Notes From Yesterday's Missed Commentary.

This action is really nice after last week. But I had 445 stocks on my list tonight compared to 510 on Monday. So some of the momentum feels like it is slowing already. Still another accumulation day is better than a selloff. Even though it was a minor acc. day, it still was an accumulation day.

I love what IBD wrote last night about....

....Some pundits linked Tuesday's midterm elections to gains in the stock and bond markets.

Others noted that November and December have historically been strong months for stocks.

A few pointed to past instances of market rallies occurring after a major event or period of uncertainty, such as an election.

Such suggestions make for enticing headlines, but they shouldn't be treated as gospel.

As the summer wound to a close, pundits warned that September historically is the worst month for stocks. Traders would return from their summer vacations in a foul mood, we were told.

Instead, the Nasdaq surged 3.4%, continuing the rally in effect today.

The market often looks ahead several months as it charts its course. Today's blaring headline may not have as big an impact as one would expect if tomorrow's news changes.

Keep watching the daily and weekly price and volume action of the major market indexes. Make sure to also track the action of market leaders. Treat all other factors as secondary.

...They echoed the exact thing I discussed the day before but did it much clearer than I ever could have.

Bottom line is your opinions and my opinions don't matter.

The elections dominated the headlines today. This is going to continue to dominate the headlines. I don't expect anything crazy except the trend to stay in place. I know that may seem crazy but whatever.

I am using a friends laptop to write this and I will write commentary about today's market in about three hours. I just wanted to post this. I will be able to scan my charts tonight at my friends house so I will have new longs posted tonight. Unless, he goes somewhere, then I am fucked.

I will be back soon enough. I have not ordered my computers yet but the new harddrive is in the mail. I will see you when I see you at Investors Paradise. Aloha!

Markets Keep Rallying; I Am Out Of Commission For A While.

This is not good everyone. My laptop has bitten the dust. The harddrive is destroyed. DELL is sending me a new one in two - three days but until then I am out of commision. I will be buying a desktop and a backup laptop so this does not happen anymore.

I apologize but there is nothing I can do. I live on Maui and it takes time to get back up. After getting my new hardware, I will have to have road runner come out and hook up cable.

So besides the coffee shop, I am out of commision. I apologize for this. My current laptop was three plus years old and it has been abused.

I will be online sometime in the future. This is short term. I am not sure if I can even trade. I might have to only look at my accounts and will not have access to charts. So we will see what happens.

Once again, my apologize. I did not see this coming at all!

I will be back in at least a week. If you need to get a hold of me you can post comments here and I will read them and respond to them when I get to a connection.

I apologize.........

................I will be able to list all longs and sells because my friend is letting me use his computer for tcnet.

I have already installed tcnet and all my scans have been imported from their server. So I have all my tools to use. The only problem will be blogging and being here. I am so sorry for this. This will not happen after this. I will have a two desktops and two laptops after this ordeal. Hang in there and know I will be back online full time next week. Aloha.

New Swing Longs: CVNS RGX AMAG ANSW

Cut All Your Losses/Take All Your Profits: CMO XNR BMR IGT SYKE

Leading Stocks Lead Stock Indexes Higher, On Higher Volume.

We need to find a reason why the markets went higher today. I know I will pick that it was the mergers and that scared the shorts. Merger, mergers, and more mergers. I guess this is what we will attribute the gains in the indexes to. My guess is just as good as CNBC's guess.

It was a very good day for the indexes, with the Nasdaq rallying 1.5%, the SP 600 leaping 1.3%, the SP 500 jumping 1.1%, and the DJIA rising 1%. The better news comes from the IBD 100 and IBD 85-85 indexes. They both rallied 2%, leading the overall market. The best news of the day came from the DJ Trucking Index and the AMEX Airline Index. Those indexes rose 4.2% and 2.8% respectively.

Volume was higher today on both the NYSE and the Nasdaq. However, volume wasn't the most powerful, with volume barely rising 3% on the Nasdaq and 1% on the NYSE. This is an accumulation day but it doesn't have the feel of an obvious accumulation. A big jump (20% or more) in volume would have me LOVING this rally. However, I can only get a bit excited, because, to be honest, volume sucked.

Breadth was positive on the NYSE by a 3-to-1 margin and positive on the Nasdaq by a 2-to-1 margin.

OK, I have read all the pundits and all the market commentaries out there. I hear the bearish side and I hear the bullish side. I have come to the conclusion that this is purely a waste of time. I see so many commentators wasting so much time talking about how and why this market is going to fail that I wonder if they are investing/speculating/trading this market at all.

I keep hearing how everyone is bullish, yet after I go through the chat transcripts of blogs and chatrooms I see that a TON of people are shorting these upticks. Now I am not bullish or bearish but I am starting to get a ton of stocks, that I am already long, that are acting properly as they stairstep there way up. Being long 200 stocks it is hard to be bearish when I have so many stocks going up or sideways even after last weeks wild earnings ride.

Tonight, I only had one stock I had to get rid of. Out of 203 stocks, 177 were up. That is much better breadth than the overall market. That tells me that the right side is still the long side. Yes, there have been some hits here and there but if you look at my "longs up on the day" section, you will see that I am starting to get plenty of stocks up 25% or more now. I still haven't hit a homerun but the market isn't saying SELL SELL SELL.

This is why I think it is silly to try to call a failed breakout/top here. Until the market gives us some more CLEAR distribution days and I start having all my charts acting wrong, I have to remain long this market.

Could it roll over tomorrow? Yes. But what if it rallies 20% from here before rolling over? If it rolls over tomorrow, I take my current gains, cut my losses, and go to cash. If it rallies 20% from here, I am perfectly positioned for more gains in case EVERYONE is wrong.

The only problem I have is that the people that are bullish are VERY bullish. They are very loud and very vocal about how right they are. If you notice I AM NOT BRAGGING. I am simply stating facts. I have been writing this blog since March 2005 and have hit every intermediate market turn by not being a genius but by going on FACTS. FACTS are the ONLY thing that is going to make me money. Not guessing if this market is going to rollover and analyzing to death this silly market. The only way to make money is by listening to the market.

If you are not doing exactly what the market is doing then YOU are wrong. Not the market. No matter how much you don't like this rally, it is still a rally. You should be making money in this market. Trading/investing emotionally by dumping all your holding due to one 1% down day is stupid trading. It is emotional trading that will cause you to never make it in this game.

There is no place for emotional trading if you want to make it in this business. Staying agnostic in the stock market is the smartest thing you can do. Are there things that worry me about this rally? Of course. I stated them last week. However, am I going to trade on those worries? Hell no! I am trading on facts and facts state that stocks are breaking out and having a rough go of it but are still making gains.

It may not be 2003 or Oct-May 2005 but there are still plenty of great stocks out there. Just look below.

I will see you at Investors Paradise. Aloha!

New Swing Longs: OMCL EVEP VDSI WEL LMRA MALL

Adding To Holdings: CNH CCOI

Longs Up On The Day: MA-95 INWK-41 AOB-36 SYKE-38 XING-29 CXW-42 CHINA-27 TTEC-38 IHS-81 TYL-46 DA-45 HRZ-48 BMTI-41 OMTR-31 REGN-40 CCOI-32 FCSE-53 IDEV-31 BAM-43 CPAK-40 MIKR DIVX PRFT MVSN HRT CNH IAAC ICE NITE FTEK BEBE PCCC LINTA CPA ROG CAB TSRA BEAS AHS SMSC HCSG CELG ISE IGLD SEIC DECK PSPT LTM BMC INAP NSTC ACGL LMT PSMT BONT DJO DKS MAIL ICFI CVLT BMA SAI CBF ISIS FFH AXTI IGT MOS NEWP BMRN HGSI RSTI RWT CMCSA ETR VCP SVNT INO NWL AEP IMA NU TSG NHP GSL HNZ LNET PNW MFRI AFT SUAI TNH WGA

Stocks On Radar Screen: AMK FFIV SQM EAT CGPI ACTL FLML AW RBN KO

Cut All Your Losses: MYE

Stocks Fall Again, On Lower Volume, But Finish Off Worst Levels Of The Day.

Positive news from the ISM service index, a lower than expected unemployment rate, and positive revisions to payroll numbers in August and September were not enough to stop the DJIA from falling for its sixth straight session; the Nasdaq and SP 500 also made it three in a row.

At the close the SP 600 led the way with a .3% gain, the Nasdaq fell .1%, the SP 500 fell .2%, and the DJIA fell .3%. Leading stocks joined the SP 600 on the upside, with the IBD 100 gaining .3%.

Volume was lower on the NYSE and the Nasdaq, indicating sellers weren't eager to unload stocks, today. Breadth was negative on the NYSE by a 6-to-5 margin and by a 3-to-2 margin on the Nasdaq.

For the week the DJIA lost .9%, the SP 500 fell .9%, and the Nasdaq fell .8%. These are not horrible losses but it is a change in the short term trend of the indexes. The real short term crack-in-the-armor came from the SP 600 and the IBD 100. They fell 1.8% and 2.7% respectively. I do not like seeing these indexes lead to the downside. Yet, here we go again.

Overall it was another positive pullback for the indexes. It was not a distribution day, the indexes did not fall .25%, and I didn't have any stocks blow-up. I can't ask for much more than that on a day that didn't show gains for the indexes. Well, maybe, I could ask for positive breadth. That wouldn't hurt.

I have to be honest, the past two days have not been that bad considering the selloff we had on Wednesday. A lot of market pundits swore that we would start selling off straight down. The fact that those predictions have not come to fruition should show you that the market is stronger than even I think it is right now.

The other obvious is the fact that even though I took in a lot of stock and had to selloff 20 or so longs, I am still getting some longs setting up and having other longs I am holding making some sharp gains. I even have another candidate for a possible short term 100% winner. However, it will probably end up like the other recent one.

Still we have to respect the obvious fact that stocks are still getting taken to the woodshed left and right. Mostly it is in stocks already in downtrends but I have been long enough of these to realize that the market is not in the best shape.

Seeing the new lows tick up and new highs tick down a lot with just the one day selloff also indicates to me that the rally is not pent up with a lot of momentum. This all goes with the obvious patterns I have talked about in the Retail, Bank, and Semi indexes.

The poor action of these indexes, the weakness in highly rated stocks, and some recent market distribution should be enough of a reason right now to convince you to keep some powder dry, don't invest on margin, and with the longs you do take to keep them small. The most important thing right now, in this whippy weird market, is to make sure you buy stocks at the correct buy point and DO NOT CHASE. Most stocks that have blown up have not caused me severe damage do to me following this rule.

Many stocks that are bought past the correct buy points can leave you thrashed. If you buy at the right time and a stock blows up and finds support on that day you can wait around and see what happens. Further selling means leave but sometimes they find support and start marching higher. If you chase a stock, you more than likely will not be able to experience this scenario as you are hit with an initial HUGE loss.

What do I see that is bullish? I love seeing the Computer-Networking group jump from number #147 to #2 in the Industry Group list. I also love seeing these Internet groups jump up the list from #148 to #38 Internet-Software, #108 to #39 Internet-Content, and #105 to #24 Computer Software-Enterprise. If these stocks can start showing more leadership, it is possible the market will start picking back up again as speculative money comes off the sidelines into the "hot" stocks.

If you don't think tech is still hot, you are nuts. Speaking of nuts, if you want to participate in the conversation, you can always find me at Investors Paradise. I am logged on all day. Aloha and have a great weekend!!

New Swing Longs: TSG PSMT MTOX

Adding To Holdings: GLBC

Longs Up On The Day (low vol non-IBD excluded): CTCM-31 HRZ-47 CXW-35 IHS-78 TTEC-33 TYL-44 BMTI-29 OMTR-26 MA-80 BRLC-69 REGN-26 HRT CAB ININ QDEL IGLD JST DJO MVSN NSTC CHINA CPA PCCC SMSC HEI SVNT ACGL EVR BITS IMKTA RSTI TSRA XING CELG HCSG INAP ETE TSTC SEIC TNH ROG PSPT FORR FTEK ISE LTM FSH DKS ICFI TRBN CVLT SAI BMA ULTR AWH AZK TRAK RWT ATCO GLBC MRB ELOY

Stocks On Radar Screen: BTJ NYX LNUX SYNA ANSW

Take ALL Profits/Cut ALL Losses: KFT HURN

Morning Selloff Is Absorbed As Stocks End Flat.

The markets started off the day quite weak, after factory orders and productivity numbers came in below Economist expectations and weak October sales came in below analyst expectations. However, by the end of the day, stocks managed to fight there way back to unchanged levels and give a respectable close.

At the close, the SP 600 led to the downside falling .3%, the DJIA fell .1%, and the SP 500 and Nasdaq closed down by a fraction.

Volume came in lower on both the NYSE and the Nasdaq. This is the kind of nice calm pullback you want to see after such a clear day of distribution the day before. Breadth was negative on the NYSE by a 9-to-7 margin and negative on the Nasdaq by a 3-to-2 margin.

In my opinion, the action today was quite positive considering that we could have followed through on yesterday's selling with further losses today on higher volume. However, barely changing on lower volume has to be taken as a much better alternative to the former scenario.

Despite that the market has still seen the DJIA finish down for the fifth straight day. This is the longest streak of down closes on this index since June 2005. That isn't horrible, considering the size of the losses, but the trend on the short term is now down and the bulls have to respect that.

With the downtrend comes a lot of high quality stocks that are seeing some nasty surprises to the downside caused by poor earnings reports or earning reports that are being taken quite negatively by Wall Street. You just don't see this kind of action in a bull market.

Another thing you want to see that we are not seeing is Banks, Retail, and Semis leading. If you look at the major Philly indexes for these sectors you will see they all tried breaking out of a recent consolidation pattern the past month and they have all rolled over. You don't see this action during a strong market. You will see these indexes hold their breakouts. Now the RLX and BKX aren't in bad shape yet. So don't think I am completely bearish on these sectors. I am simply seeing warning flags in the stocks in these sectors that are causing me to open my eyes to the possibility that the market could get worse from here.

In bull markets, bad earnings releases are still treated like good earnings releases and earnings reports that beat expectations are well rewarded. Very few stocks that are blowing away analyst estimates are seeing those huge rewards hold; much less them seeing follow through gains after the report.

This market at best can be called an uptrending market with horrible action in stocks. This indicates only a select few of big caps are holding this up and even with the amount of small stocks participating it doesn't matter. Why? Because these small stocks are crap quality.

The best bet in this environment is to remain cash heavy with a long bias until further weakness shows up. Cutting your losses on stocks that do not immediately follow through is key until the market starts giving us more high quality breakouts that work for a prolonged length of time. One month of gains followed by a slow death is not how a stock should act. Stocks are showing a nasty habit of following that pattern since the May top that led to the downtrend that ended in July.

I am not sure how much downside remains or if there is even more downside to come. All I know is I am seeing signs that make me want to protect profits, cut losers, and keep my cash heavy. This rally has been flimsy and I have discussed ad naseum about all the negative things I see in my current holdings. The biggest one was not having any 100% gainers during the uptrend. I have not had that happen to me since 2000. Even in bear markets I nail some short term big winners. I couldn't even hit them in a market that was rallying. Was that my fault? Hell no! I have changed nothing. It is the market that changed. And trust me, It will change back. You don't have to worry about that. This market is designed to knock out the emotionally weak traders.

Emotionally weak traders you will be eliminated in this market. Grow some balls, take some personal responsibility, and stay positive. This will be the only way to make it out of this market environment with your sanity intact.

I will see you at Investors Paradise. Aloha!

New Swing Longs: DJO CNH OME

New Swing Shorts: NONE

Longs Up On The Day: HMSY-35 IHS-76 AKAM-192 TYL-43 CXW-34 TTEC-32 MA-75 FCSE-50 SOFO-28 BAM-41 TSRA AHS PSPT JST LWAY SVNT IGLD ACGL MSTR IAAC PCBK FFH PCCC INAP DIVX BLUD CMCSA TSTC HEI FORR BONT FSH IMKTA BEBE IMA SMSC OMTR CVLT BMA SIGM BMRN STSTI MOS REGN WSH TSYS STZ NEWP GSTL MNG HNZ CMO NU GSL MRB

Stocks On Radar Screen: NYX APKT CVLL XOMA FLML KO TESS

Take All Of Your Profits/Cut All Of Your Losses: IIVI VVI D PEI PWR SVVS VSNT TWGP MNKD

Stock Market Suffers First Clear Day Of Distribution Since The Beginning Of The Rally.

A weaker than expected ISM manufacturing index reading helped send stocks into a semi-free fall. The number was the weakest number in over three years and traders did not like that at all. Where is the reverse Dow 12,000 bug

When the final bell rang, the SP 600 led the selloff with a 1.6% decline, the Nasdaq fell 1.4%, the SP 500 fell .7%, and the DJIA fell .4%. The sad news is that leading stocks took it worse with the IBD 100 and IBD 85-85 index both falling over 2%. The SOX index fell 2.1%, indicating speculative money is indeed not around. The SOX is now officially ready to begin its rollover.

Volume was higher on the NYSE and the Nasdaq, marking a clear distribution day for the indexes. This is the first clear distribution day I have seen the whole uptrend.

Breadth was more than 2-to-1 negative on the NYSE and the Nasdaq.

I tell you what the past three weeks or whatever it has been of earnings reports has shown how wild and crazy this uptrend has been. So many stocks make gains just to get destroyed by missing. I keep saying I hate Reg FD but I think I hate this market environment more for its choppiness. Funny thing is the VIX is historically extremely low. Not sure how to swallow that.

What I do understand is the action in my stocks. I have some very nice charts that are acting quite normal but am starting to get profit taking or straight up "sell all" signals with a lot of my holdings. Luckily the majority of the stocks pulling back have already seen me lock in gains and I don't have too much to worry about. My account fell 1.9% on the day and I had well over 2-to-1 negative stocks to up stocks. I would call that a victory, if you ask me.

You have to understand this rally has been built on a foundation of crap. Big cap stocks led the beginning of the rally and after small caps joined they immediately start sputtering. The fact that the SOX has the early look of an index rolling over after failing the breakout in October just adds another warning flag that we must be ready to move to the sidelines in case the selling starts to come in.

A couple more days of the market down on higher volume with some 1% declines will have me worried that this uptrend is about to fail. The fact that many of my prettiest charts produced gains under 100% during this rally was the ultimate tell that the market may not be ready for more gains. If you look at the IBD 100, IBD 85/85, or any other leading stock index you can see they are nowhere near the May highs. This negative divergence must be respected now that the market may come under some selling.

What if the selling doesn't come in? Then you just keep doing what we have been doing the past three months. Buy stocks breaking out of beautiful bases that have excellent fundamentals and if they don't work cut your losses. It is that simple. You just don't go buy everything that I post in my blog as a long. You need to make sure it is a perfect setup for YOU. If the criteria isn't good enough for CANSLIM investors why should you trade it just because I am addicted to trading. My addiction should never be a recommendation to buy stocks like ATCO ICFI INO. Stick to the rules that have proven to work time and again with the greatest stock market winners and you will be fine in the long run.

The technical damage is not severe yet. We just need to be ready for the market to start a down leg. A day like today has a way of scaring traders, and fear has a nasty way of working fast in the markets. Nothing says that is going to happen but after a move like we have had where we didn't see any down days over 1% until recently should raise the level of caution in all traders that a pullback might happen.

I am still tired from the extremely fun night last night on Front Street. I have a question to ask. Is it possible to be more naked than naked? If you were on Front Street last night, you know exactly what I am talking about. But for EVERYONE else that reads this blog (which is everybody) I can only wish you could have seen the beauties and their incredibly HOT HOT HOT costumes. It was a great night!!

I will see you tomorrow at Investors Paradise.

New Swing Longs: D ICFI INO ATCO STSI

New Swing Shorts: NONE

Longs Up On The Day: HMSY-31 AOB-38 HRZ-47 DA-46 MA-70 AUXL-25 KNOL-160 RICK MIKR TNH ICE DUCK LMT IGLD LINTA APLX PCBK TRBN CVLT MAIL CBF OMTR ETE ULTR AZK MNG AXTI AEP NEXC HURN MOS PNW ETR NU AYE DCAI IONA

Take All Profits/Losses: FBNW BDX MDCI MCRS VARI PCTI DSCM CVO TRAD DIOD QSII CGX BVX

Stocks On Radar Screen: BNHN APKT DTE

Halloween Can't Stop This Market; Stocks Finish Higher On Higher Volume.

Market Commentary Before Opening Bell...that is if I get to it. Tonight is the "Mardi Gras of the Pacific." I live on the street that has the festival so I might not be able to get to the commentary.

New Swing Longs: JRVR AEP RJET TRBN MRB

Adding To Longs: SUAI

New Swing Shorts: NONE

Longs Up On The Day: AOB-34 HRZ-44 AKAM-193 DA-45 MA-50 BRLC-37 SOFO-28 IDEV-29 ABI-30 BAM-42 CELG PSPT ICE DIOD HMSY INAP NITE ROG LNET IMA SVNT CPA HRT BLUD CMCSA LINTA BEBE DKS IMKTA BMR APLX BONT IGLD DUCK MSTR BMC TTEC HEI TDY QSII BMTI MAIL ETE AWH ULTR ISIS MNG REGN AXTI SIGM AYE AUXL MFA AETH MOS NU HGSI NHP AZK ITC PCCC MNKD NEWP PNW SUAI APRO MOSS TP

Shorts Up On The Day: NONE

Cover All Shorts: MDG HYDL

Dump All Longs: NUVO VOCS AVNC WSTG SMSI CVA BIDU GILT OLAB NGA

Stocks On Radar Screen: TMI RCRC APKT ATCO OTEX VSL NWK

Halloween Scares Traders Away As Stocks End Mixed On Lower Volume.

It was a day of basically nothing. Stocks pretty much finished flat and mixed with traders not doing much. The most exciting and what you would think positive news was taken with a yawn--oil fell 3.9%.

At the close the DJIA lost 4 points, the SP 500 gained .04%, the SP 600 gained .4%, and the Nasdaq recovered some of Friday's losses gaining .56%.

Volume was much lower on the Nasdaq and lower on the NYSE.

The only thing I can even think of to talk about today is...nothing! Nothing has changed since Friday. I swear to God, you will not find me lost for words very often. However, this market today offered me nothing exciting to talk about.

Nothing has changed since this weekend. Therefore, if you have not read my last week post, do so now. This will get you caught up to where we are today. Nothing, once again, has changed.

The only thing odd about today is the lack of volume. If volume is lower tomorrow also, I guess we can come to the conclusion that Halloween has become a Wall Street pseudo-holiday. If volume is above average tomorrow then obviously my analysis is wrong.

The only thing not odd but refreshing was the leadership in the internet, semi, and networking sectors. However, is you look at the SOX, you will see that these markets are not leading sectors and that momentum money is surely not in these sectors. A bounce in this sector should only be treated as that.

Today lacked any catalyst and the rest of the week looks dull for market moving news. I guess we will see how hard market participants party tomorrow on Halloween.

Aloha and I will see you at Investors Paradise.

New Swing Longs: SMSI BIDU SIGM MFRI SFL

New Swing Shorts: NONE

Longs Up On The Day: Q-96 XING-37 INWK-36 AOB-26 LWAY-25 HRZ-39 CXW-36 TYL-51 SYKE-44 IHS-75 HRT IAAC APLX MIKR LMT TRAD DIVX BMC HEI DUCK TSTC QSII PCBK BEBE BLUD HCSG SMSC IIVI ININ ACGL AHS LNET MVSN FORR TCHC PSPT TWGP LTM ISE RSTI VARI CMCSA DIOD MDCI INAP FBNW DKS PRFT SEIC BMTI SAI AWH ULTR OMTR ETE ALSK MOS DSCM TSRA CPA NEWP SVVS VCP MNG NWL NGA NHP VVI AETH XNR MOSS OLP

Shorts Up On The Day: HYDL-15

Stocks On Watch List: PMD ULTI GCOM DR UAUA SXE KKD XOMA COH

Cut All The Losses: SMP

Stocks Pullback On Lower Volume; It Looked Scarier Than It Was.

After starting the day to the downside, thanks to a weak GDP report, stocks firmed up and appeared ready to close positive for the day. However, a late day report from Goldman Sachs stating that they are cutting growth forecast for motherboard shipments hit the market and stocks fell across the board.

When the final bell rang, The SP 600 and Nasdaq fell 1.2%, the SP 500 fell .8%, and the DJIA fell .6%. Leading stocks led to the downside with the IBD 100 falling 1.5%. The Philadelphia Semiconductor Sector index got hit for a 1.9%. The networking sector dropped 1.6%, and the computer hardware group fell 1.3%.

The only good news to come out of this decline was the fact that volume came in lower on both the NYSE and the Nasdaq. The volume receded a full 10% on the NYSE. This indicates funds weren’t necessarily stepping all over each other trying to dump stocks.

Decliners beat advancers by a 2-to-1 margin on the NYSE and the Nasdaq.

Despite the losses on Friday, it was a positive week for the markets. The SP 600 led to the upside with a .77% gain, the DJIA was up .73%, the SP 500 rallied .64%, the IBD 100 gained .4%, and the Nasdaq lagged with a .36% gain. Small caps are leading big caps which are leading tech stocks.

This market has been in a steady uptrend ever since the August follow-through and to get hit with one day of losses after such a nice uptrend is not something to get too worried about. However, at this point of the rally you would have to think some back and filling would be required to stage another run. Momentum is a hard beast to tame but a pullback here would be very refreshing. I don’t know if we will get it but I just want to make clear that I don’t see a pullback here as being a negative thing as long volume remains subdued.

This market has shown that it is irrational by far. Tons of stocks are getting taken out to the woodshed, once again, this earnings season and there is no signs in the charts that the damage was coming. One more time I want to thank the politicians for enacting another WORTHLESS Regulation; regulation FD. The other side of the irrationality is the constant highs in the indexes with no pullbacks. Something has got to give. When it does give, I am sure it is going to be choppy and a tiresome market. Until earnings season is over, there is still more of this irrational action to come.

I normally don’t place anything big on analyst notes or brokerage annoucements but it is clearly obvious that today’s late selloff was caused by the comments out of Goldman. This appears to be an overreaction but it also shows that bears are looking for any kind of news to jump all over. The buyers will have to come back soon so the bears don’t feel like pressing it to the downside.

Is the market going to start selling off or is this a little dip before more new highs? I don’t know. The only thing we all know is that we know nothing. The only way to combat this is to follow your buy and sell rules to a perfect T. Buying only the best stocks breaking out of clean bases with a hard cut loss plan is the best way to make money if this market shoots the moon or protect your money if the market shoots itself to shit.

I have done some portfolio cleaning and still remain very long. Getting rid of your laggards is the smartest thing to do here if you feel very uncertain. If you are long stocks that you bought a week to a month ago and it is showing you nothing or worse some losses, take some off the table. Remember, a stock after I take it or you take it should immediately move up. That is the ultimate “you got it right” tell. If the stock does not immediately move up, you know that something is not right. The breakout should have worked. The only proper move is to admit you are wrong (I know it is sooo hard; get over it) and move on.

Enjoy the weekend. I am out of here. I will see you at Investors Paradise.


New Swing Longs: MIKR ULTR GLBC

New Swing Shorts: NONE

Longs Up On The Day: TTEC-34 CHINA-27 DA-43 MA-45 Q-90 MEH-25 BRLC-34 ABI-32 CCOI-29 DECK LNET APLX MSTR LWAY ININ FORR CELG FTEK INAP CPA BEBE DUCK DKS CMCSA LINTA OMTR BMTI SAI ETE AWH TSYS CVA PHRM HGSI VCP NEWP AETH OLP

Shorts Up On The Day: MDG

Stocks On Radar Screen: KDN KKD IFLO MEND

Take All Your Proftis/Cut All Your Losses: ALXA IDXX WEBX ORB MPW CLS SIMG

The Nasdaq Leads A Strong Rally, On Heavier Trade; Breakout, Breakouts, And More Breakouts.

After an early morning dip, stocks fully recovered to close near the session's highs. A bunch of home sales figures were released on the day but they had no effect in stopping the DJIA from hitting another all-time high, the SP 500 another six year high, and the Nasdaq to five and a half year highs. How is this bearish, bears?

At the close the Nasdaq rallied .96%, the SP 600 rose .85%, the SP 500 gained .5%, and the DJIA rallied .24%. Leading stocks lagged the Small caps and techs, gaining .6%. The other leading stock index the IBD 85-85 rose 1.3%. It has more stocks and can catch more winners going up than the IBD 100 can. I consider this confirming the bullish moves in the index. Overall, not a bad day at all.

Volume was higher on the Nasdaq and lower on the NYSE and breadth was positive on both indexes by a 2-to-1 margin. The higher volume on the Nasdaq gives the index yet another clear accumulation day which helps alleviate from the mind the very weak distribution days the indexes had.

Today was a very great day for the indexes even know the results don't show it. Many many stocks are now creating very nice bases and I have tons of stocks now moving higher that I am long and am finding many new longs and soon to be new long (yes, I know I used the "and" instead of a comma). This is all very bullish and I have to listen to my charts as they say "we are going higher."

I have been very lucky to be away from the talking heads of the market the past two days. I forgot how important and wonderful it is to not get caught up in all the BULLSHIT intraday action that happens. The big money is not made intraday. I hate to break it to you "market watchers."

I was really impressed by the durable good orders as they rose 7.8%. That was the best in six years! Did you see those transport orders? They jumped 27.6%. Normally I don't give a flying leap of a bridge about these numbers but this number is very impressive.

But according to ABC CNN CBS NBC the economy sucks. Somebody forgot to tell the stock market and the economy that it sucks. Thank God we have borderline retarded journalist on these networks to tell us that gas prices are falling because Republicans are using it to gain votes. My question is why not keep it low the whole term? Most journalist are simply morons. Don't listen to them. Gather the facts on your own and then make a decision on your own.

If you are making decisions on your own and not listening to the idiots on TV then you are making money in this market, you are long stocks, you are not shorting every uptick, and trying to call the next top.

I am amazed I had time to even post this. These are the thoughts of this madman on this current rally. I keep saying over and over: "Once momentum starts, it is hard to stop." When the market is ready to move, it moves; it doesn't stop. While you wait for a pullback to feel safe to buy stocks, the markets keep going higher and higher. Maybe the market has topped. But I don't have this many breakouts in quality names at market tops.

It looks like the "I hate everything that GWB does" crowd is helping lie to the public. That is the perfect "wall of worry" for the market to climb. The constant bad news on Iraq and the bashing of one of the strongest economies ever only helps ensure that we will continue to move higher.

When the journalist are this brainfucked and brainwashed, this is what you get. BULLISH MARKETS! Your biased media is throwing everything at this economy and yet the markets keep hitting new highs. Can you really respect their biased reporting?

In 2001, Rothman and Amy Black updated the "Media Elite" survey of national journalists and established that 76% voted for Michael Dukakis in 1988 and 91% for Bill Clinton in 1992. A Freedom Forum Poll reinforced the "Media Elite" survey when it documented that 89% - nine out of 10 - Washington reporters and bureau chiefs voted for Clinton in 1992 and 7% voted for George Bush.

Ding, ding, ding! I will see you at Investors Paradise. Aloha from Maui where the "Mardi Gras of the Pacific" is about ready to start.


New Swing Longs: CELG LNET BLUD WSTG MSTR FFH IGLD SAI MAIL PCCC DSCM QDEL CCBL GSL TNH

Adding To Holdings: BMA SUAI

New Swing Shorts: NONE

Longs Outperforming: TTEC-32 KBAY-36 EVR-26 TYL-52 CTCM-47 SVNT-25 AKAM-212 IHS-77 XING-36 CXW-37 DA-43 HRZ-36 MA-44 SYKE-46 BRLC-33 CCOI-29 IDEV-29 TCHC LTM SMSC SIMG INAP PSPT WEBX CMCSA ORB LWAY ICE FTEK PRFT DIVX JST DIOD NSTC DKS ROG QSII IDXX MCRS TIBX BEAS VARI HCSG NITE MVSN FORR FSH IMKTA IIVI LINTA AHS FBNW HEI BITS TWGP RSTI HMSY TDY OMTR CVLT BMA CBF AWH NEWP TRT PHRM NAPS AETH PERY HGSI MDRX CVA MEH SMP ALTH TSRA ACGL VVI SCI ITC HURN BDX APLX SZE DCAI SUAI

Shorts Outperforming: HYDL-19

Stocks On Radar: OATS CROX ZOLL AIT USM ROP MIKR UARM GCOM RCRC THI APKT KSW LTS IKN LYTS TEO SYNA RMKR IOSP ZNH SCO

Take All Profits/Cut All Losses: KBAY BARI HB SIMO GISX INPH LMNX

FOMC Leaves Rates Unchanged; Major Market Indexes Rally, While Leading Stocks Retreat.

It was another wild Fed day filled with an up and down and back up move intraday. The FOMC left rates unchanged for the third meeting in a row. Stocks took the news well, with the DJIA hitting another all-time high and the SP 500 hitting six year highs.

At the final bell, the SP 600 led the way up with a .72% gain, the Nasdaq followed with a .5% gain, the SP 500 rose .35%, and the DJIA rallied .06%. The weakness was in the leading stocks, with the IBD 100 falling .09%. Not what you want to see on an up day.

Volume was higher on the Nasdaq and the NYSE, easing the distribution day (if you can call it that) yesterday on the Nasdaq. Breadth was positive on the NYSE by a 2-to-1 margin and positive on the Nasdaq by a 9-to-7 margin.

The gains were impressive today, considering the pressure that was put on the market early in the day. Oil rising $2, GM hurting the DJIA, existing home sales falling 1.9%, and many earnings disappointments were some of the things the market was able to beat back today.

The trouble areas are with leading stocks. Having leading stocks fall while the rest of the indexes rise is never positive and makes me wonder how much further upside is left in the short term.

Speaking of trouble, there are some things that really bother me about this rally. In my scan of longs I am having a lot of closed end funds, REITs, and medical stocks show up. These show up in bear markets. The weakness in the Semiconductor arena also worries me about the amount of speculative money that is in the market. Leaders are still lagging, overall, since the August follow through. By this time in the beginning of a rally they should be leading by a good margin. And the biggest problem: I have not been involved in a rally in the overall stock market for over two months and not have ANY stocks up near 100%. You could say RMTR was close moving 64% in three weeks but I still should have one or two stocks up 100%. I do not.

Does this mean that I am getting bearish? No. The trend is still in a solid uptrend and you see how well the bears have been doing the past three months. This simply means that my caution level has to rise. I am simple confused as to why this market is so slow moving up with the indexes like the SP 500 up over 6% this year. Last October, I had tons of stocks BLAZING by the overall market. This is the first uptrend since April-August 2000 where I have done worse than the market and have not reached old highs while another index has.

If you subscribe to RevShark’s service and follow all the top indexes of IBD, you will see that a lot of momentum CANSLIM investors are not doing well. Small profits are better than no profits but I like having stocks run 100% in two months and like having 5 out of 10 stocks move up 25% in two to three weeks. This rally has been lacking of any of that kind of action.

Yet here we are continuing to make higher highs. We will see what the next couple of days bring. I am not sure how much I am going to be able to contribute to the commentary the next three to four market sessions.

If you are not familiar with Halloween in Lahaina, then you would not understand. I will see you at Investors Paradise. Aloha!

New Swing Longs: AETH CLS HGSI TRT BMTI NEWP DCAI NAPS

Added To Existing Position Intraday: TSTC

New Swing Shorts: NONE

Longs Up On The Day: CVO-130 XING-34 AOB-27 HRZ-35 INWK-29 SYKE-43 DA-41 ABI-33 BRLC-29 CCOI-28 VOCS TSTC IAAC TCHC ISE LWAY SIMG SMSC IIVI KBAY WEBX TIBX HRT LINTA BEBE BEAS VARI DIOD SVNT FELE HCSG TWGP ROG AHS PCBK LTM INAP EVR CAB BMC ORB NITE FTEK NSTC MVSN OMTR MOS OMNI SMP PERY ADBE RWT MYE ETR MNG AYE NU NWL IDEV SCI MDRX BULK SZE SUAI IONA

Shorts Up On The Day: NONE

Cover Shorts Completely: ASA SM

Cut Your Loss/Take Your Profits: DDS NOC FLEX ISYS

Stocks On Radar Screen: APKT ACOR DR ANAD SUNW SYNA TOC

Despite Weakness In Techs, Stock Indexes Drifted To A Flat And Mixed Close In A Quiet Session.

The markets pretty much did what traders expected before the FOMC meeting finishes up tomorrow, flatlining and ending pretty much flat. The exception was the Nasdaq, after a poor sales forecast from TXN. Besides that, the DJIA hit another all-time high.

At the close, the SP 600 led with a .2% gain, the DJIA gained .09%, the SP 500 ticked higher by .03%, and the Nasdaq led to the downside with a .46% hit. Leading stocks led with a .3% gain on the 85-85 index and the IBD 100.

Volume was higher on both the NYSE and the Nasdaq. The higher volume on the Nasdaq gives the index its third distribution day in the past four weeks. However, this can hardly be counted as a clear cut distribution day.

Breadth was positive on the NYSE by 9-to-7 margin and negative on the Nasdaq by a 3-to-2 margin.

Even with the Nasdaq suffering another distribution day, it was another weak distro day. I only ended up selling off 3 stocks today. If this market was being distributed harder I would be sending off many more. It is also hard to call this a distribution day considering it was an inside day on the index. Most distribution days will break the support of the prior day's gains. It is definitely hard to say that sellers were in control.

The ugly news is the SOX. Watching it fall 1.1% does not give me confidence that the momentum money is ready to play. I am not sure if not having the hot money in the SOX is going to hurt. But I am sure it isn't going to help either.

This is the reason, I believe, that I still don't have any stocks up 100% or more since the rally started in August. Normally, by this time, I should have one to three up over 100%. It isn't happening this time.

However, the BTK--X, is still near that all-time high and I have a lot of beautiful biotech charts. So maybe that is where the "hot" money is going.

The beautiful news on today's market is that leading stocks are still leading the market. Since it retook the lead 3 weeks ago, leading stocks have continued to outperform the indexes to the upside and lag on the downside. This is bullish action.

Despite all the earnings reports, the market is still held hostage by the FOMC. We will see what tomorrow brings. I am sure it is an unchanged decision, leaving rates at 5.25%. I will see you at Investors Paradise. Aloha!



New Swing Longs: MCRS CVA MOSS BVX BMA

New Swing Shorts: NONE

Longs Up On The Day: AKAM-210 KNOL-173 TYL-46 CXW-36 MA-42 RMTR-45 HRZ-34 MWRK-32 INPH-35 RNST-26 ININ BITS AOB HMSY FSH FTEK HEI RSTI MDCI NSTC TRAD INAP FELE ISE TCHC ICE BEBE DIVX SIMG SVNT WEBX LMT QSII PSPT KBAY EVR XING LTM DECK FORR TWGP FBNW JST BONT MVSN ROG ALXA CBF PDSN OMNI OSIP DANKY CMCSA MNG MYE AIQ VVI NWL FLEX RWT IDEV BMR NU NYMX TP

Shorts Up On The Day: MDG

Stocks On Radar Screen: NUE SCA MR MAIL TZOO LTS MTOX

Leading Stocks and the Dow Jones Industrial Average Add Another Painful Day To The Bears Already Sad State Of Affairs.

With a Fed meeting on Tuesday, stocks started the week on a positive note for the bulls. The Dow Jones Industrial Average hit another all-time high and the SP 500 hit levels not seen since February 2001.

When all was said and done, the Dow Jones Industrial Average led the way with a .95% gain, the SP 500 rose .62%, the Nasdaq rallied .57%, and the SP 600 gained .23%. Oddly, even with smaller stocks doing worse than bigger stocks, the IBD 100 led all indexes with a 1.1% gain.

Volume was lower on the NYSE and the Nasdaq, ahead of the Fed meeting. Breadth was positive on the NYSE by a 9-to-7 margin and was basically even on the Nasdaq.

The best news I see today is that leading stocks led the market today. I see plenty of positive action in individual charts of the current IBD 100 and IBD 85-85 indexes.

The worst news I see today is the poor breadth in the overall market that had such good gains today. The fact that the Semiconductor, SP 600, and speculative stocks did so poorly shows that momentum money is on the sidelines waiting.

In my opinion, even with the big gains in the DJIA and the IBD 100, today was a wash with it favoring the bulls due to prices being up for the day. It’s hard to argue, with hard facts. With the trend still up, that is the side of the market I will operate on.

There sure wasn’t much else going on today. Except the talk about the FOMC meeting where rates should be left unchanged, it was a pretty dull day. Another fact that will be unchanged is the volatility of the markets during and after the announcement. Another fact is that volume will be quieter leading up to the announcement and much higher afterwards. With this kind of detailed insight, I am not sure where you can go wrong (saying this rolling my eyes).

I will see you tomorrow at Investors Paradise. TONS and TONS of information by me and other smart professional traders is posted constantly throughout the day there. If you only read this commentary and glance at my longs you are only getting a small portion of the whole package. I am online over 12-16 hours a day. The entire time I am at Investors Paradise. Do you want to know more about the longs? Do you want to get more info from my brief commentaries? Then Investors Paradise is where you will find this professional investor. Aloha and pray for big surf!!

New Swing Longs: HRT IAAC NGA AFT

New Swing Shorts: NONE

Longs Up On The Day (low vol non-IBD excluded): CTCM-46 CPA-30 CHINA-33 HIS-78 HRZ-30 SYKE-44 INWK-33 TYL-45 UAHC-27 STEC-33 MEH-26 BEAS DIVX EVR FTEK BEBE AHS LWAY JST BONT LINTA KBAY MVSN DKS NSTC LMT IIVI DIOD SEIC DECK SIMO TIBX BMC HCSG PRFT ICE FSH QSII FORR ORB ???? DJO IMKTA RSTI VARI ISE TRAK OMTR AWH CBF MSLV CCOI OSIP KFT HB CMCSA MOS REGN ICE TTEC NOC IDEV AYE ETR ILC

Shorts Up On The Day: HYDL-18 ASA SM MDG

Cover Shorts Completely: DDE ARLP

Stocks On Radar Screen: FRG GHDX ITNM BEN CAN NWK

Stocks End A Quiet Week With A Quiet And Flat Friday; Dip Buyers Helped Stop Morning Selloff.

After a brief morning selloff, a boring week came to an end with a boring Friday. The boredom was a bit odd considering how many earnings we had. Besides the lack of action in the indexes there isn't much to talk about. I guess, you could say, the biggest story of the day was CAT dropping 14%. But IBD readers already knew that that sector had topped. You can kiss the Machinery-Construction stocks goodbye now.

The market indexes didn't do much on Friday. The SP 500 rose .12%, the Dow Jones Industrial Average rose .08%, the Nasdaq fell .06%, and the SP 600 led to the downside with a .66% loss. The good news about today's market was the fact that the IBD 100 led with a .2% gain. That is always good to see.

Volume was a tad higher on the NYSE and lower on the Nasdaq. Basically a day where it is impossible to draw conclusions on what the big boys are doing.

Breadth was negative on the NYSE with decliners over advancers by a 6-to-5 margin and negative on the Nasdaq by a 3-to-2 margin.

For the week it was the fourth week of gains for the SP and the DJ. The DJ rose .35%, leading the indexes to the upside. The SP 500 rose .22%, the Nasdaq pulled back .64%, and the SP 600 eased back .31%.

It was positive to see stocks get supported all week long on any signs of weakness. Just check your daily candle charts and your 60 minute charts the past five days. Stocks got support off the lows after every selloff. Only one word to say: Niccceeee! (I can't get the new South Park episode out of my head, ugh!).

The dominant story of the market remains earnings. We had plenty of them this week that were basically worthless to the overall movement of the indexes. There are plenty more to come next week and a Fed meeting to deal with so I am sure this will dominate the headlines all week.

I will, however, concentrate on my longs. I am still overall happy to mildly relieved to see with all the volatile action this earnings season (AGAIN!; thanks REG FD) my stocks continue to act well and are not causing me any large losses. Most setbacks are coming after modest price gains. The losses that I am taking are coming from my more speculative or iffy chart situations. Those stocks are not causing large hits to my portfolio. But combine those with flatlining stocks and commissions and you can see things aren't entirely wonderful either.

It is still a traders market that is overbought on the short term on many different oscillators. Bulls are creeping back into all the market sentiment surveys and this should help start a pullback as too many traders are now bullish. This pullback will probably quickly turn those jumpy traders back to bears and the uptrend can then resume. Why? Because now that some markets are at all time highs it is going to be hard to stop that kind of momentum. It is all psychology. The indexes are not saying that they want to stop. Until that happens my that are going up or holding support will remain my tell to stay positioned to the long side.

Have a great weekend and I will see you at Investors Paradise!

New Swing Longs: TCHC MDCI CMO

New Swing Shorts: NONE

Longs Up On The Day (low vol non-IBD excluded): STEC-29 INPH-33 CXW-37 DA-42 CVO-126 SOFO-36 DIVX RICK HMSY CPA KBAY CAB SVNT PERY BITS NITE DJO PRFT JST AWH LWAY AYE BEBE EVR DUCK LTM ICE TIBX BEAS HCSG ISYS HRZ ABCB ETE FORR HOTJ CBF TSYS REGN SVVS MDRX VVI NU ASML PHRM TTEC ILC BULK NYMX SZE BARI GTSI

Shorts Up On The Day: DDE-22 HYDL-16 ARLP ASA SM MDG

Stocks On Radar Screen: OMCL GOOG CVGR MDV AVCA PMD STRS UU GCOM NIHD RDYN SAI CREL SYNA ECGI SOV FTGX GGY MFRI NWK

Stocks Finish With Small Gains On Mixed Volume; It's All About GOOG, Afterhours.

The DJIA finally closed over the 12k mark! Yipee...whatever. Now that that is finally out of the way maybe we can get some peace and quiet over that number from all the financial TV networks. Besides the DJIA hitting that now-famous number, a weak Philly Fed report and a ton of earnings reports could do no harm or good for the market as the market failed to move.

At the close, the SP 600 led with a .42% gain, the Nasdaq and DJIA rallied .16%, and the SP 500 rallied .07%. The IBD 100 didn't lead but it didn't lag either, with a .2% gain.

Volume was lower on the Nasdaq and slightly higher on the NYSE. Breadth was negative on the NYSE by a 5-to-3 margin and negative on the Nasdaq by a 17-to-12 margin. Basically it was a meaningless day with a bit of a negative bias.

How about that GOOG afterhours? That might help the bulls catch some momentum but even if it doesn't there is one lesson to take away from this. It is never wise to be short a stock with EPS and sales growth rising quarter over quarter year over year by 70%.

Now back to the markets. Earnings were the dominate story of the day and will remain that way tomorrow after the GOOG numbers. Today's market showed no leadership whatsoever. The top groups were all in old leaders or just plain lagging sectors. I am not sure if it was because of rotation or just simple bidding up of old laggards for the big boys to unload but one thing is for sure momentum has slowed as the market has gotten overbought.

I still see a market pulling back quite normally. One or two disasters every three days in a portfolio of over 190 stocks is pretty darn good. That tells me that underneath the markets action my stocks are behaving in a normal fashion during a market pullback. If this pullback would be leading to something more severe I am 100% positive I would be cutting stocks left and right. However, everyday, I keep owning more and more stocks with nice chart patterns. The speculative ones are always rough, but the IBD stocks are doing very well, IF YOU BUY RIGHT.

Stocks like LOGI, HRZ, and NVEC show me that great earnings are being well rewarded. This makes me happy. At the same time, I see breakdowns in the SOX, and that worries me that momentum money may not be in the market.

That will make it harder for serious meaningful gains in the short term. A healthy SOX is very positive for momentum traders. When it lags, it usually makes it difficult to produce huge gains. Because as everyone knows the momentum money loves Semiconductor, Internet, and....Biotech stocks. Which leads me to this:

The Biotech sector has always been a home of hot money. If you look at the BTK--X, you will see we are not far away from new yearly and all-time highs. Breaking out to new highs without CNBC or the general market commentators bubbling over this is the greatest story not being told on Wall Street. Just like the AMEX breaking out to new highs in 2003 and the media completely missing it, the Biotech Index is about to breakout to all-time highs (look at your six year weekly chart) and the media is going to miss this too.

In the famous words of the police officers in Wednesday's South Park episode.....nicccceeeee!

Whew, I am so tired. I will see you tomorrow at Investors Paradise. SURFS UP! SURFS REALLY UP!!!

New Swing Longs: TSTC QSII

New Swing Speculative Longs: ISIS NYMX

New Swing Shorts: NONE

Longs Up (low vol non-IBD excluded: HRZ-27 CVO-125 AKAM-205 CHINA-34 TYL-47 XING-27 INWK-37 CTCM-33 STEC-25 MA-44 CLEC-59 FTEK EVR UAHC HCSG TRAD PSPT JST TWGP RICK KBAY DIOD TDY APLX LTM PERY ININ CAB FSH ROG MPW CPA ABCB DECK HMSY PRFT IMKTA GSTL PCBK BITS DIVX AYE BMC VARI BONT RVSB ETE FELE LINTA HURN SIMG NSTC AWH MVSN WEBX HEI ALXA CBF OMTR MNG MDRX APN REGN OSIP IDEV GISX FLEX VCP PNW RAH ITC ASML NU KFT VVI IONA BULK MSLV APRO

Shorts Up: NONE

Stocks On Radar Screen: LOGI MDV JSDA

No Market Commentary For Wednesday's Market.

I was too busy today to do any commentary.

New Swing Speculative Longs: OLP BULK TSYS DANKY DMRC XATA

Stocks Fall In Heavier Volume But Find Strong Intraday Support; No Major Selloffs In My Holdings.

Stocks finally pulled back, as I suggested it was time for them to last night on my blog. An unexpected jump in core producer prices got the blame as inflation worries became the topic of the day on Wall Street. The good news is that the weakness was supported intraday and stocks finished well off their lows.

At the close, the SP 600 and Nasdaq led to the downside with .8% losses, the SP 500 fell .4%, and the Dow Jones Industrial Average fell .3%. The IBD 100 did its job by not leading to the downside, only losing .5%.

Volume was higher, giving the indexes another distribution day. This was the second distribution day in five sessions. However, the intraday support makes it hard to call this a clear distribution day. Breadth was negative by over a 2-to-1 margin on both the NYSE and the Nasdaq.

I did not have ANY stocks break down, during today's session. Therefore the pullback doesn't have me worried at all. But two distribution days in a five sessions is a reason to keep an eye open for more. But, once again, unless my charts start rolling over this looks like nothing but a normal start of a pullback after a very strong market advance.

Another positive was leading stocks. I didn't see any breakdown. The fact that none of those stocks broke hard, along with my longs acting fine is enough of a reason to stay bullish on this market, even if we get a 5% pullback. My charts are going to have to simply breakdown before I become a bear. There is still NO reason at all for me to be bearish on this market.

Earnings, earnings, earnings...that is all that we are going to hear about for the rest of the week. So enjoy an earfull of BS from your usual CNBC talking heads. I will see you at Investors Paradise. Aloha!

New Swing Longs: MVSN ???? ITC

New Swing Shorts: NONE

Longs Up Today (low vol non-IBD excluded): RMTR-60 CLEC-51 IIVI-32 MWRK-34 DA-38 SOFO-29 RNST-27 BOT ICE UAHC ISE JST CHINA BITS VOCS PRFT NITE DIVX ETE PERY AHS AWH NSTC HRZ AYE BONT LWAY LTM LINTA DUCK CGX FBNW FORR PT ISYS HOTJ ALXA TRAK CVLT CCOI OSIP ALTH FSH ETR MEH SVNT VARI NXL GSTL SMP PEI NUVO REGN MYE NFLD VVI AIQ STZ RMR

Shorts Up Today: DDE-20 HYDL-17 ASA SM MDG TDW

Cover Shorts Completely: KMP KMR

Stocks On Radar Screen: TSTC MCRS KSW RVBD ICFI LVLT INPC SIGM CMS SNMX FSII

Another Day Of Stock Gains On Lower Volume; Pullback Should Be Expected Soon.

For the third session in a row, stocks rose on lower volume. The headlines of the day included the DJIA hitting new all time highs again, the SP 500 hitting highs not seen since February 2001, and the Nasdaq hitting six month highs.

At the close the SP 600 gained 1%, the Nasdaq rallied .3%, the SP 500 rose .25%, and the Dow Jones Industrial Average rose .2%. The best news on today's gains came from the IBD 100. That index managed a 1.2% gain, well outpacing the overall market gains.

Volume, once again, came in lower on both the NYSE and the Nasdaq. Breadth was positive by more than a 2-to-1 margin on both exchanges.

It was a weird day of leadership as the laggards (old leaders) in Metals and Oil & Gas took the top spotlights. The weakest sector today was in Retail. With this kind of backwards leadership you wouldn't think the IBD 100 and leading stocks would have done well; but they did.

The one thing I am sick of already is all the talk about Dow 12k. It is BS and meaningless to the overall game of making money in stocks. Too much attention has been put on this irrelevant number and now that all this attention has been placed on it I am sure this number will be worthless to most traders.

The important thing to watch isn't some silly arbitrary number. The most important way to follow the markets is by watching the action in leading stocks and counting the number of distribution days we see during the rally. This will give you the ultimate tell to how much strength this rally has. A random number is meaningless. The action of the market is what is important. Nobody knows when the market will stop going up or what number it might hit. It is all guess work and a waste of time to investors who need to make money NOW.

After reading Helene's column and seeing the Market Vane bull numbers (70%), it is becoming quite obvious that a pullback should be expected soon as now a lot of traders have realized this is a rally and are now probably late to the party. This uptrend is simply getting too obvious after one of the best quarters for stocks in three years and another month of gains.

It is earnings season and you know what that means. It is time to be careful and watch out for nasty surprises. It is very volatile out there and if you are long a stock before earnings make sure you pay close attention to it. Regulation FD has made the investment battlefield for chartist much harder during earnings season as info that was leaked out and appeared on the charts no longer appear until that big 20% swoon hits you.

With earnings season here I expect some wild action in the indexes. Remember, one more time, if your stocks has earnings coming up and you just bought it...watch it closely. Nobody likes to take unnecessary losses, especially if you did not buy right and you chased the stock. Those losses always hurt because not only did you buy wrong and break rules but then the reality hits you that you did wrong.

So be careful out there. I will see you at Investors Paradise.

New Swing Longs: ININ FELE PWR PEI ALTI MSLV

Adding To Current Holdings: SYKE BITS

New Swing Shorts: NONE

Longs Making Gains (low vol non-IBD excluded): CVO-131 SYKE-47 CPAK-36 INPH-58 IHS-80 TYL-48 INWK-30 DA-37 CXW-36 IIVI-27 CTCM-30 SEIC-25 MA-42 RMTR-34 OPEN BITS JST SIMG ROG HCSG LWAY RICK RSTI LINTA FTEK BEAS PERY SMSC APLX LTM BEBE EVR HRZ TDY KBAY ORB CAB PRFT CPA DIOD DKS BMC ISYS FORR NITE SIMO IDXX CGX PSPT AHS AYE UAHC WEBX FBNW DJO BOT ???? ACGL PT NSTC INAP OMTR CLVT TRAK OLAB PDSN ALTH APN AIQ IDEV REGN TIBX PNW NU MOS MNKD NXL SCI SMP STZ BMR ASML NHP IONA SUAI

Shorts Making Gains: ASA

Cover Shorts Completely: IXC CPE IPS TTI ZRAN

Cover Longs Completely: DLA SUMT OMRI

Take Partial Profits: CHINA NFLD MEH ICE XING

Stocks On Radar Screen: EZPW RBN TRLG MAN STRS LHCG APKT LOOP WOLF INPC IO CSX CWTR TLB

Bulls Keep Showing The Bears Why It Is Stupid To Fight The Trend

For the second day in a row, even with retail sales falling in September and disappointing economist, stocks defied the odds and rallied on lower volume.

At the close the SP 600 led to the upside with a .6% gain, the Nasdaq followed with a .5% gain, the SP 500 rallied .2%, and the Dow Jones Industrial Average managed a positive close with a .1% gain. The IBD 100 kept up with the top indexes producing a .7% gain on the day.

Volume came in lower on both exchanges and breadth was positive by a 3-to-2 margin on both exchanges.

For the week, the big winner was the SP 600 with a 3% gain, the Nasdaq also scored big gains with a 2.5% rise, the SP 500 rose 1.2%, and the DJIA rose .9%. A very good week for the bulls, to say the least. The best news came from the week came from the SOX index and the IBD 100. Both are showing combined leadership in this rally, with the SOX up 4.4% and the IBD 100 up 2.3%.

The awesome action in LRCX and the very pretty well formed base being built by the Semiconductor index has to be seen as a very bullish development. What could make it get ugly? The base in the SOX reverses. That would be a failed breakout and very negative. However, I see TONS of beautiful green charts in that sector so my money is on the SOX breaking out.

Even with the lower volume, the gains still look the same to my portfolio. Volume was running higher most of the session till the last hour, anyways. It appears that traders just decided to step out early and get an early start on the weekend. As everyone knows volume is normally a lot heavier in the final hours. On Friday, traders checked out early. Could it have been because of the Mets game? Who knows.

Another positive that can be taken away from this session is that we closed near the top levels of the day and on the DJIA did close at top levels. This shows that even with the low volume, stocks are being bid up and forcing shorts to cover. It still is not looking good for the bears.

Leading stocks did well but still are not completely leading yet. Keeping up with the SP 600 and Nasdaq is still very bullish. As long as this top index keeps getting fresh new candidates placed in the index and those candidates keep setting up, breaking out, or are doing both, I will be happy with this current rally and keep looking for long setups.

As long as this uptrend remains in play, it seems very silly to me to try to predict a top and turning point. The smartest thing would be to take your clues from individual stocks and the indexes. If the market starts flashing distribution days and you notice all of your stocks violating key bases, then it might be time to protect yourself and raise cash. Until that happens, don't fight this trend.

Get ready for a busy week full or earnings. It is sure to be a fun wild one, like it always is.

I will see you at Investors Paradise. Aloha!


New Swing Longs: CY AWH ???? ADBE OLAB APN GTSI VVI JST

Adding To Positions: TSRA SVVS ELOY

New Swing Shorts: NONE

Longs Up On The Day (low vol, non-IBD, excluded): CPAK-30 RMTR-32 MEH-27 CHINA-25 CVO-131 CTCM-30 MWRK-36 TYL-45 AKAM-217 IHS-76 OMRI-47 STEC-40 SYKE-42 SOFO-29 BITS HMSY BOT UAHC SIMG MPW TWGP IMA DIOD APLX ACGL SMSC DECK NSTC FBNW KBAY HURN CAB DLA BONT NITE INAP BEAS PERY BEBE AHS DUCK PSPT HRZ ROG SIMO LMT HOTJ ALXA CBF SUMT LYG SUMT TSRA MCTD SVVS REGN PCTI MNG BRLC ALSK IDEV MYE TIBX GISX AIQ GILT OPSW CMCSA MOS SMP ELOY

Shorts Up On The Day: DDE-19 KMR ARLP

Cover Shorts Completely: NGS NTE

Stocks On Radar Screen: NVEC LRCX GETI SPSX CVGR MCRS PCBK SIGM NEWP DPL ATRM EAR

Indexes Blast Off On Slightly Lower Volume; Bears Keep Getting Left Behind.

Good earning reports and a pretty tame reading from the Fed's beige book helped stocks explode to the upside, finishing near the best levels of the session. The DOW hit a new record high and the SP 500 hit new five year highs. Not sure what isn't bullish about that.

When all was said and done, the SP 600 led with a 1.9% gain, the Nasdaq followed with a 1.65% gain, the SP 500 rose .95%, and the DJIA rallied .8%. The IBD 100 gained 1.5% on the session, just underperforming the SP 600. However, being near the top, is pretty darn good.

Nasdaq volume was even to slightly lower, depending on where you get your data from. The NYSE finished with volume around 2% lighter than yesterday. Breadth was positive on both exchanges by over a 3-to-1 margin.

Even though volume was lower, the gains still happened. Rather if the gains came via the big boys buying stocks or the bidders bidding the prices to levels that forced shorts to cover, the fact remains that the bulls are still in control and if you were bearish you were wrong.

This market has proven over and over how silly it is to fight the trend. All the predictions and indicators have been wrong. Until prices rollover and join the indicators, there is no reason to think that this rally "should" be over anytime soon.

When you have 188 longs and 156 rise and NONE show signs of a climax top, it is really really really hard to think that this is over.

We don't have any climax runs that signal the end of an advance. When we hit these levels in the DOW back in 2000, tons of stocks were making climax runs. When we topped in May of this year, Gold, metal, and oil stocks were making climax or topping patterns. We simply do NOT have that now.

It is getting pretty late in this rally and I am starting to see some stocks blowup. However, this always happens anyways during earnings season. The question is how many are blowing up? The answer is not many. The other good news is the stocks that I own that are blowing up are doing so after producing some nice gains. If they were blowing up immediately after breaking out, we would be in a much worse situation. That is not happening yet so the trend remains our friend.

If you buy stocks breaking out of proper bases and you cut your losses on the stocks that don't work, you will do fine no matter how much this market keeps going up. You will not miss the boat. If you buy blindly the stocks that have made 20-30% runs after breaking out of a base, you are setting yourself up for some very painful pullbacks and some BIG losses.

It is still very very very negative out there in the world of stock market chatter. That probably means the bulls will keep this momentum train chugging along. We will see if tomorrow is another painful day for the bears on the stock market. Aloha and I will see you at Investors Paradise.

New Swing Longs: OPEN FBNW AYE TRAK OPSW MOS FSH

Adding To Holdings: DIVX SUMT

New Swing Shorts: NONE

Longs Outperforming (non-IBD low vol excluded): CVO-121 XING-45 TYL-43 SYKE-42 IHS-74 STEC-40 IIVI-28 SEIC-27 MWRK-34 CXW-36 MA-40 SOFO-25 FCSE-47 DIVX BONT AHS HEI AOB RSTI CHINA IMKTA EVR BEBE ORB PERY IMA LTM HURN DIOD FORR TDY FTEK HMSY SIMO PSYS ISE BMC HRZ KBAY HCSG DKS SMSC ROG CPAK MPW VOCS DLA BEAS CGX TRAD NSTC DJO PRFT TWGP LMT ISYS ABCB BITS LINTA CPA BOT IDXX ETE WEBX DUCK APLX PT SIMG LWAY DECK OMTR ALXA CVLT AUXL GSTL SUMT WEN MEH ASML CYBS VCP BMRN ALSK CMCSA BMR ROG BDX SCI NU NOC NHP STZ WSH NXL FLEX HB WGA SZE APRO

Shorts Outperforming: ARLP MDG

Cover Shorts Completely: WTI ATPG SPWR

Stocks On Radar Screen: RBC SAY NICE PKE VRGY NIHD TMO AXR RVSN ELE MR BMA ISIS CCBL BWNG MSFT VDSI ATO

Tragedy In NYC Overshadows Today's Trading; Markets Selloff But Find Late-Day Support.

Another volatile intraday session ended with stocks lower. A plane crash that killed Cory Lidle of the Yankees and hawkish comments from the FOMC helped the selling pick up around 2pm EST. But by the end of the day stocks finished off the lows, closing in the upper portion of their daily ranges.

When the bell rang, the SP 600 led to the downside with a .4% drop, the Nasdaq fell .3%, the SP 500 fell .26%, and the Dow Jones Industrial Average fell .13%. The bad news today was that leading stocks led to the downside with the IBD 100 and the IBD 85-85 falling .7%. The good news was that the SOX index rallied 1.3%.

Volume was higher on both the NYSE and the Nasdaq. That gave both indexes their first distribution day in over three weeks. However, the closes and small point loss suggest that stocks received heavier support than selling as the day went on. All indexes closed in the upper portion of their ranges. Hard to call that a scary distribution day.

It should also be noted that it is normal to see one or two distribution days every two weeks in a rally. It is what happens after those few bouts of distro that matters. If the market works them off, great. If more distro days pop up, then we have to take defensive action.

Breadth was negative by a 10-to-7 margin on the NYSE and negative by a 3-to-2 margin on the Nasdaq.

There was plenty of bad news today: AA earnings, DNA earnings, North Korea, free trades by BAC hitting other brokers, hawkish Fed comments, and the death of Lidle in a plane accident in the Upper East Side. Still stocks did not tumble. In fact, as I keep saying, they finished in the upper half of their trading ranges. Is this all the bears can do with all of this bad news? Yikes.

Financials did the worst today, overall. But an interesting fact amongst those is the fact that the leaders all held up well while all of the laggards like LM and AMTD fell. GS, MS, LEH, etc...continue to climb or pullback on lighter trade. This shows, that underneath, leading stocks are still doing well while the laggards keep falling.

The good news on the day was the SOX index. Seeing this index setting up in a nice cup with handle pattern is very promising. I don't like that it comes from a downtrend but the pattern is looking quite nice. I see a lot of stocks making bottoming patterns and have plenty of leading longs that are ready to make more gains. With the SOX setting up, we might see some more speculative money want to come in from the sidelines, since this is the momentum guys favorite sector.

It is earnings season and everyone should enjoy the fireworks. Not a lot changed today that has not been discussed about over and over. Read the past six post I have blogged and please go to Investors Paradise and read all the post posted today and yesterday. If you do that, you will know exactly what is going on right now. And that is way more important than guessing where we are going.

New Swing Longs: NSTC FLEX BVX CBF

New Swing Shorts: NONE

Longs Outperforming: AKAM-216 HSR-28 INPH-67 OMRI-43 INWK-32 SEIC-25 XING-39 ZONS-66 DA-37 TYL-39 FCSE-38 RMTR-26 BRLC-28 CLEC-51 CAB PRFT APLX RICK CTCM BMC IMKTA SMSC WEBX TDY CHINA DECK SIMG EVR DUCK ICE ACGL IMA BONT MPW FORR DKS PT IDXX HOTJ BMRN PHRM NXL CYBS SUMT NHP PCTI CMCSA SOFO SZE EMS APRO

Shorts Outperforming: DDE-20 HYDL-24 ZRAN-31 CPE-18 WTI KMP KMR NGS IXC ASA SM TTI MDG TDW ATPG

Stocks On Radar Screen: GYMB LRCX MVSN VBAC CKSW SBAC RTEC GLDN SYMC FNM PAE EAR

Investors Get Ready For 3Q Earnings (First Up: AA and DNA).

After a very wild day of trading with little news, stocks finished higher for the 2nd straight day in a row. The only news of the day was the same great news out of the Dow Jones Industrial Average. This time it came with .10 cents of hitting 11,878. Congrats, Dow.

At the close, the SP 600 led the indexes with a .23% gain, the SP 500 finished .2% higher, the Nasdaq followed with a .16% gain, and the Dow Jones Industrial Average cruised in with a .08% gain. The good news for the fifth day in a row was the fact that the IBD 100 led to the upside (or lagged to the downside) again, with a .4% gain. Just the way it is supposed to be.

Volume rose on both the NYSE and the Nasdaq, after a holiday shortened session on Monday which saw the bond market closed. Breadth was positive on both the NYSE and the Nasdaq by a 8-to-7 margin.

Even though the upside has cooled down the past three days, the bears still can not get much going on the downside. The longer the market holds these gains and shows no signs of rolling over, the more probable the dips will be bought by stranded longs and lost bears. Performance anxiety is bound to set in after such a great quarter for stocks. If the strength continues you can guarantee some traders will have to try to play catch up.

It is time for earnings season again. The way stocks have acted coming into earnings should be great news for shareholders. However, if stocks start blowing up everywhere then we will have to take defensive action and make the appropriate moves to protect our portfolio. Until that scenario happens, stocks are still acting like things are going to be fine and maintaining the status quo is the correct action to take.

The best scenario this earnings season is to see your stocks crush the EPS and sales guidance to the upside and then see those shares run. The other great news could be the stocks missing their EPS and sales growth but still make great runs. If that scenario happens, I would call that more bullish than the former situation.

The worst case scenario is no matter what the stock announces the stock sells off. If that is the case selling your shares and raising cash is normally the wisest of actions.

It seemed like a very boring day out there today. The intraday % swing on the indexes confirms that it just wasn't me that was bored; the market was bored too.

Enjoy the A's vs. Tigers game. Hopefully, we will have some fireworks tomorrow as the past two days have been quite dull. I will see you at Investors Paradise.

New Swing Longs: SCI KFT OMNI ILC

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excluded): CVO-122 ZONS-64 INWK-30 XING-38 OMRI-40 STEC-42 MWRK-35 CXW-38 TYL-38 BRLC-25 CLEC-50 RMTR PRFT DIVX CPA CTCM BITS ROG LWAY ABCB AOB UAHC ICE HRZ KBAY BONT TWGP PERY SEIC BMC HMSY CAB PSPT RSTI BEAS INAP CHINA IMKTA SYX LINTA DIOD SMSC ACGL RICK DLA ETE IDXX APLX EVR LMT AHS SIMO ISYS CVLT OMTR ALXA HDIX PHRM MNG AUXL SVNT VCP TIBX NFLD GISX MYE ZTM BDX HNZ NOC SPG STZ SOFO GMTC NOVA TP ZILG

Shorts Outperforming: ZRAN-30 KMP

Cover Short Completely: SWC USU

Stocks On Radar: UARM AVCA HOLX CASB OPEN GIL TXUI BARE BMTI NABI CKR HLTH ITC BDOG

Stocks Reverse Morning Weakness And Finish With Gains, On Columbus Day.

After the first hour and a half of poor market action, stocks shook off bad news out of North Korea and higher oil prices to finish with gains, on a day where the bond market was closed in honor of Columbus Day.

At the close the SP 600 led the way with a .7% gain, the tech laden Nasdaq followed with a .5% gain, the SP 500 rose .08%, and the Dow Jones Industrial Average rose .06%. For the fourth day in a row, leading stocks led with the SP 600 with a .7% gain. That is what you want to see in a good uptrending market.

Volume was much lower on both the NYSE and the Nasdaq as the bond market was closed for Columbus Day (Federal holiday). So it wasn't necessarily a lack of institutional investors bidding up stocks as much as some important market participants were not at the office today.

Breadth was positive on the NYSE by a 9-to-7 margin and positive on the Nasdaq by a 8-to-7 margin.

Tech, small caps, and leading stocks led to the upside, again today, over big caps and value stocks. Biotech, Retail, and Banks all joined the rally along with some ex-leaders in the Steel and Metals sectors.

The higher stock prices, after the news of North Korea'’s nuclear test, shows that stocks have priced in the lunacy of Kim Jong Il. Remember, back on the Fourth of July when he shot off some missiles then. Well the market obviously knew that wouldn'’t be the last we would hear from him. So I would take today's action as positive overall.

However, I think focusing on this horrible sex scandal over the threat from North Korea is one of the most irresponsible things the media can do. In saying that I can't remember the last time journalist really did anything to change the course of history for the better anyways. The lack of professionalism from the current liberal media (ABC NBC CBS CNN PBS) is beyond repair. I am sure there are more bombshells to come so they can try to steal the election in November. Whatever it is, you can guarantee, the leader of Iran will be smiling all the way to the nuclear silo. I am sure votes are more important than coming together to confront real evil.

Despite all the talk of an upcoming recession and all the bears out there, stocks keep on going higher. That is all that my bank account cares about NOW. What are stocks doing now? How much money am I making now? Not how much can I make "if" this happens.

Until the bears actually get control of the indexes and start to take them down on volume, you are still fooling yourself if you are denying this trend. There are too many stocks making your bearish arguments look foolish. Let me help you bears out.

I will tell you when to get bearish like I have been doing since I started this blog in March of 2005.

It is still a market for the bulls. Just look at all my recent longs and all the pretty charts out there. Facts and reality say if you want to make money now you do it on the bull side not the downside. The downside will come back into vogue when the market averages cooperate and start moving down. Until then you are playing the suckers game bears. Hope!

I will see you at Investors Paradise. Have a great night!

New Swing Longs: VOCS NUVO QD

Adding To Current Holdings: CACB SMP PCTI

New Swing Shorts: NONE

Longs Outperforming: HSR-26 ZONS-58 INPH-66 XING-31 IIVI-28 SYKE-41 MWRK-34 STEC-39 INWK AOB SYX EVR UAHC ORB BMC CACB IMKTA ROG BONT RICK CPAK TDY SIMG FTEK DKS MPW FORR DLA ISE SEIC NITE TRAD HRZ LINTA SIMO AHS SMSC LMT HCSG LTM CGX IMA DECK PERY PSYS CAB WEBX PSPT INAP KBAY PRFT DIVX CHINA DIOD DUCK ABCB ISYS CVLT OMTR SMP PCTI BRLC RWT ASML HB ZILG

Shorts Outperforming: HYDL-25 WTI KMP KMR IXC ARLP ASA SM MDG TDW ATPG

Stocks On Radar: CME TZOO BAMM TCHC ITG WSTG BRT VLLY PKE KSW BARE ISIS NABI GLDN GHCI ENZ RESP SY HAS BDOG GTSI

Market Suffers A Severe Selloff...NOT!; What Were The Bears Thinking?

Stocks ended the three day rally, as weaker than expected job growth and a selloff in GM helped contribute to the slight selloff. That is what CNBC told me. I, truthfully, just think it was time for a rest and traders simply took a break from buying equities.

By the closing bell, the SP 600 fell .5%, the SP 500 fell .3%, the Nasdaq fell .3%, and the Dow Jones Industrial Average fell .1%. The IBD 100 fell .4%. The good news about that is the fact that it didn't lead to the downside after leading the past two days to the upside over all the indexes. That is what I like to see, for a market that is rallying. The one sore spot was the Semi index down .9%.

Volume was lower on both exchanges which is very positive after two days of solid gains on above average volume. Breadth was negative on the NYSE by a 2-to-1 margin and negative on the Nasdaq by an 8-to-7 margin.

For the week the Nasdaq gained 1.8%, the SP 600 and Dow Jones Industrial Average gained 1.5%, and the SP 500 gained 1%. And the best news was that the IBD 100 lead all of them with a 1.9% gain. After such a strong previous quarter, stocks sure have not stepped where they left off. The other positive from the rally was the fact that NYMEX Crude fell 5% and Dec. Gold fell 5%.

This selloff in the metals could be what is fueling this rotation into better quality stocks in more growth and value oriented businesses. Hence the Dow Jones and the SP 600 making good gains the past week.

Today's pullback was nothing compared to all the gains we have seen the past quarter and the past week. The lower volume shows that the big boys are not bidding stocks up to dump YET but are buying stocks and letting the market pullback.

As I have mentioned here and at Investors Paradise at least 50x the small caps, tech , and leading stocks are showing leadership that the big caps had when the rally started. After four weeks of hearing this argument, like I have said earlier, this should now be put to rest with most critics of this rally.

Retesting the breakout areas of the Dow Jones Industrial Average would not be a surprise here and would be quite a welcome as that would setup a lot more stocks that I see having the potential to form some nice bases after having some big runs during the rally. As long as it is orderly and on low volume the pullback would be a very positive situation for stocks. If volume rises well then evidently we will have to reanalyze our charts and then make the appropriate moves. It isn't rocket science. I had a feeling if more people kept it simple, they would do 100x better.

This was a great week for longs! I can only "hope" that there will be more to come. I hope everyone had a great week. I know it was a fun one for me. I will see you at Investors Paradise.


New Swing Longs: FTEK TRAD GILT BARI

Adding To Current Holdings: NOVA KBAY

New Swing Shorts: NONE

Longs Outperforming: OMRI-40 INPH-55 IHS-75 MWRK-33 MA-50 HSR NOVA BOT UAHC TDY KBAY PERY EVR APLX CPAK ICE SYX LWAY ORB XING INWK RSTI ISYS BEBE HRZ DECK AHS BMR AVCA LINTA TIBX CACB ALXA CVLT ALSK MNKD FCSE SUMT RWT OSIP CCOI NFLD ISIG SVNT EMS PRCP AXTI

Shorts Outperforming: SWC-41 DDE-21 USU KMP KMR ARLP ASA IPS ATPG SPWR

Stocks On Radar Screen: ITC GOOG MAIL SIGA ENZ ARRO FSH DCI GTSI ILC NWK

Stocks Rally On Lower Volume; SP 600 and Leading Stocks Are Showing Leadership.

For the third day in a row, stocks rose across the board after a dull opening. After going nowhere basically for most of the day, by mid-afternoon stocks started to rise and by the end of the day were closing at their highs of the day.

At the close, the SP 600 led with a 1.2% gain, the Nasdaq followed with a .7% gain, the SP 500 rose .2%, and the Dow Jones Industrial Average rallied .1%. Leading stocks joined the SP 600 with a 1.4% gain on the IBD 100, leading the way.

Volume was lower on the NYSE and on the Nasdaq as it appears the rally might be getting a bit tired here. Breadth was positive on both exchanges by a 2-to-1 margin.

Leading stocks and small caps are now taking leading rolls in this rally. Like I said yesterday, this now should give no one an excuse for excusing this rally as just a big cap, poor breadth rally. Since this was one of the biggest complaints from most traders I know, this has hopefully convinced some of them that some stocks are in fact doing quite well. I know the advances in some stocks may seem not real but according to the brokerage statements they are real if they are cashed out today.

Today’s action seemed quite positive, in my opinion. Stocks were pretty much listless and just drifting around then after noon either bulls came back to work on what they started in August or the shorts sensed that the gains of yesterday were in fact the real deal and they may hold. Therefore, they covered their shorts into the close. That is what allowed the indexes to rise to their HOD’s.

Thank God, today was a much quieter day than yesterday. LOL. I did not feel the panic in the air like I felt it yesterday by overinvested bears and underinvested bulls. Sadly, the majority of these traders, are new to trading and have not learned that the market will be there forever and that there will be other rallies to invest in. Just because you missed this one or someone else is having success that you are not gives you no reason to lose your cool. However, I enjoy it when you do!! It is very fun to watch.

A pullback should be expected soon as people scramble to chase stocks that have rallied quite well since this follow-through day in August. But at the same time betting against momentum and the trend is a suckers play at best. I don’t know about you, but when I play any game on Wall Street or in Vegas I want the odds completely in my favor. If they are not and the trend is against me and my cut losses are hit I walk away and wait. So if you missed this move, no big deal; just stay patient and learn what you did wrong with this one so you don’t miss the next one.

The most important thing, however, is to never lose your cool. You should be playing this game like a world class poker player. How does Phil Ivey react when he wins a big hand? How does he act when he loses a big pot? He reacts the same way. There is nothing there. He is completely professional when it comes to this game of highs stress and wild emotions. Learn a lesson from Phil Ivey and learn to follow the trend and don’t argue with the market. And when you get it wrong, don’t freak out and player hate on the winners like RevShark. That just shows no class. There is only room for one classless guy in the world of stock trading. That is me.

I am very tired after the past two days of exciting baseball playoffs, excellent market action, and playing tour guide on the Upper West Side of Maui. I will see you tomorrow at Investors Paradise. Aloha!

Sidenote: New longs and other data will be finished before the opening bell. I have tour guide obligations to meet first.

New Swing Longs: INAP SMSC KBAY ETE GSTL

Adding To Current Positions: PERY PSYS MPW BRLC

New Swing Shorts: NONE

Longs Outperforming: AKAM-228 CVO-124 CXW-39 ZONS-58 INPH-51 IHS-73 OMRI-35 TYL-40 STEC-39 DA-38 SYKE-41 MA-45 CLEC-43 BAM-41 BONT PSPT HSR SYX HRZ RMTR IMA HCSG PSYS SIMG ICE WEBX IIVI DIVX UAHC INWK HURN DJO IMKTA ISYS LTM TWGP BEAS CACB CHINA BMR AHS ABCB LINTA HMSY ORB CPAK BITS PERY SXCI HEI ACGL CGX DLA BOT AOB IDXX AVCA SEIC CTCM ISE ROG TDY NITE DKS DUCK TIBX CAB APLX BMC SIMO OMTR HDIX BRLC VSNT LMNX SVVS CCOI MDRX FCSE ALSK ALTH MCDT MYE BMRN NHP REGN PCTI SPG SVNT AUXL MNKD NXL NFLD HB

Shorts Outperforming: HYDL-25

Stocks On Radar: NVEC TZOO CMI MVSN DVA FDS DHIL IHR OFSI COWN NGA FRG DSX ITC CCK

Why Do Traders Try To Predict The Future And Fight Trends?

Bad news from the ISM service index and comments from Ben about the housing slowdown was no match for excited bulls on the back of possible rate cuts. Stocks soared, after a slow start, with indexes closing at their highs of the day. Hello bears! If this didn't convince you have been wrong since the August follow-through I am not sure what will.

At the close the Nasdaq led the way with a 2.1% gain, the SP 600 followed with a 1.9% gain, the SP 500 rallied 1.2%, and the Dow Jones Industrial Average rallied 1.1%.

Volume was a good amount higher and was well above the 50 day volume average on both indexes. Breadth was positive on the Nasdaq by a 7-to-3 margin and positive on the NYSE by a 13-to-4 margin.

This rally was strong and its breadth was broad. Some of the leading sectors included Internet, Software, Retail, Commercial Staffing, and Transportation stocks. This is bullish having all sorts of different industry groups moving up with a lot of stocks in each group participating in the rally. I know it says breadth is weak overall compared to previous highs. But in the industries that had the biggest gains today you can find many great looking charts in the group.

Large caps have been leading but small caps showed some major leadership today. I am seeing a lot more nice charts for traders to trade. If small caps, techs, and leading stocks keep making this many nice bases with green charts there should be no reason for anyone to complain about a lack of charts to trade. Also if the small caps and techs start leading nobody should be complaining about this rally. I think it would be funny to see them start to lead. If they don't, no big deal. That is why we have cut loss strategies.

There was a ton of negativity out there in the chatrooms and message boards I read. That tells me that a TON of people missed this whole move. That is awesome for me! I plan on getting more long if more charts keep popping up. If they do were not setting up I wouldn't be buying them now would I. The fact that stocks are forming bases and breaking out is all I need to know. I can worry about cutting losses if they don't work after I take my signal. It is all lined out in IBD'S CANSLIM. It isn't magic.

I am still hearing the overbought, too far too fast, negative divergences arguments and all I have to say to that is "I hear you." But look at your darn charts! What have the indexes been doing the past quarter? How many very green charts have setup broken out of bases and not violated sell rules? That is all the facts we need to know. Not some stupid overbought indicator. It is all fun to use. I use them all. But to trade off of them is just silly for long term gains.

Take profits in extended longs and don't get crazy on margin but don't expect a pullback to be too severe either. A TON of people have missed this move and they will be looking to get in on the action on any pullback.

What if the pullback gets severe? Well, if it does, cut your losses, raise cash, and take caution. I make money on what is happening now not what on I think might happen. That is not how I pay my bills.

Have you guys forgotten that since I started writing my blog I have NOT missed one important major turn in the market. Since March of 2005 I have ALWAYS been on the right side of the trend. Now is no different. If you don't believe me check out the October bottom on your charts then go read my blog. If you still don't believe me go check the May top on your charts and then go read my blog. So trust me bears this time ALSO you are wrong...for now. But when does it end? You and I don't know. That is why we play what is happening NOW. It is the whole basis of the CANSLIM system. The greatest stock market system in the business.

Aloha and I will see you at Investors Paradise.

New Swing Longs: BOT MPW PSYS EVR PERY REGN MNKD SVVS RWT LTM UAHC

Adding To Current Holdings: SIMO DIOD HURN NGPS PYX TSRA AVNC SUMT

New Swing Shorts: NONE

Longs Outperforming: AKAM-225 CVO-118 ZONS-51 SYKE-41 OMRI-30 MWRK-33 DA-38 IHS-66 TYL-36 INPH-45 STEC-36 AVNC-64 CLEC-40 BAM-40 TWGP SIMO XING ICE RICK CHINA DIOD ISE HEI HURN CPA ISYS SIMG NITE ABCB AOB BONT NGPS PSPT TIBX SEIC DECK SYX CAB BMC HCSG DKS INWK BEBE CGX IDXX ROG AHS BEAS TDY RSTI BMR LMT IMKTA HRZ DJO PT LWAY ORB IMA CACB ACGL BITS LINTA IIVI DLA DUCK CVLT OMTR MEH RAH BRLC NFLD WEN TSRA PYX BMRN CCOI SPG ASML CYBS GISX NHP VCP NXL HNZ STZ CMCSA OSIP WSH NWL NOC UHS ETR AXTI GMTC APRO SUMT SUAI

Shorts Outperforming: HYDL-25 ZRAN-34 NTE -41 TDW TTI IPS KMP

Stocks On Radar Screen: STKL MVSN AMG BKC MR COWN OFSI QDEL SKX HGSI ITC TRA STT CDWC UCTT

As The Dow Hits All Time Highs, The Bears Get Louder And Louder.

A HUGE 3.9% drop in oil to 58.68 and the Dow Jones Industrial Average hitting an all-time high after 6 1/2 yrs from making it the last time were the stories of the day. The positive developments helped stocks snap a two session losing streak. With all the good news over the Dow, however, one must remember the Nasdaq is still 55% off of the old highs.

At the close the Dow Jones Industrial Average rose .5%, the Nasdaq rose .3%, the SP 500 rose .2%, and the SP 600 fell .1%. The IBD 100 lagged the market, AGAIN, with a .3% decline. Small caps and leading stocks continue to underperform the big caps in this rally.

Volume was higher on the Nasdaq and much higher on the NYSE, with breadth pretty much even across the board.

Oil & Gas stocks took the brunt of the punishment today, while Financial, Retail, and Airlines outperformed. Have you guys seen MER, GS, MS, LEH, BAC, etc...? I am not sure but that looks bullish to me at least for the now. I am not sure how hitting new highs can be bearish. I don't think the shorts in those stocks agree that the market is bearish in those stocks.

All of the bearish arguments are great. I agree with them ALL! However, the current market for the past month has been in total disagreement and a lot of select individual stocks do not agree with the bearish argument either. They seem to be either moving slowly higher or still setting up in bullish patterns. Until they fail, the stocks still make good longs.

Some of those bear arguments of lower volume during the rally, poor breadth, and negative divergences underneath the market make great reasons to not trust this rally. The fact that there are not a TON of beautiful charts is enough too. But there still are some very good charts out there still to take. Not taking them is a mistake as when the real rally starts you will probably convince yourself then (if it isn't now) that the last rally didn't work why should this one? Not taking all setups in good stocks will eventually come back to hurt you when all the "talking points" do NOT come true.

If the market fails, trust me, like always, I will react, take my profits, cut my losses, and start shorting. Until then, once again, it is stupid to fight the market. There is simply no reason to fight the trend. No matter how weak it seems underneath, momentum can last a lot longer than you think it can.

This rally might be near the end of its advance. If that is the case, I will be cutting tons of stocks and taking many small losses. But until they give me a reason to sell, I am not selling for emotional reasons. Being emotional will get you killed in the stock market. Much more than taking small losses will.

I am worn out!!!!! Have a great day and I will see you at Investors Paradise.



New Swing Longs: BONT SPG DIVX ALXA

Adding To Positions: DIOD VSNT

New Swing Shorts: NONE

Longs Outperforming (low vol non-IBD excluded): AKAM-220 CVO-113 MWRK-30 STEC-36 TYL-34 HIS-63 INPH-43 CXW-29 ZONS-43 CLEC-31 HSR HMSY ABCB CAB AVCA ICE IMKTA CPA SYX PRFT ORB ACGL HRZ PSPT SXCI ISE DIOD DKS LINTA SIMG ROG CGX BEAS NITE RICK BEBE DECK TDY BMC CPAK BMR TWGP IMA SEIC DUCK HCSG IIVI HOTJ VSNT PCTI ALTH CMCSA TTEC HURN ETR NHP PNW MYE ASML WSH SUAI SMP

Shorts Outperforming: SWC-44 DDE-25 HYDL-22 CPE-23 ZRAN-34 WTI USU KMP IXC ARLP ASA SM IPS TTI MDG ATPG SPWR TDW

Stocks On Radar Screen: AH AXR CROX BRT ACE LEH CVGR LTM BARE IRS ALK JRT COL GLDN HRSH DECC

Stocks Pullback On Lighter Volume, On Yom Kippur.

Despite positive numbers from the SIA report showing semi sales jumped 10% and oil dropping 3%, stocks instead focused on the weak manufacturing data and closed lower for the second straight session. It could have just been an absence of bulls out there on the Yom Kippur holiday but no matter what the reason was stocks finished lower.

At the close techs and small caps led to the downside with the SP 600 falling 1% and the Nasdaq falling .9%. The big cap indexes did much better, with the SP 500 closing down .3% and the Dow Jones Industrial Average closing .1% lower. The IBD 100 lagged the big caps again but outperformed the small cap and tech indexes showing that a rotation into new leaders might finally be showing up.

Volume was slightly lower on both exchanges today. This was odd because many market talking mouths thought volume would be much lower; this includes me. Breadth was negative on the NYSE by a 6-to-5 margin and negative on the Nasdaq by a 2-to-1 margin.

The major stock indexes pullback on lighter volume today is a positive to see after the gains of last week. The count of distribution days is also about ready to get some relief as a couple of the distribution days from the previous month will come off the count by Friday. Currently there is 3 in the past four weeks. Not bad, considering the markets are higher since all the distribution days.

There still is some weak leadership out there. The rotation is slow but all the bases starting to show up along with all the stocks that I am long that have broken out and continue to make small gains indicate it could just be taking a while for a solid rotation to take place.

The IBD 100 is still not leading the whole market but it is outperforming small caps, as was mentioned above. So the quality of stocks in the IBD 100 are rising along with this market. That could set it up to start leading the market, should the market continue to rise.

There are still plenty of fresh longs even with the market being down the past two days. I was not getting that before from May-August. Now on down days I am getting plenty of stocks that are coming out of very green and pretty bases. It doesn’t mean they will all work but the fact that they exist now is proof enough that this market is in much better shape than it was in August.

Inside I still want to be bearish with all the possible indicators that are showing me that this rally is not the real deal. But the facts remain that this market has been going higher and is in a position for more gains. Until all those green, pretty, and uptrending charts turn into ugly charts there is simply NO reason to be bearish. This isn’t the best market but it sure as hell isn’t a poor market to make money in either. The only way to be missing out on this rally is if you are letting your opinions lie to you into not believing all the breakouts I am posting at IP everyday.

The markets should see some pressure tomorrow from MRVL. But that stock has been a laggard since May. Anyone still long that POS needs to take some IBD lessons on how to sell stocks and cut losses.

With that I wish you well. Stay positive, mentally strong, physically fit, get plenty of rest, cut your losses when your stocks don’t rise, and I will see you at Investors Paradise.


New Swing Longs: NOVA DLA HOTJ MCDT VCP NOC PHRM SUAI RIF

Adding To Existing Positions: CPAK IIVI

New Swing Shorts: NONE

Longs Outperforming: ZONS-43 INPH-41 MWRK-26 BAM-43 BITS CPAK IIVI HSR RICK CTCM LWAY GROW LMT APLX DKS RSTI DUCK CPA IDXX ROG BW SIMO BEBE EMS BMRN SVNT AUXL NU ETR NWL STZ RMTR SMP AXTI

Shorts Outperforming: HYDL-19 CPE-20 WTI KMP NGS KMR IXC SM TTI MDG TDW ATPG

Stocks On Radar Screen: AXR RAND STRS SRA AH BARE CREL CCBL BHE NIHD BOKF