It is getting to the point of absurdity.

If you want facts, you better go somewhere else. The BS that comes out of these once decent news sources is just totally disgusting. Yeah, they may be right two years from now but that hasn't helped you make money the past three years in one of the GREATEST economies recorded in US history.

If you just follow the charts, watch the indexes, and stop trying to predict the future you will become a better disciplined investor.

And if you turn off the TV, you might find that life is great and we live in the greatest country on Earth. No where else do you have the freedom and opportunity that exist in this country.

I hope you enjoyed that, if you are a bear. I will join your camp when the time is right. Right now, you guys are wrong AGAIN. Three years and counting...

Great luck and I shall see you tomorrow!


New Swing Longs: NTES RIMM PWR ECIL VSAT CKR LPTH MDII--Go to Investors Paradise to read about these longs. Scroll down to Josh Hayes, click on longs, and read the most recent post.

New Swing Shorts: NONE

Longs Outperforming Market: VIMC-63% RAIL-65% COGO KEX-26% IHS-26% MFLX-209% SCHK-39% CYBS SLW-104% BAM STMP-47% CBG-103% CRDN-54% ERS-137% PETS-155% IVAC ARS-50% STX XRTX-31% UIC-34% BBD-144% CTXS-33% SAY-29% CHE NNDS-27% RUSHA BOOM-373% CIB-40% NVDA-67% TMI KDN NGPS LTM CLZR-36% LCRD-93% PKE NTAP WIRE-148% MDCC-39% RUTH FFIV ROK VLG HEIA-31% FRGB MMK-41% SPWR-51% FWLT-65% ALTU PEC SSW WBMD SURG LMIA-90% EMKR-142% SWW JDSU-67% TOMO NVAX-54% RBAK-168% FDRY-28% GNA VRTX-195% ECOL LRCX-34% GEMS ECLP NYX-43% NDAQ-321% GNBT-69% OPLK ISV LCC-71% SYKE KLIC-29% ACTG-28% IIP IT TXI EAGL-51% AXE IED-85% STKL SNPS A Q-49% KNOL-45% VLTR BE BEAS BWNG-96% STTS TBH MT HOM ELMG IMMR TFR-59% SF VTRU

Shorts Outperforming Market: NONE

Stocks On Radar Screen: PENN CMG CHNR CTDC IBIS TXCC FRD

Major Stock Averages Follow-Through On Heavier Volume To Confirm Current Rally; SP 500, DJ, And NYSE Hit New Multi-Year Highs.

Another day, another opposite of the previous day. Bonds and Financial stocks were the reason the markets rallied today, according to the media. The Nasdaq was up 1.3%, SP 600 up 1.1%, SP 400 up 1.05, SP 500 up 1%, and the Dow Jones up .7%. The biggest winners however were in the Semiconductor Index, which was up 2.2%, and the IBD 100 up 1.4%.

The breadth behind the rally was very strong, with 2.5 stocks positive for every 1 down. Volume was also higher than the day before, confirming the current rally, after the March downtrend we have been in. The volume, however, was below the 50 day volume average on both indexes. This indicates institutions were hungry for stocks, after the downtrend, but not hungry enough to step over each other in trying to bid them up.

One thing that was unequivecably bullish is the fact the NYSE, SP 500, and Dow Jones keep making new 5 year highs while market participants talk a bearish game. Those new highs along with the Financial stocks roaring and Telecom, Medical, Computer stocks moving suggest the bears are still wrong and will be for some time to come still.

The pullback is starting to look like it was in fact a rotation of leadership from the leaders from October into some fresh names in some of the industries mentioned above. This rotation with the continued leadership of Financial stocks is what some of the best bull markets are made of. Look at ET, AMTD, TRAD, LEH, GS, MER, MEL, UBS, BBD, and BSC. They have been moving higher the entire bull market that started in October 2002 and after every significant pullback the market has they take off again. They just do it with a new batch of leadership, each time.

There are still plenty of very good looking green charts out there and there is still plenty of negativity out there by market participants. These two factors help create that proverbial wall-of-worry the markets like to climb.

The fact that all of the reasons the market should have crashed by now have not actually caused the market to crack should be a wake up call to the bears. However, they are stubborn and hate the current President no matter what that they are willing to cloud their judgement with their hatred and try shorting stocks when the right play has been to be long stocks all the way from the 2002 bottom.

I wish everyone the best. Good luck out there and stay positive. This is a great country and Capitalism is the best chance for the poor to become rich. And becoming rich isn't what it is all about. But, darn it, it helps a lot!!!

New Swing Longs: FRGB IVAC MXWL ORCC ELMG--To read more about these longs go to Investors Paradise and scroll down to Josh Hayes and then go to the 'Longs' thread.

New Swing Shorts: NONE

Longs Outperforming Market: MFLX-195% RATE-128% BOOM-365% SCHK-33% CBG-96% UHAL-102% RUTH ERS-129% CYBS XRTX-27% TRAD-51% IHS STX NVDA-64% CLZR-34% LCRD-90% NTAP BBD-139% PKE KDN SCVL VTS CIB-38% WIRE-146% TMI CTXS-30% MTU KEYS-40% ROK FFIV ASVI LTM MDCC-37% VIMC-39% RUSHA HEIA-31% TNOX-33% SLW-97% CVN SPWR-47% MMK-38% FWLT-62% IKAN-36% PEC DRH ALTU SSW NVAX-46% EVST-63% ISV EMKR-122% KNOL-42% GNBT-57% OPLK LRCX-29% GEMS STXN-54% LSI UBS CVO-79% CHRD IED-81% EAGL-47% EDS SWW MT CONR RCNI GNA BAM FDRY ARS-45% BEL-25% IMMR TISA ICTG-73%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: RMBS CMG PTIE POL

Stock Indexes Reverse Off Of Morning Highs Leaving Most Indexes With Small Gains On Lower Volume

It was the same stuff as last week as stocks ran out of steam, after the early morning gap, and reversed to close with small gains. The SP 400 was up .4%, the SP 500, SP 600 and Nasdaq were up .2%, and the Dow Jones was basically unchanged. The blame of the day went on oil prices, bond yields, and AMD as the cause for the early morning reversal.

Volume came in lower which is very disappointing for the bulls. Lower volume and a gap reversal in the morning can only be taken as a sign the markets big boys are not in any hurry to bid stocks higher. The advance/decline line stayed positive after the reversal as leaders beat decliners by an 8.5-7 margin. Small consolation to an otherwise poor day.

The tech leaders from the October rally and the Semiconductors are still struggling and not participating in the rally we have had the past two days. That along with the lack of strong chart patterns and no new longs today gives me reason to watch the market very closely here. It is already under pressure and the failure of this bounce to produce anything special should be enough reason for new traders to start selling laggards. This was suggested over the weekend by a smart trader and I concur newbies should sell the weak stocks. However, I would hold the winners that are still acting well and not showing any signs of damage.

My new longs should have better starts than what they are having. I should have a lot more BEL, NENG, ISV and WDHD acting stocks than what all these new buys are producing. This along with the previous paragraph just shows how crazy the market is right now. It isn't weak enough to give up on it yet or strong enough to get behind. It just is.

Good luck and I will see you tomorrow for more of the same stuff.

New Swing Longs: NONE

New Swing Shorts: NONE

Longs Outperforming Market: STMP-43% ERS-123% FFIV CTXS-29% XRTX CYBS NNDS-26% MFLX-181% CLZR-31% KNXA-51% SAY-29% TRAD-44% WIRE-143% SCHK-28% PETS-155% RATE-116% SLW-95% RUSHA TNOX-33% ASVI MTU VTS NVDA-60% BBD-133% LTM ROK CIB-36% PKE MDCC-37% CHE NGPS VLG IKAN-33% MEK-67% MMK-35% PEC FWLT-59% ALTU SSW NHWK WBMD NYX-32% ISV EVST-52% NVAX-35% EMKR-108% BWNG-102% NRPH-103% HOM KNOL-33% ICU GEMS APAC-43% IIP VLTR FDRY MERX NENG-27% ASF-195% PAY-40% GNA NANX A BKHM-49% UBS STEL TGE JDSU-54% EAGL-44% NNI LMIA-73% BEL UIC-31% WDHD TISA ICTG-72%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: ANO SCMR IMOS

How I Use Investors Business Daily With TCNet

IBD is the greatest investing tool I have ever seen in my life, to this day. I was blessed that my father mentioned this newspaper to me when I was 16. How he mentioned it and introduced me still is amazing to me. He only knew of "this Investors paper" his mom mentioned once to him. He said that she said that this was the greatest thing she has ever seen in her life for investments. My grandmother died in 1985 and IBD was only created in 1984. Fortunately, for me, he remembered this conversation and got me a one year subscription to "this Investors paper." The rest is personal history for me.

With that introduction and eleven years experience with this newspaper I will now show you how I personally use it.

First off you must understand I am an after-hours trader. I don't like doing ANYTHING during market hours, except watch the first 30 minutes of the trading day and the last 30 minutes of the trading day. During the first 30 minutes I make sure all orders I have entered into my IB and Scottrade platforms execute properly; during the last 30 minutes I do quick scans to make early buys of swing longs and sell disaster stocks like PANL on Friday. If I miss the last 30 minutes of the day, it is no big deal. I will just execute the orders the next morning. It changes nothing, whatsoever, if I am there the last 30 minutes or not.

Ding, ding, ding....so now the market closes. I am at home spending time with my girlfriend, playing poker, or out surfing the beautiful waves of Maui. Either way I still can not do anything with TCNet because the TCNet live or delayed service does not get all the stocks in my scan until the exchanges close all stocks for the trading day. So let's say that right now it is noon on Hawaii (market closes at 11am)--this is the time I will start my IBD scans.

First off: During the past week IBD will makes important stock list: IBD Top Composite 200, IBD 100, Your Weekly Review, Top New Buys of Mutual Funds(monthly), Screen of the Day, CANSLIM select, and of course the daily and most important Where The Big Money is Flowing. These list must be updated always. As soon as a new list is out, I delete the old one and add the stocks in the most recent list.

These list are made separately and put into there own personal watchlist. These list are then combined into one "master list." This is the list that is the most crucial to my stock trading. This "master list" is then sorted by price % change.

I then scroll through this list one by one and when I see a new long I flag it. It is not often, besides the very beginning of a bull market, to find a lot of brand new longs in one day. Therefore it is almost basically a check of my current holdings and gives a great gauge of how leaders are acting in the current market environment. If I do flag a stock I then place it on an order list on IB or place a limit on Scottrade. I don't care if market makers can see my orders. I am not that paranoid. This is a delusion traders have...that the market makers are out for their order. Come on, get real.

After scanning the "master list" and placing the possible orders, it might be around, let's say, 1pm. Time to play poker till 2pm when the TCNet database will be completely updated with all the final stock data from the exchanges. When that is done, I then scan my TCNet easyscans that I have created. You can find what those are by clicking the link below

How I Scan For My Stocks

After that is done, I then place my orders on paper to place in the morning, place the actual market or limit order, or put them on a list to execute when I wake up.

During this whole time scanning for IBD and "my" stocks, I physically write the tickers symbols into a diary and place the price % change behind them. I have been doing that for years, already. So it seemed plausible to start a blog and do two diaries--one online and one off. The hope is that someday this will help me either start a business for myself or get hired by a professional so that I may receive side-income from my trading business.

All of this is normally finished by 4pm if I move very slow and methodically. So there is literally four hours of work and most of the time it is less. This combines monitoring my current positions, taking action on my current holdings according to the charts, scanning the new charts, entering my new orders, and writing my stocks in the book and on this blog.

After that, I can do whatever I want. If I want to read IBD front to back. I DO. And I do that at least three times a week. But no matter what, if I can not read the whole paper because I have been surfing all day, hanging with friends at the beach, doing something wonderful with my girlfriend, or drinking at a bar (take a camera, it is rare), I will read Trends and Innovations, Leaders and Success, New America, and Issues and Insights. If I was forced to read only one section it would be the Issues and Insights section. I have 5 years of Issues and Insights in one of my desk drawers. EVERY SINGLE ONE IS MARKED UP. After living in NYC and Maui for the past 9+ years, Issues and Insights helps keep my mind in great shape. I love this island but the political depth of conversations don't usually get pass the Bush is the devil hate-speech.

So that is how I use IBD. I don't use the charts in the newspaper because I have Daily Graphs Premium and TCNet charts. I just need the list that appear in the "Making Money" section.

I am not sure if that is simple for you, but it is a very simple disciplined strategy for me. I do this everyday, ad naseum. This is the same method I have been using for at least six years. There is always an upgrade or slight downgrade. But I don't think I will deviate from this method for the rest of my trading life. It took about five years to get to this point and for the past six years I have not changed it.

I hope this makes sense. I am not going to proofread this. I am just posting it.

The waves were HUGE HUGE HUGE for a south swell on Friday and Saturday. This is why this post is so late. It is very rare I get huge waves in my backyard. The past two days I had them and I had the time of my life.

LUCKY TO LIVE HAWAII

God bless and Aloha!

See you on Monday

Stocks Bounce On Mixed Volume; What Will The Bears Scare Us With This Weekend?

Markets rallied across the board, as today's reason according to the media was the jobs report. Wonderful. The SP 600 rose 1.2%, the Dow Jones rose .9%, SP 400 rose .7%, the SP 500 rose .7%, and the Nasdaq was up .5%.

Volume was mixed, with the NYSE volume higher than yesterday and the Nasdaq lower than yesterday. The mixed volume is disappointing as you would like to see both indexes rally on HUGE trade, after this selling. That would confirm that maybe the downtrend is coming to an end. But for some reason I doubt this bounce will hold.

The mixed volume on this bounce along with the weak action in leading stocks is concerning. The IBD 100 fell 3.8%. The IBD 100 leads bull and bear markets. And with it leading the indexes to the downside that might portend to lower prices the next week.

The weak action in leading stocks and the indexes should caution new investors to keep buys small. Buying stocks in a weak or sideways markets automatically puts you at a disadvantage, as 3 out of 4 stocks follow the trend of the market.

If I am advising new traders not to purchase new stocks, why am I buying 12 stocks the past two days? The reason is because I have more experience and know that these small and speculative stocks make BIG runs at the beginning and end of market runs. This is the end, not the beginning. The beginning was October 2002. These kind of longs are more volatile and have a higher failure rate than the high quality IBD stocks. Those high quality stocks started breaking out in October. Once again, we are late in the rally and most have cracked. Therefore, my thesis being near the end and not the beginning.

However, there is already a TON of negativity out there and the technical picture has already deteriorated that most of the selling might have been done. This is confirmed by looking at how far down the bulls have come and how far up the bears have gone in the AAII and II surveys. A the same time, I still have tons of current holdings that are holding up fine. But that can change in one day.

It wasn't a good weak overall, probably, for most traders. I did not have a good week but it was not something I need to kill myself over. Giving back some gains after having such a HUGE run from October is only to be expected. Markets can't go up all the time every year in and out. It just isn't healthy. Pullbacks are healthy and set us up for the new leaders.

I can't wait to hear all the scary and disgusting stories the media will come up with this weekend on why the market is ready to crash into Hades. Doom and gloom, baby. Doom and gloom.

Thank God, I live this life and don't have the meaningless existance that these reporters on CNN have. Breaking news, my butt. How many of you guys seen those Saddam Hussein tapes? Anyone? Anyone?

How I use IBD and TCNet coming soon. Before, Sunday, at least.

New Swing Longs: NNI RNT GEMS CVN IIP ICU--To read about these longs go to Investors Paradise and scroll down to Josh Hayes, click on Longs, and go to last page.

Rebuying What I Just Sold: SYKE (original buy 5/10/05)

Adding To Long: STXS

New Swing Shorts: NONE

Longs Outperforming Market: VIMC-42% PAY-37% GRS-94% RATE-112% BBD-131% CIB-35% COGO MEK-61% UHAL-99% RSTI-28% ORA-66% SLW-92% WIRE-138% BEAV-37% ARS-42% ASF-188% KNXA-47% CRDN-57% PETS-149% ATHR-99% MSCC-54% CBG-90% MTU SAY-26% BEAS RUSHA TNOX-31% LSI TWTC-112% MDCC-36% BOOM-346% MORN NNDS BGC-49% CYBS SIRF-122% IHS CHE SURG STMP-33% ICTG-71% PKE CTXS KDN BAM DECK LTM KEX NTAP FFIV SNPS HEIA-31% ALTU PEC RUTH FWLT-56% DMX-40% NDAQ-310% CCUR KNOL-29% EAGL-44% MSPD CDE EVST-40% DB NVAX-26% HOM UBS ADLR-74% IDEV LCC-62% SMSI STEL LIOX BGO-26% STXS PPCO BEL TISA SIM UIC-29% APAC-39% EMKR-98%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: ITRI EVVV HTI VNT OYOG FRD

Sad Ending To A New Long: PANL--leaving with a 4.5% loss.

Stocks Reverse To Close Near Their LOD; Volume Was Lower Than Day Before

The early rally the markets had going on for it at the start of the day flattened out and major stock indexes closed near their LODs. The Nasdaq fell .8%, 600 fell .4%, 400 fell .5%, 500 fell .5%, DJ-30 fell .3%. The worst indexes were tech related, with the Nasdaq 100 falling .9% and the SOX falling 1.4%. The blame of the day for this selloff was the Dubai Port deal. LOL. If it isn't one thing it is another. Ridiculous.

The good news from this selloff is that volume came in lower across the board. However, with the breadth continuing to stink up the joint that doesn't give much comfort. But not having today be a distribution day is a positive and a negative. We could be going through a slow drip down. This just frustrates market players unlike any crash could.

Defensive stocks rose again while the indexes came down. It is not a great sign for the market when stocks in the Meat Products, Cleaning Products, and Farm Products lead on up and down days like they have been past two days. This along with the constant cracking of leaders should be a cause for concern. If I was a newbie trader or advised new traders, I would recommend NO new long positions be taken at this point. Too many leaders are acting funny, some are breaking down, and few good charts with quality leadership traits are showing up.

Another negative is the negative divergences in indicators that are showing up in my index charts. TSV, moneystream, and other volume indicators are showing negative divergences. This is not bullish.

It is not like stocks are getting killed but the tone is so negative that finally the weight of the bears is leaving its obvious marks on stocks and the indexes. It looks more like the bulls are willing to sell upticks instead of buy downticks. Like I said that slow drip approach is harder to deal with and act on than a quick crash. It is just harder to predict a bounce when markets are acting like this.

After all the churning in the indexes this year (just look at a daily chart), the indexes are finally starting to get some momentum to the downside. However, despite all that churning and weak recent price action, it is hard to say the market has further to go to the downside.

The put/call ratio is climbing getting near that magical 1.0 closing mark. That along with the higher number of bears and lower number of bulls in both the AAII survey and the II survey says that most traders have gotten bearish already. If that is the case you would think their selling has already been done. If it hasn't then obviously the bull/bear line can cross. The last time it did that was in March 2003 which was the launch for the current rally we have had and may be coming near the end of.

The SP 500, Dow, and Nasdaq are now in short term and sub-intermediate term downtrends.

Keep a smile on your face and stay positive. Bad markets are a necessity for better markets in the future. Good luck out there. We need it.

New Swing Longs: SCVL ECOL IMMR TISA BEL--To learn more about these go to InvestorsParadise and scroll down to the Professional link to Josh Hayes.

Adding To Long/Repurchasing: LIOX

New Swing Shorts: NONE

Longs Outperforming Market: RATE-103% ERS-144% ORA-61% VTS COGO SURG VIMC BLD-40% TMI CRDN-53% BEAS KEYS-44% ICTG-70% SCHK-25% NGPS WIRE-131% BEAV-33% LCRD-88% DECK XRTX KDN BOOM-341% RAIL-59% PETS-144% TWTC-109% LTM WDHD SAY NVDA-61% IHS RSTI SLAB SLW-86% CHE ALTU PEC SSW SMDI-67% LIOX HOM GBN-26% STXN-53% IMOS NENG NDAQ-271% ROK KNOL IT JDSU-58% BGO-26% STEL RUSHA NTO-26% MTU TFR-53% APAC

Shorts Outperforming Market: NONE

Stocks On Radar Screen: NONE

Disappointing Endings: BNT DIET. Still leaving both with gains but oh how the old gains went away in DIET. Truely a sad ending. Oh well. Time to move on.

Stocks Rally, Intraday, On Heavier Volume To Close Pretty Much Unchanged

Stocks spent the morning selling off, before a noon reversal that helped the indexes close in the upper portion of their daily range. The SP 600 finished up .09%, SP 400 up .07%, the Dow and SP 500 up .2%, and the Nasdaq was down .04%.

Volume was higher on all the indexes. The higher volume is a good thing to see as the markets test their 50 dma. Bouncing here on good volume is a positive for bulls. The higher volume, today, came after the market started to rally. That shows that institutions stepped in to buy stocks after not selling or supporting them in the early hours today.

However, the stocks that they decided to buy are not the stocks you would expect them to buy if the markets were really bullish. Tobacco, Hospitals, Drug Delivery, Drug Stores, and Personal Products are not the most "innovating" groups. Biotechnology is the only one "hot" group that got any respect in the midday reversal.

I don't know if that is bad, good, or just nothing to care about. What I do know is I still have plenty of stocks pulling back on very light volume that still are holding very well. At the same time I have had to sell some stocks that have pulled back too much but yet have not given an outright SELL SELL SELL signal. So I don't call this market good or bad while we chop. It just is what it is.

With that I still recommend reading my last 10 or so post to know where we are at. Tomorrow will probably be a repeat of the same blame of the day story. Bond market, bond market, bond market. I can't wait till we find something else to blame.

The people at CNBC should run this story tomorrow if the markets go up: "Stocks close up as Mr. Hayes watches his roomba robot vacuum the carpet. The robot brought a smile to the face of Mr. Hayes because he actually talked to it. The happiness spilled over to the Nasdaq and the NYSE as stocks rose across the board."

In all seriousness, the "reason" they tell you why the markets rose or fell has or had nothing to do with the real reason stocks rose or fell. Only a major natural disaster or a tragic unexpected terrorist attack by nut jobs can effect stocks.

The truth is the traders have known about this yield curve and have had the same economic data to look at the past three weeks. Not a whole lot has changed, except the media tells us that the inverted yield curve is now bad or good or bad?! I would be so confused if I was a newbie in this market environment and did not have the proper tools like IBD and TC2005.

Great luck tomorrow. I don't know what is going to happen. However, I don't need to know.

I was just in my chatroom and was telling a good friend of mine how I see weakness. Here is what was said:

SF: yes
SF: this feels and looks odd
SF: my positions getting weak
SF: around 1/2 are at very key points technically
SF: the problem is so many charts still look good or ok
SF: it is the long term winners that are getting hit
SF: and some of the *** fundamentals stocks
SF: also not good
SF: the semi action has sputtered out
SF: The hot money and speculative money is leaving
V: yep
V: ive made some cuts
SF: me to
SF: I am basically neutral on this market right now
SF: but there appears to be a real reason to be concerned
SF: but maybe the support holds
SF: and stocks rally one more time
SF: but look at MRVL and DIOD
SF: two leaders in a hot sector
SF: AAPL and NWRE
SF: two more hot leaders in another tech sector
SF: look at gold leaders ERS KGC NEM
SF: look at long term winners
SF: GMXR and RES
V: yea
V: and I am seeing more breakdowns




New Swing Longs: NHWK VLTR

New Swing Shorts: NONE

Longs Outperforming Market: SURG MEK-58% CIB-34% CLZR-29% BNT-35% ICTG-66% KNXA-44% EFII LCRD-85% PNRG-39% LTM CTEC WDHD ARS-40% ATHR-98% VTS SLAB CHE KDN HSKA-28% BGC-50% BEAS ASVI VIMC PETS-141% BAM VLG NTAP NNDS NGPS TWTC-107% MMK-31% FWLT-59% WBMD RUTH NYX-30% ELN-44% NENG JDSU-56% STEL GNBT-44% FLML BWNG-95% MNG-119% BKHM-58% VRTX-202% RBAK-152% Q-40% CCI-70% CVO-74% TXI SPSX UHAL-95% TFR-44% DSGX-41%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: WEBX NOK

disappointing Ending To A Great Long: DESC. Sold final amount with 79% gain.

Stocks Sell Off Again, As Volume Decreases From Yesterdays Levels; Top Stocks Take Some Big Hits

Major markets fell (except the Dow) as the bond market was, again, the blame of the day. The Nasdaq fell .8%, SP 500 fell .2%, SP 400 fell 1.2%, SP 600 fell 1.2%, Nasdaq 100 fell .5%, and the Dow gained .2% on Tuesday's trading session.

Volume was lower on the Nasdaq and about unchanged on the NYSE. The lower volume, however, gives no comfort to the Adv/Dec line as the ratio of down stocks to up stocks was 3 to 1. A very negative reading for the indexes being down so little.

The big hit was to the leaders. The IBD 100 took a 2.3% hit and the Semiconductor Index took a bigger 2.9% rocking. The SOX also broke down through its 50 dma. This isn't the healthiest action, since the leaders from October have been the chips.

To go along with the stocks in the Semi group, every other leader it seemed got hit today in all of my IBD stock list. If you have IBD or have anything that can look at top stocks with fundamentals and technicals you can see they performed very poorly today. This might be a red flag for further weakness as leading stocks lead both bull markets and bear markets in their respective direction.

But all of this is just just-in-case stuff. We have to be prepared for further weakness if it shows up. But I don't think there would be too much further to go if we do start selling off. The fact that the bears have been rising and the bulls decreasing in surveys for the past seven weeks should offer some comfort to the bulls. However, no one says that the number of newsletter writers bearish can get higher than the number that are bullish. If the indexes drop 10% from these levels you can be sure the numbers bullish and bearish will criss cross.

How are my stocks doing? Fine. There were some vicious pullbacks in some stocks but I have been lucky and selling into extreme strength on most of my long term winners and stocks that shot up huge in a short amount of time (RBAK VRTX MEK) that the selling I did was pretty normal today. I have raised some cash from these sells and will raise more tomorrow on stocks that don't pass the 50 dma test, as there are not a lot of good new stocks showing up on my scans.

I am long a lot of stocks right now that are at the moment of truth at support or their 50 dmas. The next few days will be pretty important for these. If they bounce, the rally is good. If they crack, then we may have a problem.

All short term trends are now down on all indexes. The indexes are still in long term and intermediate term uptrends. And the sub-intermediate trends are up to sideways on all indexes.

Stay positive and don't let the bears get to you. You will live a longer, happier, and healthier life if you stay positive during this rough patch. Trust me; do you know any really HAPPY bears? Honestly, do you?

New Swing Longs: CTEC

New Swing Shorts: NONE

Longs Outperforming Market: LSI ATHR-95% VIMC KEYS-42% LTM HEIA-33% KNXA-41% SCHK PKE MFLX-199% RUTH SWW CVO-74% CONR LCRD-82% STEL AKN TWTC-107% RCNI RDCM-51% HSKA-28%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: NHWK PENN EONC NXXI

Disasters Of The Day: LIFC--one day reversal for a 7% loss, ugly base. ZVXI--50dma breach, 17% loss, ZVXI had a 200% profit potential measured move so I gave myself a 20% cut loss on it. So to me the only real disaster was LIFC.

Major Indexes End Red As Stocks Reversed In The Afternoon; Volume Was Mixed

Stocks closed lower today as this time the yield curve going flat instead of inverted scared traders. LOL. If it isn't one thing it is another. I thought three weeks ago a inverted yield curve was a bad thing and today the media says it reversing and going flat is now bad. Whatever. LOL.

The SP 600 fell 1.1%, SP 400 1%, SP 500 .7%, and the Nasdaq .7%. The selling was higher on the NYSE giving it its second distribution day in a week. The volume on the Nasdaq came in lower as decliners beat advancers 5 to 4. The increase in trading on the NYSE might have been skewed by the ATT and SBC deal. Whatever the reason or cause, it was still higher and is still a distribution day.

The markets continue to look like they are either churning or basing on heavy volume. Whatever it is doing it is best to just be patient and wait for the indexes to make a move instead of trying to predict where it will go. Either way, the back and forth action has the feel that the market doesn't want to go anywhere any time soon.

In saying that, however, the SP500, Nasdaq, SP 400, SP 600, and the Dow Jones are just 1-2% off of their highs. With all this bearish news for the markets to deal with, only being down 1-2% is incredible. To go along with only being down that little, the II survey of bull/bear newsletters has been going in the right direction for seven straight weeks.

My stocks continue to pullback normally and I only did some minor selling on positions that have been big winners (RBAK-200%) or non-performers (DMC-50 dma failure, 6% loss).

So today has not really changed much with the overall market situation. The indexes are still in uptrends or sideways patterns and the selling today did not do much damage that. Therefore, to get a more solid feel for the market I would read the past week or two of my market commentary to get a more solid feel for where this market has been and where it could be headed.

Great luck this week. It should be choppy!


New Swing Longs: LIFC NANX IONA

New Swing Shorts: NONE

Longs Outperforming Market: PNRG-40% BLD-40% MFLX-199% TRAD-69% COGO ERS-145% WIRE-139% VIMC NEWP KEYS-40% KNXA-40% MEK-65% KDN MORN STMP-35% ICTG-65% PETS-151% BOOM-366% RVSN-33% RAIL-72% MDCC-40% OXPS-84% SNPS NNDS-25% MMK-39% QCC ALTU RUTH SSW BWNG-103% NVAX-27% BKHM-59% DIET-53% REGN-60% AGT ZL-35% ESLR-138% NENG TWTC-105% Q-50% CCUR BFT CYBS RDCM-50% TNOX-30% MTZ EFJI OPLK CUP RUSHA EDS SIM CAMT MDM-28% WDHD

Shorts Outperforming Market: NONE

Stocks On Radar Screen: MEND IVAN PT BWEB

Market Ends Week With A Last Hour Reversal; A Good Week, Overall

With Intel being the blame of the day, stocks reversed in the last hour leaving all the major indexes in the red. The Nasdaq was down .4%, the Semiconductor Index 1.6%, SP 500 .1%, SP 600 .3%, SP 400 .3%, Nasdaq 100 .5%, and the Dow Jones closed down .04%

Volume picked up on the Nasdaq, giving the index its second distribution day in the week. The volume on the NYSE was lower, relieving some pressure from the late day selling on the Nasdaq. Decliners beat advancers by a 9 to 7 ratio. But overall most stocks that declined did so quite orderly.

There was plenty of mixed feelings this week among buyers and sellers causing the markets direction to be quite confusing for the majority of traders. Though the markets may seem confusing there is still no broad based selling to worry about yet. As long as the market can shake this recent small selling off and keep rallying all will be fine. However, if we see some more distribution days step up I am afraid we will be in for more sideways action. I would think selling would bring out sideways action instead of a drop, due to the bearishness increasing and the bullishness decreasing for the past seven weeks.

So while there were tons of negatives, the market didn't crack. That can only be taken as bullish for stocks. Speaking of stocks--almost all of my longs had normal pullbacks on Friday and continue to act healthy (except for NOVL!)

Stay motivated, disciplined, and alert in this kind of market environment. It can be draining, confusing, and frustrating at times but the only way to plow through is by doing the former so to cope with the latter.

See you on Monday!

New Swing Longs: NEWP SSW NERX SIM

New Swing Shorts: NONE

Longs Outperforming Market: PAY-40% CRDN-77% BLD-34% TMI-26% PNRG-28% HEIA-34% GRS-116% TRCI CBG-97% OXPS-83% NGPS WIRE-134% EFII STX-33% IHS-28% RSTI-33% NNDS-25% ORA-69% FFIV KEX ADBE ICTG-64% TRAD-63% GOL-66% NVDA-64% MSCC-72% CKCM BEAS VLG SLW-102% SCHK-25% SLAB COGO ECLP IKAN-37% DRH MMK-25% FWLT-68% ALTU SEED PEC AKS BWNG-78% RNAI-51% HOMS-36% NENG SILC-132% MNG-133% JDSU-54% TSCM-69% RBAK-210% GNBT-96% TGE NTO-36% ACTG-30% TWTC-97% EFJI GNA CNXT-50% RADS CONR VTSS IED-81% SMSI AMKR-27% AKN TRO BGO-42% AUY-102% STTS STAA ENMC AX CVO-71% UBS NVAX CHRD PANL HSKA-25% BVX SWW

Shorts Outperforming Market: NONE

Stocks On Radar Screen: MLP FNET HEB LVLT ACUS LNUX ALA PT GSOL

Disaster Of The Day: NOVL--This sucked. This chart was so so so pretty. This really is disappointing. Selling remaining 80% stake at a 7% gain. The 7% gain was a 29% gain the day before.

Markets Find Support and Consolidate Yesterday's Gains

The major stock market indexes held their gains on Thursday, staging a nice intraday reversal across the board. Bouncing off their intraday lows, the Nasdaq finished down .15%, SP 500 .15%, Nasdaq 100 .05%, SP 400 .36%, and the Semiconductor index bucked the trend closing up .08%.

Volume was lower on the Nasdaq, showing that the index was consolidating gains on quiet volume. However, NYSE trade rose. The rise in volume should not be of concerned as the SP 500 staged the biggest intraday reversal to barely close down .2%. With that kind of daily candlestick pattern, there is no way to call this a distribution day, even with the poor breadth.

Semiconductor, Technology, Internet stocks showed some strength today, while retailers disappointed Wall Street. The real winners today were again Oil and Gold. What is new there?

It would be nice for the markets to consolidate for a while right here. A week or two of sideways action would be a welcome sign to see. That would set up some sweet bases or launching pads for some of these tech stocks. It could also set up a failed breakout.

But with so many things to worry about--interest rates, yield curve, geopolitics, nuclear weapons, oil, natural disasters, hunting accidents, port deals, poor retail sales, and jobless claim numbers--I am sure the markets will find a way to climb that wall of worry.

The only thing I am worried about is if Sansei's is going to have enough Panko Crusted Ahi for me to eat tonight. Last time I went they ran out! Do you know how delicious this dish is???? It is the best!!!!

New Swing Longs: STNR AKN NENG BVX. For reasons behind the longs go to Investors Paradise.

New Swing Shorts: NONE

Longs Outperforming Market: MEK-82% SLW-102% TMI GRS-112% BEAS WIRE-130% CIB-44% ASTE HEIA-30% ORA-68% SNPS KNXA-40% ASF-193% XRTX-35% STX-31% OXPS-80% MORN PNRG-25% BGC-56% ARS-43% FFIV NGPS STMP-37% BOOM-363% CLZR-40% TRAD-62% CBG-94% KEYS-42% RSTI-31% KLIC-34% SAY-35% PKE VIMC PETS-152% NVDA-63% NTAP ATHR-91% MMK ALTU FWLT-64% IKAN-32% DRH AAU PEC MONE MRB-96% JDSU-45% BGO-40% KGC-34% NTO-31% CDE NXG-69% RBAK-193% FDRY TWTC-90% LJPC STKL NRPH-105% MTZ GSL Q-43% CVO-71% TNOX-29% AX ARXX CONR AUY-99% SBAC-39% EDS VTSS MNTA GNA RNAI-32% UBS MNST-45% ZEUS-33% PANL RCNI TBH MDM-26% ATRM SWW

Shorts Outperforming Market: NONE

Stocks On Radar Screen: RSAS CETV DXCM GEMS

Blowup Of The Day: NSTK--No big deal. Look at January 20th. Do you see how it closes below the 50 dma and below the close of the day I took it? If you did then you know I did not have a lot of this stock. I have sold the rest with another 7% loss. No big deal. Did you see MEK SLW MMK today? All is good, baby!

Techs Help Nasdaq Rally Big On Heavier Volume; Stocks Rise Across The Board

Stocks rallied across the board today, with the Semiconductor and Technology stocks leading. The Semi Index closed up 4.3%, Nasdaq 100 was up 1.4%, Nasdaq up 1.5%, SP 400 up 1.5%, the SP 600 up 1.4%, SP 500 up .8%, and the Dow up .5%.

Volume came in higher on the Nasdaq, while it was below yesterday's level on the NYSE. The higher volume on the Nasdaq along with the price gains helped erase the down session yesterday from the minds of the technology bulls. The price gains on higher volume came with strong breadth, with advancers beating decliners by 2 to 1 margin.

A distribution day here and there on the indexes as they rally are normal. It is how they react afterwards that count. With the Nasdaq and NYSE bouncing on good breadth that brings good news to the bulls who are hoping for higher prices. If we get more in the coming days then we can worry. But for now today was very bullish on the short term.

Telecoms, Foreign Banks, Bio, Tech, Chips, and Retail are helping lead this rally higher as a rotation appears to be underway into technology stocks. Besides, did you see CSCO today? If that isn't proof we are having a tech rally, I dont know what else is.

Another postive for this rally is that the II survery of bullish/bearish newsletter writers came out today with bulls dropping and bears rising for the seventh week in a row. This is very bullish as the market is rising while bears are increasing. Eventually, they will have to cover and that will help create more momentum to the upside. Markets like to climb that wall of worry the bears create. And right now they are whipping up a thick bearish wall.

I am staying long while all of these good charts continue to act well and keep offering me new longs to buy. The bears did not even really hurt my charts last night so it is obvious the weakness that is in the market is not very broad. After today's rally most stocks I own are even or higher than they were before the opening yesterday.

The markets have that back and forth feel with upside momentum behind it. Yet if we want I can find some bearish arguments that are legitimate. The Dow and SP are still both in a short term and sub intermediate term downtrend, The Nasdaq is still not a new highs, and the markets are overbought short term. But if that is the "facts" side of the bears argument, they will have to do better than that.

Great luck tomorrow. Go get em!

New Swing Longs: OVTI CAMT ISV STTS CYBS WDHD APTI. For more on these longs and previous longs please go to Investors Paradise.

New Swing Shorts: NONE

Longs Outperforming Market: ATHR-91% SIRF-158% GRS-103% ANAD-113% WIRE-123% ASF-187% CBG-92% KLIC-33% PAY-32% BBD-161% SAY-35% VIMC NVDA-63% BGC-54% ERS-151% SURG NTAP PNRG XRTX-33% KEYS-41% SLW-80% STX-29% MSCC-73% TRAD-61% PETS-151% SCHK-28% MDCC-41% UEPS MFLX-189% BAM RVSN-34% LSI KEX RATE-110% CIB-40% PKE IHS-29% LTM GOL-76% ORA-63% BNT-41% ECLP ARS-41% STMP-35% HEIA-27% BEAV-37% CRDN-74% ASVI-26% TMI NNDS-25% SNPS CHE NGPS COGO MEK-31% MTU FFIV ALTU MMK DRH SPWR-59% SXC KNXA-37% MNG-123% CNXT-51% NSTK-49% AMKR-26% DECK PANL BKHM-33% CCUR BTUI-93% SLAB GNA GNBT-63% BWNG-47% FDRY JDSU-32% ALKS-34% EFII LRCX-32% AX DMX-35% CVO-67% TBH BGO-30% MU ESLR-127% MT TNOX-26% EMAG ZEUS-32% VRTX-231% SPSX-30% MNST-45% TWTC-82% EVST-39% CTXS-25% UBS LWSN STXN-57% TGE CHRD TFSM STXS RNAI-31% SBAC-37% RDCM-51% SPNC-71% RUSHA KDN ATRM DSGX-46% SWW MDM BLD-32% SMF

Shorts Outperforming Market: NONE

Stocks On Radar Screen: MRVC GEMS COSI ZL DXCM LUB MNKD CSH GNTA LBIX AKN

Markets Suffer Nasty Distribution Day; Still Holding Above Their 50 Day Moving Averages

Stocks sold off pretty hard today as GOOG and a spate of bad economic data was the blame of the day. The SP 600 fell 1.9%, Nasdaq 1.1%, SP 400 fell 1.1%, SP 500 1%, and the Dow Jones .9%. The selloff came on heavy volume and very poor breadth. The volume was well above the 50 day volume average, adding to the losses.

This was the worst day for the markets since January 20th and the first distribution day since the Dow Jones followed through on Valentines day. The selloff today helped turn most trends in the indexes down to sideways for the sub-intermediate and short term time frames I trade on.

The stock market could be going under a rotation from the oil group into the technology group, as I still have plenty of stocks in the technology and bio groups that are holding up well after today. I did take some small hits here and there but overall the pullbacks were quiet and normal looking.

We have to see if this is a one day event that will have buyers snap up shares tomorrow or if we are setting up for the rollover from all the churning this year. If you look at the Nasdaq you will see that we have had plenty of trading days with volume well above average and yet we are going nowhere. This is either a high volume consolodation or churning. My guess is it is churning.

But market traders are looking for anything that remotely looks like bad news to sell stocks and they seem quite nervous and bearish. This amount of pessimism would actually be contrarian and would set us up for even more highs. And that is not out of the question at all, with the way the bears and liberal media are acting. With the bears pouncing on the day so hard it could lead to a bounce.

So even though the indexes look like churning to me (I have said this before; search the blog), I simply hear to much bearishness and see too many good charts still to switch sides.

We shall see what the markets do tomorrow. Be ready for a rally and be ready for a selloff. That is the only way to be happy and positioned correctly no matter what the outcome is.

Great luck out there!

New Swing Longs: STAA MONE

New Swing Shorts: NONE

Longs Outperforming Market: BOOM-362% CRDN-72% MORN ERS-142% SLW-77% STX-26% SIRF-135% KEX MFLX-184% PAY-26% WIRE-112% MTU SCHK KEYS-38% MEK-31% RATE-107% ATHR-70% RAIL-74% QCC MMK SPWR-59% SEED SXC KNXA-37% DRH EVST-36% ANX-43% CLG-70% AGT DMX-30% SNG ESLR-121% LRCX-27% RNAI-30% TWTC-79% NVAX-28% MNG-98% LEND SPSX-27% ADLR-84% BEAS CTXS TNOX VTS AMKR DSGX-39%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: CREE CEGE BRKS DXCM

Blowup Of The Day: HSP -- I am going to leave with a 12% profit on the remaining position. Original buy date was in mid May.

Markets Rally, On Higher Volume; Wall Of Worry Proves Easy To Climb For Stocks.

Stocks rallied across the board, again, with the Nasdaq 100 leading. The Nasdaq 100 was up 1.1%, Nasdaq was up .9%, SP 500 up .4%, Dow up .3%, SP 600 up .3%, and the SP 400 up .2%. Volume came in higher, marking another accumulation day, but it was still below the 50 day volume average. So there was not a lot of oomph in the move higher.

The low volume appears to be caused by a lack of sellers instead of a lack of buyers. I see this by looking at how easy it is for the markets to rally higher. The market is getting blasted by negative headlines everywhere yet keeps marching along. That is very bullish and is throwing a monkey wrench into the perma bears thesis of how and why this market should have crashed by now.

There are plenty of bears out there by looking at how much the bulls came down and bears rose in the most recent Investors Intelligence survey. That along with the increase in cash position of mutual funds shows there is plenty of money on the sidelines these investors will have to deploy once they either realize they are wrong or feel the pressure from lagging their peers performance.

The wall of worry is setup for the markets to climb to more new highs. The SP 600, SP 400, and NYSE are at all time highs, yet the past three years have been dominated by bad economic news. This economy gets no love except from those smart enough to block out that bad information.

We shall see what the rest of the week brings.

All trends are up. No more sideways or downtrends on any time frames for the Dow, SP 400, 500, 600 and the Nasdaq.

New Swing Longs: HOM AP AGT

New Swing Shorts: NONE

Longs Outperforming Market: MFLX-180% CLZR-45% BNT-45% GOL-81% NVDA-58% ATHR-70% STMP-37% RVSN-37% MTU ERS-134% NTAP SCHK ASF-182% SAY-31% TRAD-63% FFIV LSI ECLP BBD-153% CBG-91% STX MORN PETS-153% MSCC-71% RAIL-74% KEX CHE ASVI-28% XRTX-32% TMI KEYS-37% MEK-30% LTM SIRF-132% SPWR-55% MMK SEED KNXA-36% ALTU PEC DRH RNAI-28% NVAX-26% ALKS-35% REGN-56% DMX-26% SMSI GNBT-68% BCRX-162% AX SPNC-71% NSTK-40% FLML CTXS CLG-60% PPCO-30% VTSS HOMS-31% BEAS MNST-43% PEIX ARXX DEPO MNG-96% STKL RADS VRTX-232% A KDN BGC-56% LWSN ING RUSHA DECK KNOL-27% BAM STD RSTI-32% ENMC SILC-125% ICTG-64% ZVXI BLD-27% HEIA-27% APAC-25% AUXL AMPL

Shorts Outperforming Market: NONE

Stocks On Radar Screen: GNTA HA STTS PPHM AVII MAGS

Markets End A Positive Week With A Quiet Friday

Markets finished an exciting week with modest gains as markets continue to defy the will of the bears. The Nasdaq rose .3%, SP 500 .1%, SP 600 .5%, SP 400 .4%, IBD 100 .6%, and the Dow actually bucked the trend and closed down .07%.

Volume did come in lower across the board but breadth was decisively positive on the NYSE and Nasdaq. That along with the new highs trouncing the new lows by a wide margin gives the feeling of a stronger rally today than what the closing figures tell.

You would think the world was ending, with all the negative news out there. Nigeria, Iran, Iraq, Saudi Arabia, UAE, and a partridge in a pear tree. All of it was fair game for the media this week. But what wasn't fair game was the spin they always give and why it will entail lower stock prices.

Here is the real spin: The markets are doing great and have been for three years. We are in a bull market now and have been the entire time. No matter how smart the bears argue their side of the story the facts remain the same. Stocks keep moving higher and higher and higher.

The long side is still working like gold. I take some small hits but when stocks work they REALLY WORK. Until that changes I see no reason whatsoever to listen to the genius bears. I don't have millions of dollars to throw away on the short side just because I "believe" the market is going lower. So until the market starts going lower, I will continue to load up on longs that create and breakout of wonderful chart patterns.

So you can believe the markets suck just because the media wants to see the USA fail in Iraq. But I will never believe that crap! Civil War? Is this what they are rooting for? The left wing commie pessimistic media is a joke. If you think you can make money off jokesters, fine. If you want to learn how to trade and make a great success of yourself in this greatest nation on God's green Earth then that is what I am here for. The choice is yours.

Watch the charts and read the companies financials and that will tell you all you need to know.

Have a great weekend! Surfs up!!

New Swing Longs: ENMC MTU AAU ALTU AUXL

To see explanation of longs, go to InvestorsParadise
Scroll down to Professional Resources and enter the Investing tab.

Additional Buy To Existing Swing Longs: TRCI

New Swing Shorts: NONE

Longs Outperforming Market: SLW-77% PETS-150% MEK-30% ORA-59% MFLX-162% FFIV TRCI TRO RAIL-72% VRTX-224% UEPS OXPS-85% BNT-37% SURG CLZR-38% PNRG COGO-25% SBAC-38% NGPS ERS-127% XRTX-31% KNXA-33% ADLR-78% BBD-148% SLAB ASTE-27% TRAD-59% AXE-28% LSI VSEC ARS-44% GRS-97% CIB-39% CBG-87% PKE CRDN-65% CHE KEYS-37% JBL RUSHA STX MDCC-45% IKAN-35% MSCC-69% KEX BEAV-41% VIMC LTM AKAM-69% SPWR-43% FWLT-70% QCC MMK PEC RUTH GNBT-57% CONR RDCM-53% MRB-82% STXS CLG-54% CPST DESC-167% NTO-26% DEZ-172% NXG-62% REGN-42% PEIX PANL HOMS-27% KDN MTRX-39% NVAX CHINA TTEK DEPO SPSX-31% NDAQ-286% KNDL-26% NSTK-34% IED-80% BWNG-44% BEAS BAM ACTG-28% RSTI-31% GSIG IDEV EVST ICTG-54% SMF HEIA FC TBH

Stocks On Radar Screen: CLMT JOBS COR HEB

Long Term Winner Getting Crushed: SVR--Seven days ago I was sitting on a 67% gain. After today I am leaving with a 9% gain. That is what we call a "bad beat." It happens. Keep fighting!

Late-day Selloff Has Markets End The Day In The Red

A late day selloff in the final 30 minutes caused the markets to close down across the board. The markets were all lower, with the Nasdaq down .2%, SP 500 down .4%, SP 400 down .3%, SP 600 down .2%, and the DOW leading the way with a .6% loss.

Volume did come in lower across the board, indicating institutions were not dumping shares after the rally. Instead the markets continue to rally, however small, on volume then pullback on lower volume. That is a good sign for the health of this market. Overall, a normal pullback on another crazy day on Wall Street.

More stocks showed up on my screen today that are breaking out of very sound chart patterns. That along with the leaders still holding firm and new highs troucning new lows on the indexes shows the markets underneath bullish bias.

I am still bullish on the overall market, following the follow through by the Dow Jones Industrial average and would like to thank the media for creating that bearish backdrop that helps stocks climb the wall of worry. Investors Intelligence numbers came way down yesterday, as I posted on my blog, and that makes me feel even more confident that this market should have legs.

Either way at the same time I know momentum is slowing but it has not slowed yet. Until it does, ride the trend. The trend is your friend and the trend is up. Please, read my last 3 post to fully understand where I stand on the current market situation.

Stay disciplined and great luck out there!!

New Swing Longs: DECK PANL SEED GNA STXS A ATRM CHRK. For more information on these longs go to InvestorsParadise

Scroll down to professionals and click on Josh Hayes. There you will see the thread "longs." Scroll down and have a look.

New Swing Shorts: NONE

Longs Outperforming Market: VRTX-212% MEK LCC-69% CKCM NNDS-27% ORA-52% TRCI ATHR-68% CRDN-63% SAY-28% LCRD-75% STMP-32% PETS-136% FFIV CHE PKE CIB-37% KNXA-29% MDCC-44% WIRE-110% KEX SURG TMI KLIC-33% ADBE VIMC SPWR-39% FWLT-67% QCC PEC UEPS IED-77% ECLP KNOL HOMS STKL AMKR TSCM-65% BWNG-42% ARBA BEAS MT NOVL-32% TXI AX GSIG GRS-94% MRB-65% AKS ASTE MNG-83% RITA IDEV RADS JDSU BAM HSP-34% DB MEL RSTI-30% RDCM-38% ICTG-43% BLD SMF

Shorts Outperforming Market: NONE

Stocks On Radar Screen: ALTU CCO

Markets Rally On Higher Volume; NYSE Makes Another All-Time High

Stocks rallied across the board, with the Nasdaq up .9%, Nasdaq 100 1.3%, SP 600 .8%, SP 400 .9%, SP 500 .75%, and the NYSE up .56%. Volume was higher across the board, however it was still lower than the 50 day volume average. So that put a damper on the higher trade.

Financials and Generic Drugs helped lead the SP 500 to 4 1/2 year highs and the NYSE to all-time highs. The indexes ability to hit new highs was impressive considering how poorly oil stocks performed. The oil stocks have increasingly become a larger representative on the indexes and the ability of the indexes to close higher shows that there are other stocks taking a leadership role away from energy stocks. That can only be positive for the markets.

Leading growth stocks continue to act well, moving higher and bouncing off key moving averages and support levels. However, a lack of stocks showing up on my scans has me wondering if the momentum is slowing. With some long term winners giving me clear final profit taking signals (GES LDSH), along with other long term winners I have been selling the past month, it appears new leadership will have to take form soon or we might face a possible end to the rally. All things need to be taken into consideration here.

Another positive for the bulls case is the newly released Investors Intelligent survey. It came in with 45% bulls and 29% bears. The bulls came in lower than last week and the bears came in higher than last week. However, the market has rallied. This is a positive for the bulls as this gives us the wall of worry we need for markets to climb. If people are shorting the market while it is rallying, they will eventually have to cover into a rising tape and that only causes prices to rise more.

So there is not much to add to this that I have not said in the previous two post. I would re-read those two post to refresh yourself on where we stand currently.

Ignore the news that is knocking this market around and follow and invest with the trend. Good luck tomorrow!

New Swing Longs: AX

New Swing Shorts: NONE

Longs Outperforming Market: NNDS RAIL-68% LCC-64% OXPS-79% IHS-38% CIB-36% TMI GOL-80% KEYS-37% CRDN-61% BEAV-41% SLAB TRAD-58% CBG-85% ADBE BOOM-352% KEX CHE FFIV MSCC-69% MDCC-43% XRTX-31% ARS-44% RVSN-33% STMP-31% CLZR-37% KNXA-29% MORN RUSHA TRO ATHR-66% SCHK-29% KLIC-33% IKAN-38% AXE-26% RUTH MEK SXC QCC UEPS DRH SPWR-35% DEZ-150% AMKR MNG-79% RNAI ACTG-29% TSCM-57% SIRF-132% RADN-27% CDE SMSI BFT MEL TNE STD BKUNA RSTI-29% ECLP MMUS BTUI-104% ZEUS-37% IT SBAC-36% NRPH-95% DB LSI MU ANAD-112% STKL UBS ASTE CCI-73% IED-52% BE DA BGC-49% EDS IDEV MSPD FC DCO DMX ALKS NKTR ADLR-73% CCUR ARBA VTRU MEDX HPOL TBH PEIX

Shorts Outperforming Market: NONE

Stocks On Radar Screen: KEYW XNPT

Blowup: LCAV--I will be leaving with only a 7% loss, after my Jan 12th purchase. This is why it is so important to buy correctly and not chase stocks. If you bought this stock yesterday you would be sitting on one smart loss. By buying right, I am getting out of this stock with a pretty good cut loss. It happens. Just like yesterday. Do a "disaster de jour" or "disaster of the day" search on my blog. There have been others.

Markets Pullback Across The Board On Lower Volume

Buyers stepped aside today allowing stock market averages to fall across the board. The Semiconductor Index led the way falling 2.2%, the Nasdaq 100 fell 1.2%, the Nasdaq fell .8%, and the SP 500 and 600 fell .3%.

Volume fell across the board as well, indicating funds were not unloading stocks. The past two down days have come on lower volume, which is what you like to see after a follow through by one of the indexes.

The current rally is showing a lack of conviction and it is kind of hard to tell which way this market wants to go. But top stocks with strong fundamentals and technicals have been acting well so that tends to confirm the underlying strength in the market.

That along with my stocks acting well and the indexes mainly holding above their 50 day moving averages has me leaning to the bullish side.

Occasional big hits have happened here and there (today CNTF) but most stocks that have sold off have done so after giving me either large gains or plenty of warning signals to take profits or cut losses. Selling down most of my big winners in February really helped me lock in most gains in stocks like RES BNT MIDD before I had to sell the rest.

So with that we move on to Wednesday's trading. I am going to list the current trends of the market as I see them on the indexes so you know where I stand with the trends. Great luck out there!

SP 400 and 600 -- Long term: Up, Intermediate: Up, Sub-Intermediate: Down, Short term: Up

SP 500 -- Long term: Up, Intermediate: Up, Sub-Intermediate: Sideways, Short term: Up

Nasdaq -- Long term: Up, Intermediate: Up, Sub-Intermediate: Down, Short term: Down

Dow Jones -- All trends: Up

Philly SOX -- Long term: Up, Intermediate: Up, Sub-Intermediate: Down, Short term: Down

Nasdaq 100 -- Long term: Up, Int.: Up, Sub-Intermediate: Down, Short term: Down. Trading below 50 dma.

NYSE: Long term: Up, Intermediate: Up, Sub-Intermediate: Sideways, Short term: Up

New Swing Longs: STKL SMF DCO

Additional Purchase Of Current Longs: CHINA

New Swing Shorts: NONE

Longs Outperforming Market: COGO-28% BOOM-344% PNRG ERS-136% CLZR-35% CKCM ARS-42% ASVI-31% LDSH-46% GMXR-215% PETS-145% MFLX-168% AIX IHS-34% RAIL-62% KEX NNDS STMP-30% ADBE ASF-179% SCHK-28% TRCI WIRE-115% ORA-51% BBD-154% CIB-32% CHE RUSHA MEK MMK QCC ITRN SXC GNBT-30% NVAX RNAI RDCM-37% CHINA CDE PEIX RADN ESLR-109% IDEV DDD-48% CVO-68% GRS-78% SMDI-68% NAK LCAV ECLP SMSI MSPD SPSX-30% ROK AU HSP-32% BE RADS LTRX-37% HEIA

Stocks On Radar Screen: HEB HS MTSX

Disaster Of The Day: CNTF. 18% smack in the face in one day. What makes this worse is that I was long the full line of my original position from 2/2. Looks like today's gain in GNBT is wiped out by CNTF. Oh well, it happens in this exciting game of active investing. What do I do now? Sell it all and move on. It is the only thing you can do. What else should I do? Cry about it? Complain to my friends about it? Hell no. I pick myself up and move on.

Markets End The Week With A Pullback On Lower Volume

Markets pulled back across the board, as traders took profits before the long weekend on an option expiration Friday. The Nasdaq fell .5%, SP 500 .2%, and the SP 600 and DOW less than .1%. Volume came in lower than the day before which is basically a positive for the markets after the previous gains following the Dow's follow through.

The markets are still acting quite healthy, overall, with all the major indexes trading above their 50 day moving average.

Leading stocks are also doing really well, to go along with the positive action in the indexes. The few stocks that broke hard did so on earnings and so many other stocks remained in solid uptrends that more gains seem plausible.

If you know how to pick the right growth stocks this past week was pretty good and gave some relief to the underfperforming markets of the previous three weeks.

As IBD said this weekend, growth investors have had a wonderful past two years while the markets have basically returned modest gains.

That is the power of following histories biggest winners and just repeating the same technique over and over. While people try to bottom fish, guess on earnings, short a strong stock, and invest in yesterday's winners like DELL INTC CSCO and MSFT, traders who follow the CANSLIM method or something similar WILL ALWAYS OUTPERFORM THE REST.

Earnings season is almost over and so the violent stock reactions that muck up the charts should be abating. We shall see what Tuesday brings.

I hope everyone had a great Presidents Day Weekend and spent some time with your family or friends.

My personal thank you to President Washington, President Lincoln, President Truman, and President Reagan for everything they did to make The United States of America the greatest nation on Earth. And don't think you will ever convince me any other way. Too many people have tried and they all have and will fail in the future.

New Swing Longs: IDEV CCUR ARBA VTRU

New Swing Shorts: NONE

Longs Outperforming Market: ERS-123% XRTX-35% SCHK-28% ATHR-70% MDCC-42% TRO FFIV PNRG PETS-140% GOL-76% ARS-37% IHS-32% LDSH-42% STX-29% RVSN-35% NGPS ASF-177% ASVI-26% COGO GMXR-207% MORN KEX KNXA-30% CBG-87% MSCC-69% NVDA-58% CKCM CHE KLIC-39% JBL RAIL-60% RUSHA NNDS MEK SPWR-38% QCC FWLT-70% IKAN-46% ITRN DRH SXC LJPC TGB GNBT NAK OPLK DEZ-108% ANAD-103% JDSU-27% NVAX CUP STXN-53% EDS IT RSTI-26% Q-36% MERX CMPX BGO KNOL ING ICGE HSP-32% STD SMDI-62% PKE BLD KDN PPCO-30% HPOL HEIA LTRX-35% FC ZVXI

Shorts Outperforming Market: NONE

Stocks On Radar Screen: CTRP HEB DXCM

Markets Rally; Leaders Starting To Show Their Leadership Again.

Stocks rallied across the board, on Thursday, with the Nasdaq and SP 600 leading. The Nassy and SP 600 was up .8%, SP 500 up .7%, and the DOW up .6%. The Nasdaq's volume was higher than the day before, while the NYSE's volume came in lower. The accumulation day on the Nasdaq is a helpful confirmation of the DJ-30 follow through.

Leading stocks and my portfolio were on fire today. Almost my entire portfolio rose today, without the indexes even rising 1%. I find that not only abnormal but very very positive. I can not remember if I have ever seen my whole portfolio up without the indexes up at least 1%. This tells me I am in the right stocks, once again, if a big rally is starting.

When you hold as many stocks as I do and see them all go up, you can be sure the market is very bullish and the bears are very wrong right here. That along with the IBD 100 up 1.9% shows me that this market could have legs, even if it was the Dow Jones Index that followed through.

The Semiconductors, Biotechs, Financials, Transportation, Steel, and Retail stocks are leading this rally and seeing the rotation of money from the Gold and Oil stocks. This is apparant when looking at the charts of individual companies in each of the above named sectors. The other good thing is that the leaders that are starting to take shape are the same ones that started showing up in the April to May and October to January rally. These are the sectors that lead healthy markets. Like I said earlier, it is hard to be bearish when stocks like GS, MER, LEH, and every other Financial stock is hitting new all-time highs.

There is still plenty of bearishness out there and I have a feeling that most investors are not properly positioned for a rally. I know many traders who have gotten very negative the past month and their bearishness is what helps propel a good rally. And the traders who are bullish are not completely invested so their money still needs to find a home. That also will help fuel a rally.

I can only hope everyone had an amazing day like I did. I was taking some small constant hits the past four weeks but after today I can erase the losses of the past two weeks. That is the power of smart disciplined momentum investing. When you get it right, you get it really right. When you get it wrong, you get it a little wrong.

If I could only play poker like I trade stocks, life would be darn near perfect. Good luck out there!

New Swing Longs: MEK NTAP TNE HPOL CONR MT

Adding To Existing Positions: NKTR NVAX TBH KNOL

New Swing Shorts: NONE

Longs Outperforming Market: ASF-173% ERS-111% PNRG BBD-154% SCHK CKCM NVDA-57% ASVI-25% GMXR-202% TRO TRAD-62% SAY-30% NNDS XRTX-30% SNPS KEX ADBE CBG-86% MSCC-68% SLAB CIB-33% PETS-134% GOL-73% PRPX WIRE-114% MFLX-167% ARS-34% OXPS-77% IHS-29% AXE-28% NGPS MDCC-37% JBL STX-27% KNXA-29% BEAV-39% CHE AIX LTM STMP-29% RVSN-33% FFIV CNTF KLIC-38% BOOM-321% RUSHA MORN TMI VSEC-39% KEYS-37% CRDN-61% IKAN-44% PAY SPWR-32% FWLT-67% SXC VIMC PEC ITRN DRH UEPS TFSM RTK-65% FLML ZEUS-43% KNOL CMPX AMKR MNTA Q-33% DIET-46% BGO CHRD AKAM-67% CTXS SMDI-61% IED-54% RBAK-189% NOVL-29% BTUI-121% SPSX-28% CUP TGB HGRD ADLR-71% AMCS TWTC-78% NKTR BKUNA MU-28% SBAC-33% AU BE DMX KDN RCNI PPCO-30% BGC-55% BEAS UBS IT TXCO-34% CVO-66% ASGN-90% ACTG BAM HEIA TBH LTRX-30% AMPL GIGM-57% APAC MEDX VTSS NVAX ROK DB

Shorts Outperforming Market: NONE

Stocks On Radar Screen: KEYW ILI HEB VERT STTS DSCP

Stock Market Averages Close Higher On Mixed Volume; Small Biotechs Showing Some Leadership

Stocks fell early then staged a nice intraday rally after oil fell 3%. That helped the index turn around and close near their highs of the day. The SP 600 was up .75%, the Nasdaq was up .6%, the SP 500 up .4%, and the DOW up .3%. On my charts Nasdaq volume was higher and the NYSE was lower. However, IBD, IB, and Realmoney all have volume lower on the Nasdaq. So, once again, my Nasdaq chart has different volume figures than all other sources. Knowing how excellent the TCNet software is, I think this is silly now.

After scanning my charts tonight, I did not notice any really high quality stocks breaking out. There are some setting up but something doesn't look right. The stocks that did show up on my scan as new buys mostly hail from the Biotech and Semiconductor sector. And most of the nice charts are in those sectors and the Transportation sector. However, the majority of the leaders in these industries have already broken out to big gains. The ones remaining are of lower quality. But the charts are nice and the active trader in me will take what the market gives me.

That along with big caps and the DOW taking the leadership from the small cap and tech stocks show that the current rally is not favoring the cream of the crop. But as long as Bernanke is raising rates and there are stocks breaking out from good patterns I will keep my long bias.

With oil falling, the markets going up, bullish readings falling, and people's fear growing over what Bernanke will do is enough to keep the market afloat. As long as there are people who are pessimistic about the GDP growth, inflation, job reports, the deficit, and the war in Iraq, the markets have that wall of worry to keep climbing higher.

Barry Ritholtz, the chat rooms, CNN, and the rest of the bears can keep crying and can keep telling me why this market should fall or why it should crash. I will just listen to the charts and react. Those charts make me a TON of money in bull markets and help me keep a high level of cash when the markets are shaky, bearish, or a bit confusing.

Those charts are facts, the media commentary about the economy is not. If they reported both sides or spun it the correct way, trust me, everyone would know this is and was a great economy the past three years.

Do me a favor. Research how the writers of NYTimes, Wash Post, CNN, ABC, NBC, CBS, and any other major news network votes. Journalist say they report fair and only the facts all the time. Yet when people like Helen Thomas is asked by people who she votes for, she will NOT answer the question.

The truth is unless you do your own research you will never know that this economy is just as strong, if not stronger, than the economy was under Bill Clinton. Yet when unemployment was higher under Clinton, it was considered wonderful and full employment. Yet when unemployment is 4.7% under Bush it is tragic. And don't give me the argument of the jobs were better back then. That is like me saying, "Darn these stupid automobiles! I make horse carriages! What am I going to do now? I am going to lose my job and have to learn a new craft." The times have changed folks. This is a service economy. Wake up and get with it! Last time I checked also, Toyota, Honda, and all the other foreign car manufacturers have plants here in the USA. GM and Ford screwed up on their own, with no help from an outdated Union.

Unions! Another fine example of a great program hijacked by mentally incompetent socialist.

New Swing Longs: SLAB AMKR AMCS MNTA MEDX VTSS AMPL

New Swing Shorts: NONE

Longs Outperforming Market: MORN SURG GES-89% TRAD-56% CRDN-61% KLIC-38% KEYS-36% BOOM-319% ERS-88% XRTX-26% GOL-69% MFLX-162% LDSH-63% LCC-64% MDCC-35% ASVI CLZR-30% TMI NVDA-50% CHE CBG-82% BEAV-37% FFIV OXPS-75% STX-25% SAY-26% KNXA-28% RUSHA BBD-135% MSCC-65% VSEC-39% RVSN-32% SCHK STMP-28% WIRE-111% NNDS CIB-30% PETS-130% JBL KEX TRO LTM AXE-26% IKAN-38% PEC DRH VIMC FWLT-62% SXC HGRD ADLR-69% RNAI ACTG NVAX NKTR NUVA BGC-54% SBAC-32% ELN-32% DMC RBAK-182% IED-49% MSPD-29% AKAM-61% RADN TNOX RADS PPCO-29% HSP-31% ECLP MU-26% GLNG TTEK BE EDS SNPS ZVXI UHAL-93% SMDI-56%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: ITRI IRM ARII EVVV FALC ISO ORCC GV STTS HPOL DCGN

Major Stock Market Averages Give Investors A Valentine Day Treat

Stocks market indexes rose across the board today, with the Dow Jones Industrial Average taking the lead. I can not remember the last time I said that! Wow.

Anyways, the Dow was up 1.2%, SP 600 up 1.2%, SP 500 up 1%, and the Nasdaq up 1%. Volume rose across the board on all the indexes.

The Nasdaq's increase in volume still was not enough to put it over the 50 day volume average. The SP 500, however, was higher by about 30% and the volume did come in over its 50 day volume average. The SP 500 also reclaimed its 50 day moving average.

The SP strength and positives today can only be triumped by one other index -- The Dow Jones. The Dow Jones followed through today to confirming its recent rally attempt. The advance was a pretty big advance and that is coming off a period where an obvious rotation from small caps to big caps was happening.

This follow through, indeed, does reset all the prior distribution days. I have covered the shorts I put on and now am operating from a long bias solely again. However, not all follow through days lead to a rally. So just going out and buying random stocks is a very silly move here.

This follow through on the Dow comes from a market that was very favorable to small and mid cap stocks from the October 2002 lows. This "obvious" rotation into big caps is very good for the last leg of the bull market.

When big caps take over the leadership from the tech, small, and mid cap arena you can normally place the bets on a market being in its last stage of a major advance. Since I can not predict the future, I will say that I am not sure if this is in fact what is happening. But I can tell you that we are near the end of the Fed tightening cycle. And since markets rise when rates are being tightened and fall when they are being cut, it is a good possibility that we are in our last year of a three year bull market.

But like I said before not all follow throughs work and this follow through is lacking quality charts. Normally on follow through days for the major indexes, you will see a lot of charts nearing completion of very good bases and you get some early breakouts before and during the follow through day. However, this follow through is ugly. I see no quality leaders setting up in first or second stage bases and the few longs I am even daring to take are not of the prettiest chart patterns either.

If this follow through day is for real, the market will start to provide us with stocks completing sound bases with excellent price and volume patterns. If these do not show up, I think it will be safe to say this rally will fizzle out. Normally, you need fresh new leaders to lead real rallies. When the old dogs like T, CAT, CSCO, and MSFT start to get play you know you are near the end -- not the beginning. At the same time, though, when the big financials like MER and others are hitting new highs you normally can bank the markets aren't heading for new lows.

Are you confused? You are. Me too!

Great luck out there!

Happy Valentines Day!

New Swing Longs: KDN TBIO TBH

New Swing Shorts: NONE

Longs Outperforming Market: ATHR-74% LCC-60% BOOM-306% CRDN-55% RAIL-61% SCHK MFLX-155% WIRE-109% STMP-27% MDCC-32% PRPX CNTF LTM GES-80% CBG-79% KEYS-32% BBD-132% CLZR-27% KEX COGO CIB-30% GOL-64% MSCC-63% NGPS VSEC-38% LDSH-58% OXPS-72% AXE-26% CKCM TRO SAY-25% STX NVDA-47% KNXA-26% IHS-28% ORA-82% IKAN-31% FWLT-61% MORN MMK PEC UEPS WBMD BEAV-35% ARS-33% RUSHA TGB-25% HGRD BGO VRTX-166% MERX KGC-28% STXN-50% NXG-44% ZEUS-44% MU BGC-48% NOVL-26% SVR-67% MEL EDS CHE Q-30% HSP-29% NRPH-89% EVST-26% SIRF-125% TXI STD CVO-62% PPCO-26% RATE-118% CMPX ADLR-60% TWTC-76% UHAL-85% FNX APAC HEIA SILC-105%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: BWLD CRXX NWD AXTI TRBM IRM CPSS AVM

Markets Selloff On Lower Volume; Old Man Winter Keeps Wall Street Quiet

The Markets fell across the board, with the Nasdaq and SP 600 down 1%, SP 400 down .8%, and the SP 500 down .3%. Volume was lower, probably due to the snow storm that hit NYC. However, breadth was really poor around 2 to 1 negative so the low volume is of little comfort to all the stocks that got a decent shelling.

The put/call ratio spiked up to .9 today, indicating a decent amount of pessimism. That spike indicates the selling may be nearing a crescendo. Along with the put/call ratio the 10 day moving average of the McClellan Oscillator index is nearing oversold conditions on both the NYSE and Nasdaq. However, we are not quite there yet so there may be more downside to come.

I still don't think the market is going to crash. Overall, earnings are pretty darn good. It is just that expectations were way to high. But consistent earnings and sales growth from industry leaders looks on pace to continue their uptrends.

But for now there are few good new stocks breaking out and acting well. This is not a sign of short term strength. At the same time, though, I still have a good amount of longs that are acting really well. Maybe they will join the downside party. But until they do I have no reason to sell all of the position.

So now we go back to worrying about Hamas, Hezbollah, Iran, Syria, Iraq, and any other country that scares people. By the way people, these terrorist were around in the 1990's. Just because Bill Clinton and the left wing media did not pay attention to the middle east does not mean this same crap that is happening today was not happening then. You just did not see it.

And if that doesn't cause enough people to think the world is ending, I can offer Ben Bernanke. Bernanke will be giving his first speech on Wednesday. I am sure that will give the media enough of a reason for explaining the markets subsequent selloff or rally.

Deal with the facts, ignore the noise. Great luck out there.

New Swing Longs: TRCI

New Swing Shorts: USTR TIE REP

Longs Outperforming Market: SURG WIRE-102% ORA-82% LCC-52% TRAD-57% STX XRTX MFLX-146% MDCC-28% COGO KEYS-29% IHS-27% PETS-136% ATHR-62% SCHK CRDN-48% NVDA-47% CBG-75% VIMC PEC WBMD MORN BLD ZVXI HEIA GNBT PEIX STXN-43% BTUI-115% RBAK-173% RDCM-33% CERS-176% RAIL-55% AXE-25% NKTR LJPC MERX BGC-44% BWNG-40%

Shorts Outperforming Market: BYD

Stocks On Radar Screen: ITRI ARII AXO IOTN

Markets Stage Great Intraday Rally; However, Volume Was Weak And Breadth Was Poor

The major market indexes all staged a nice intraday rally, today, to help them close up on the day. However, these gains came on lower volume which was preceded by a distribution day. Usually you want the opposite. The Nasdaq finished up .3% and the SP 500 finished up .3%. But breadth was poor on both the NYSE and the Nasdaq. The Nasdaq even had negative breadth.

This along with the weak action in my own personal portfolio definitely indicates we are in choppy waters. The markets five distribution days in four weeks and year long churning also confirms what my longs are telling me. That we are not in a bullish market anymore and caution should be advised. Another inicator is how leading stocks are doing and the IBD 100 sank a bit over 4% for the week.

None of this should be new to readers of this blog as I have advised multiple times this year to sell into strength, take profits, cut losses on weaker performing stocks, and keep new longs very small. I have also mentioned the recent churning action of the indexes. If you now study on your daily index charts of the SP 500 and Nasdaq you will see what I was talking about.

The small cap indexes are holding up. Their intraday reversal gave them some very nice daily charts with them bouncing off their 50 dma's and creating a nice daily candlestick chart pattern. The big cap stocks have been seeing some renewal also as evident by the Dow Jones holding its own during the current choppy markets.

All of this creates a very uncertain environment and helps discourage traders from trading every daily tick. That can only be a good thing. This uncertainty creates the downtrend that we need to setup new bases for new longs. With the lack of really good chart pattern in high quality names, it may take a while. This is positive, none the less. There was too much bullishness, this year.

Why I am still not ready to short this market outright is that if the markets do get ugly there will be plenty of time to find the ripe shorts. The shorts will come up after the trend is in full force, trust me. I have seen it over and over. Just go read the first six months of this blog. I was shorting many times and doing quite well. Why? Because I was going with the trend and the trend was already down and obvious before I started shorting. Patience is always a virtue.

Another reason I am not shorting is just look at my longs I am still holding. They look great! Most of them dont have many dings in their armor at all. The long term winners that have gotten hit are gone. The stocks that did not perform are gone. But the ones that are still in the portfolio are doing well. Until they breakdown also, I will stay long with an exploratory mind towards shorts.

One more thing to mention. After the 30 yr auction treasury you can now see an obvious yield curve inversion. This is now very obvious and I do believe this is going to have an impact on stocks. And usually that is not a good impact.

One more thing to mention, again. The Fed is not done. I would not be surprised to see the rate go to 5%. I hope it does not happen but remember if rates do rise that much more that gives us at least another four more months of a rising market. Remember stocks rise during rate hikes and fall during rate cuts. It is history, it is facts. Go "Google" it!

Maybe that is why I still have so many nice charts that are longs. That doesn't mean the new longs are going to rock. Those have been terrible recently. But at the same time there is no reason to sell the ones that are working either.

We shall see what next week brings. Good trading everyone!

New Swing Longs: CHINA HEIA A PEIX

New Swing Shorts: BYD

Longs Outperforming Market: CNTF EVST-30% VIMC GOL-67% ATHR-61% AIX BBD-133% GES-76% TRAD-52% CIB-30% LDSH-60% ADBE SIRF-130% ORA-74% JBL FFIV EFII ITRN ASVI NNDS ROK STX LTM TRO GMXR-225% PKE RAIL-51% NGPS EDS QCC MORN GIGM-60% CHRD MMUS DIET-38% NKTR LRCX-42% BGC-43% STXN-36% RDCM-29% UBS RES-119% PPCO-28% BE SNPS SILC-102% NOVA

Shorts Outperforming Market: NONE

Stocks On Radar Screen: KEYW ARII AVNX SCI MNKD AXO AUXL MTSX DCO

Nasdaq Fails To Retake Its 50 Day Moving Average; Markets Suffer Nasty Last Hour Reversal

A nasty last hour selloff left most averages down for the day. The one exception being the Dow Jones Industrial Average rising .2%. The Nasdaq fell .5%, SP 600 fell .6%, the SP 400 fell .4%, and the SP 500 fell .1%. Volume rose on the Nasdaq and fell slightly on the NYSE.

Sidenote: Once again, my charts and IBD charts disagree on the Nasdaq and NYSE volume. I wish I kew which was right. TC shows lower; IB, IBD, and Realmoney show higher. So I am going off the IBD data.

The higher volume selloff for the Nasdaq gives it and the SP 500 five distribution days in the past four weeks. This should be enough of warning flags for investors to get rid of any stocks you are not happy with. These distribution days along with the obvious churning in the Nasdaq this year should give you pause before initiating any new longs.

Unless the longs are perfect technically, are in a leading industry, and have sound fundamentals I don't recommend taking any large positions while the market is acting like this.

The Nasdaq and SP 500 are in short term and sub-intermediate term downtrends. The SP 400 and 600 are in short term downtrends and sub-intermediate term uptrends. All are still in long term and intermediate term uptrends. So as you can see, the markets are kind of in a battle ground right here.

I think it is dangerous trying to predict which way this market is going to go. I don't care which way it is going to go anyway. I will just play that trend and take what the market gives me.

New Swing Longs: LTM PEC MERX PSPT

New Swing Shorts: NONE

Longs Outperforming Market: ERS-117% PETS-149% TGB-28% ORA-73% AIX KNXA-32% CKCM SAY-26% SXC GOL-59% BBD-127% GMXR-224% ASTE RVSN-36% IHS-27% BOOM-325% TRO NEM ARS-32% CIB-28% PAY COGO CNTF LEND LCC-48% LCRD-66% CBG-78% MESA EDS STX GRS-80% KEYS-27% MCX-60% ITRN BTUI-115% LDSH-58% FNX ASVI DB NNDS BEAV-30% EFII ROK IKAN-31% SPWR-37% QCC MMK FWLT-68% MORN DRH AKAM-63% CUP ADLR-64% MRB-78% TVIA BRLC GIGM-48% RNAI GRZ ENER AU-33% TFSM RDCM-28% ACTG RATE-113% CDE KNOL BAM NUVA RADS ACR-81% BE DA ICGE IED-47% BMD-292% LWSN CTXS TXI SPSX-25% LJPC BEAS RSTI PPCO-28% AXE STEL SNG SNPS RCNI BGC-40% UHAL-80% SILC-86% FC

Shorts Outperforming Market: NONE

Stocks On Radar Screen: BTI ITRI SPSN ASTT OCPI NWD KVHI FRK GV PROG TISA

Major Stock Market Averages Find Some Support And Close Near Their High Of The Day

The Nasdaq bounced back above its 50 day moving average today on higher volume, rising .98%. The SP 500, SP 600, and SP 400 (lol, no particular order) rallied between .3% to .8%. Volume also rose on those indexes too.

This was nice to see after such an ugly down day yesterday. Markets rallying on higher volume a day after being hit with a distribution day is very positive for the overall health of the market. It was a good day but it still hasn't changed the sub-intermediate and short term trends of the Nasdaq. That is still down. However, the small cap and mid cap indexes remain extremely healthy and are still in strong uptrends.

The big-caps showed some strength today. If you remember, I mentioned that last week I noticed that rotation into big-caps from small-caps was starting to become obvious. Today showed that again as big-caps outperformed small-caps. DELL and CSCO come to mind as two obvious big-caps from yester-year getting a healthy uptick.

We shall see how this plays out. If a rotation into big-caps is happening that means that we could be starting the last leg of the multi-year rally that started in October 2002. But I think I am looking too much into the future now. It is a bad habit I get from watching CNN and monitoring chat rooms. I should stop both.

Good luck out there.

New Swing Longs: LSI

New Swing Shorts: NONE

Longs Outperforming Market: STMP-29% MFLX-144% RVSN-34% OXPS-80% KNXA-28% SIRF-140% KLIC-39% MESA GMXR-218% KEX TGB VSEC-39% PETS-137% NVDA-49% LDSH-57% ORA-65% MNST-38% STX PHX CIB-26% IHS-25% TMI CLZR-38% PKE DB FFIV PRPX PAY NTG ITRN JBL LEND KEYS-27% NDAQ-285% XRTX ATHR-54% SAY BEAV-30% IKAN-27% SPWR-34% WBMD QCC MORN ADLR-49% ARXX CNXT-36% BGC-40% EVST-43% MSPD-35% TVIA DDD-54% SPSX-25% RBAK-171% ALY-42% LCRD-64% CPST WIRE-103% HOMS CDE EDS VRTX-177% ROK DEZ-101% CTXS AKS TXI AU-28% NTO STD PPCO-26% BE LWSN RADS BGO STXN-36% HSP-29% MYE GNBT BCO-28% ACR-77% UBS SILC-81%

Shorts Outperforming Market: NONE

Stocks On The Radar Screen: TRCI PSSI CHINA CAV TISA

Nasdaq Sub-Intermediate Trend Turns Down; The Past Month Was Churning On The Nasdaq

The major stock market indexes fell across the board as volume came in higher than yesterday. The SP 600 fell 1.4%, SP 400 1.3%, SP 500 fell .8%, and the Nasdaq fell .6%. The higher volume decline gives the SP 500 and Nasdaq another distribution day. Both indexes are having about one per week the past four weeks and that combined with the higher volume days where we go nowhere indicates churning in the market.

A lot of my longs have turned for the worse and I am selling a lot of them that gave sell signals today. That along with few of my new longs imediately going higher shows me that the market is probably in for a little bit of a rough patch. I don't know how long or how far down it may go or if it is even going to go down much further. But taking precaution now will protect me if things get much worse. I have significant gains since the October bottom and have given some back the past two weeks and don't want to give any more back.

Along with my situation, I noticed the metals and oil commodities slipped quite a bit today. This was the leading sectors of the market coming from the October rally. So if the metals and oils are done that would make sense that the market is done for a while too.

That could be great news because now maybe the market can rotate into a better crop of new stocks in stronger sectors. The metals sectors have few stocks with A+ fundamentals and some new leadership would be healthy for the market. However, all of this is thrown out the window if the downtrend picks up steam. But for some reason, I really doubt that is going to happen. Corporate profits are at all time highs, the markets are relatively inexpensive, and the economy is very strong no matter what the CNN's (Communist News Network) report. There biased facts will never help you make money in stocks.

One of the more obvious facts of weakness in leaders came from the IBD 100 Index. That index fell 3.4% today with many stocks in that index slicing through their 50 day moving averages. That is very bearish when the leaders get hammered like that.

Sell your laggards, raise some cash, take some profits in some big winners, and if you have stocks showing no signs of distribution take some off the table too. Any new buys during this time should be small also. Unless, it a leading stock in a sector that is moving opposite of the market. And if that is the case, you want to see other stocks in the sector making new highs with any new purchase you make.

Who knows, this could be the end of the selling here and we could just go sideways. That is fine with me. That will set up a ton of beautiful bases that will act as solid launching pads for the stocks that lead the next leg up. But we now know the sub-intermediate trend is down for the Nasdaq and the NYSE is acting as if its trend is about to turn down. That along with leading stocks starting to crack after very long price run ups is a harbinger to lower prices not sideways prices.

Good luck out there!

New Swing Longs: LJPC NOVA

New Swing Shorts:

Longs Outperforming Market: BTUI-120% RAIL-52% XRTX VSEC-35% TMI DMC MCX-64% DB CRDN-66% EFII RVSN AIX JBL MDCC-30% RUTH DRH GNBT IED-47% CMPX LCRD-58% GRS-96% VRTX-173% SMDI-59% RBAK-155% WIRE-96% ACTG AKAM-58% STXN-34% BKUNA EFJI SPSX BLD

Shorts Outperforming Market: NONE

Stocks On Radar Screen: ENMC DADE HEC HOM

Nasdaq and SP 500 Consolidate On A Quiet Trading Day.

Call it the Super Bowl hangover but the markets seemed pretty dead and boring, trading in a tight intraday range all day. The Nasdaq was up .17% and the SP 500 was up .08% and volume was lower than Friday's level. Obviously, not an exciting trading day.

As a positive person I try to find the good in everything but yesterday's Super Bowl was pretty weak. However, I am happy for the Steelers, Jerome Bettis, and the city of Pittsburgh. Congratulations.

I hope the market is a little more exciting tomorrow cause today was boring. Even if it isn't exciting and it is another boring day I am sure the action in small cap stocks will keep me busy. These stocks continue to be active and are producing some nice charts. However, these stocks are volatile so keep tight cut loss levels.

New Swing Longs: SURG PHX ASEI STRL QCC GNBT TXI DYN AKS

New Swing Shorts: NONE

Longs Outperforming Market: GRS-85% CKCM-27% CRED-33% DXPE NDAQ-299% CLZR-39% NTG ASTE-28% COGO ERS-153% LDSH-55% UEPS GMXR-223% KLIC-28% XRTX GOL-60% ORA-63% KEYS-27% SXC NVDA-51% OXPS-73% ATHR-59% VIMC-27% CRDN-65% PNRG LIFC RVSN RAIL-44% TMI GES-78% DB SWN EFII IHS-25% FFIV MDCC-30% VLG FNX ADBE BNT-73% MSCC-72% KEX MESA CIB-32% PKE BEAV-31% KNXA BBD-129% VSEC-31% NGPS ASVI-26% JBL LEND MMK UDRL SPWR-36% MORN DRH NXG-64% FSII TGB CUP BKHM-39% NTO-33% STXN-34% RTK-92% RSTI SMDI-56% WIRE-92% BGO-32% ROK MRB-84% BAM MYE AU-36% MSPD-29% OZN CMPX AUY-99% TXCO-51% BRLC EFJI STEL PPCO-25% BWNG-56% RES-141% NUVA SWW TGC-60% RCNI ENY SILC-62%

Shorts Outperforming Market: NONE

Stocks On Radar Screen: MT FRK

Markets Fall On Lighter Volume; Super Bowl XL

Stocks fell on lower volume for the second straight day. The Nasdaq fell right to its 50 dma and showed signs of nice intraday support right there so that is a positive to take away from a down day.

IBD changed its final volume figure yesterday to the proper number for the Nasdaq so they have reclassified their assumption table to the correct "two days down on lower volume." My TC Net and IB charts were right so I feel like I was right and IBD was wrong. Finally, I got them. Just kidding; I really don't care and...neither do they.

Right now the markets seem to maybe finding support after the recent dowtrend started. The markets the past two days have sold off early and then have just hung around those lows without breaking them. This could either be support or a small break before more lower prices. It is impossible to predict the future, so the best stance is to just be patient and see what the market is going to do.

The market has a lot of stocks well extended from the most recent bases but at the same time have already gone down enough to put most around their 50 day moving averages. So I could see a bounce happening here soon. But overall we are still pretty oversold on most oscillator indexes on intermediate term basis so that might indicate a period of choppy or quiet sideways action. I don't know which because I can not predict the future.

We shall see what Monday brings us. I hope you have a great Super Bowl Sunday. Go Steelers, go Seahawks. I, like most of this greatest nation on God's green earth, just want to see an amazing game. I don't think we will be disappointed.

New Swing Longs: RNAI

New Swing Shorts: NONE

Longs Outperforming Market: LIFC BEAV-31% DMC DXPE MCX-72% ORA-58% NWRE-55% UEPS PRPX COGO ERS-141% OXPS-65% PETS-135% IHS SAY VIMC SCHK GMXR-211% KEYS CRED-29% KLIC LDSH-48% TRAD-68% BTUI-98% BNT-72% FNX CKCM BOOM-418% NVDA-46% MDCC-29% SXC PNRG NDAQ-276% VSEC-30% NNDS KEX RVSN ATHR-55% CRDN-61% MSCC-71% MMK CUP FWLT-81% RUTH UDRL MSPD TVIA TXCO-45% BEAS OZN BWNG-54% ADLR PPCO TGB STXN-28% ANAD-113% REGN-44% KNOL WIRE-87% AKAM-36% GIGM-61% SMDI-50% THQI NAK-31% CMPX RES-138% DA BAM ALY-43% NUVA IT

Shorts Outperforming Market: NONE

Stocks On Radar Screen: TRCI GHDX ACEL

Short-Term Trend Turns Down; Markets Starting To Look Like They Are Churning

Stocks fell across the board, on Thursday, with the Nasdaq down 1.3%, SP 500 down .9%, SP 600 down 1%, and IBD 100 down 1.4%. Volume came in lower across the board, showing that the selling was not too intense. However, IBD says the Nasdaq's volume was higher so that would make it a distribution day. But I am not sure how they calculate their final volume figures, so I can not call this day a distribution day.

The Labor Productivity report was the "blame of the day," falling for the first time in five years. That was enough to scare out some sellers and kept the bidders from holding stocks up. That has now allowed some indexes to start short-term downtrends that could turn into a sub-intermediate downtrend.

Why do I think that? Because the recent action of the indexes are starting to look like churning to me. Almost everyday this year, the NYSE and Nasdaq has traded volume above their 50 dma yet the markets are going nowhere. That along with the two biggest % moves of the indexes this year have been to the downside. And then the lack of high quality stocks breaking out, stocks rolling over or breaking down, and my recent longs consisting of lower quality issues raises red flags. This commentary, of course, does not apply to the Mid and Small Cap indexes. Those indexes are so strong that if in fact the markets do rollover they will probably join the downside afterwards.

Therefore, I am keeping a close eye on the indexes, raising cash by having to sell weaker stocks that are triggering cut loss or profit taking signals, and keeping my new buys very small. But I am still bullish, because I have to be until the SP 500 and Nasdaq break to new 2006 lows.

The short-term trend may be down but how many times has the short-term trend turned down this year only to right itself back to the upside? I know off hand at least 9 times in the past 6 months.

We shall see what tomorrow brings. I am just happy there is one more trading day before the Super Bowl. It is going to be a fun Sunday! If I do not update my blog until then....GO STEELERS!

Sorry Seattle readers but I have to root for Jerome Bettis. I was born in St. Louis and he was a Ram. I know that is cutting it close but whatever.

New Swing Longs: CNTF NUVA

New Swing Shorts:

Longs Outperforming Market: ERS-132% MCX-62% CBG-85% SIRF-136% COGO SCHK DMC LCC-46% GOL-59% IHS VSEC-29% LDSH-46% CIB-32% EMAG KEYS XRTX TESOF ROK MCF NNDS GRS-76% DOX VIMC FWLT-72% IKAN-26% AATI UEPS CUP BKHM-39% TGC-62% EMKR-123% EVST-26% AUY-96% TTEK EFJI MSPD RGEN SMDI-48% MRB-74% TVIA PPCO FSII BAM RSTI BWNG-46% TXCO-37% NSTK TYL DROOY BRLC CMPX CDE BGO-30% ITRA

Shorts Outperforming Market: NONE

Stocks On The Radar Screen: MLP CAAS JADE CHINA PPS MNKD

Stocks Continue To Shock And Awe The Bears And Climb Their Proverbial Wall-Of-Worry

The market continued its amazing strenght in the face of adversity, today. Most people, including me, thought the Nasdaq was going to take at least a small hit today. Instead, it closed higher and finished very near its HOD and it did it on heavier volume than yesterday. It doesn't get much better than that.

The SP 500 finished higher by .2% and the SP 600 was barely up .05%. Volume was lower on the SP 500.

The stock market continues to be very bullish and continues to prove the bears wrong. It gets pretty disgusting listening to their negative headlines everyday. But by following the markets price action and not listening to the negative bears it makes making money a lot easier.

However, I have been trimming back some of my uglier longs and have taken some hits in some long-term winners that have me out of the whole position. That has me raising my red-flags. I have lots of great new longs to buy, but most of them are of the cheaper or lesser quality of issues. That makes me think that the market may be long in the tooth at these levels.

Until the market rolls over, however, there is no reason to start selling. The market still looks really good and the way it fights off all the bears attacks is very bullish. But the fact that I am having more blowups in my longs and I am watching market leaders like GOOG start to crack makes me raise my eyebrows.

The trends are still up and the small caps continue to outperform the big caps. So until the market actually rolls over, I will remain long and strong. But, I have my guard up. Let's see what tomorrow brings.

New Swing Longs: FORG BRLC TSEM TYL BE MESA ICGE AZPN CHRD TTEK TRO DOX ITRA

New Swing Shorts: NONE

Longs Outperforming Market: CLZR-35% MNST-41% WIRE-96% GRS-76% GES-80% NNDS MDCC-29% NGPS MSCC-73% RAIL-46% WBSN VSEC-27% AIX MCX-49% PKE TESOF BNT-74% SCUR VLG ADBE ITRN ASF-153% PNRG SF KEYS LDSH-45% RVSN DSGX-33% ASTE-26% LEND CTXS ARS-37% CBG-71% DB CRDN-63% ORA-49% FFIV ORCT ASVI-29% NEM-25% LCC-43% IKAN RUTH CUP AATI VIMC NSTK RDCM-46% BFT RBAK-155% BWNG-44% AUY-84% STEL BKHM MTZ IT IED-38% BTUI-101% KLIC-26% SNPS EVST EFII SIRF-135% BGO-30% CDE BEAV NXG-60% HSP-29% SMDI-44% DESC THQI CCI-81% TSCM-65% OMCL BEAS EFJI SWW KFRC KNOL ARXX JDSU-31% TGC-46% SPSX RCNI HGRD AXE-27% BAM RSTI ECLP STD MSPD EMKR-104% SILC-52% LTRX

Shorts Outperforming Market: NONE

Stocks On Radar Screen: VMC MXWL MONE NANO CFS KRSL YMI CPSS

Longs That Got Thwomped: THOR. Sold the rest at a 48% profit. Still, overnight, an 88% gain turned into a 48% gain.