Three Videos Are Up At BWT.COM For Subscribers Only…

August 18, 2008

…the first is a video about how ugly MPWR was and how I would never go long such a stock like that and how all of you that did go long confused me with your comments “but it was a nice chart.” LOL. Funny. It was NO WHERE NICE and this video will prove it by comparing it to a stock that is nice.

The second video is just a quick take on the current rally and the previous selloff and why this bear marker rally, that is now failing, will do just that: fail.

The third video is about the follow-through days of 2002 and 2003 and how STRONG THEY WERE compared to our weak rally now.

Click on Joshua Live! for the three videos.

Enjoy. I will be producing another one tonight that will compare this rally to the real rallies of 99, 02, 03, 04, 05, 06, and even how the 07 rally worked.

ALOHA!!!! I hope the videos are a nice feature for members with GOLD or PLATINUM status. Silver members do not receive the videos after the testing phase is done. In fact, I am not sure, the videos still might be available to everyone that reads this site. I am not sure. Give it a test. That is what it is all about. We know they work.

Fantasy Football Season is Upon Us, Can you take on the Big Wave Trading crew?

Here are the details:

Fantasy Football 2008

Click here

League ID: 418319
password: stocks

This is a great way to have a little friendly competition amongst Big Wave Traders. There are only 12 slots so if you are interested please sign up quickly!!! Plus with a relatively uninspiring Bear Market what better way to get your mind of stocks!!!

Best of luck, you'll need it.

Market Speculator

The Market Showed Its True Colors As The Day Went Along; I Don’t Care About The Weak Rally In The Nasdaq And SP 600 When The IBD Indexes Are Lagging S

August 16, 2008

I have made mention many times how I have produced some incredible returns in short, intermediate, and long-term time frames with some incredibly fantastic stocks. Sometimes they were perfect charts like in 1999, 2003, and 2004. Sometimes they were CANSLIM pure stocks like 1998, 2005, 2006, and 2007. But sometimes there is nothing to buy, even when a market rallies. This short rally on the SP 600 and Nasdaq has so many traders itching for action that it is becoming down right depressing.

The fact that so few can see the ugliness in the charts that they buy is disturbing and makes me wonder just exactly how many our learning from my past success instead of just piggy bagging off of some random idea.

Recently, I have had a rash of personal subscribers go long FUGLY charts like MPWR and MR. First off, I did not go long these stocks and I believe my PAST BIG WINNERS have proven that I know what to look for when it is time to get very long a certain stock. Second off, why did so many go long these two stocks. Were they really that nice? HECK NO. I have no clue how a newbie thinks because I have gone past that level. I went past that level when I started. I looked for answers myself that people meet me and just ask me. The bottom line it is simply amazing that we could have had five years of a bull market and NOBODY SHOWED UP yet this year, the year when the bull died, everyone shows up. This is the exact replay of 2000. And the facts show only 10-20% will be able to come out of this bear market with their accounts in tact.

Recently, I went long two stocks that made huge one day gains of 25% and 30%. I told some of those that bought them to take 25% to 33% off the table immediately because in this market everything fails. Those that did not listen has seen all their profits wiped away in one stock. I suggest taking profits in the other home run before the same thing happens. The facts are that this other stock has a higher chance of working out because the green in its charts came over a longer period and the stock is in the medical group increasing its chances for success.

However, unless you are professional you should not be investing anyways. But Joshua, IBD said that the market is in a “confirmed rally.” Well does a confirmed rally have the NYSE, DJIA, SP 500, and SSEC-x indexes trending under the 50 and 200 DMA? NO! All the indexes will be rallying. Not just the Nasdaq and SP 600. Anyways, to those that still DO NOT GET that a follow-through day does not guarantee a new bull market, can’t you tell something is wrong when breakouts soon fail like MR, MPWR, and OPTR. I can name about another 100 stocks that have broken out and failed recently. The fact that I did find that one gem out of 100 losers has some thinking that this is a bull. NO! The facts are that I can tell a beautiful chart in a strong sector from an ugly chart in a strong sector. While some were buying MR, I was going long that stock that recently just gave me a 65% gain in under two months and a big one day gain of 30% on a good buy. Did I load up on this stock? Of course not! This is not a bull market.

But Joshua what about the follow-through day? I will repeat this one more time, because obviously IBD has not said this enough for some of you: not every FTD launches a new bull market BUT NO BULL MARKET HAS EVER!!! STARTED WITHOUT A FOLLOW-THROUGH DAY. So just because the Nassy flashed one doesn’t mean that the whole market is ready to rock. Doesn’t it throw a HUGE RED FLAG that the IBD 85-85 and IBD 100 indexes are lagging so badly? I mean, folks, these are LEADING STOCKS. THAT MEANS THEY ARE SUPPOSED TO BE L E A D I N G! When leading stocks do not lead but instead lag and show that they are the weakest links in a weak market, you are supposed to be very long cash. That is why I keep saying CASH IS KING. Why? Because, in a market that has gone a whole .52% on the Nasdaq since January 11th, you are not supposed to be trading. The greatest traders of all time would be fully 100% in cash, so why aren’t you?

Even in small downtrends in 2005, 2006, 2007 (the start of November to January), I have proven that I can make a lot of money. But recently NONE of my shorts have worked. Why? There is no trend. At the same time almost none of my new longs are working. Why? Because there is no trend. There is no trend up or down and those of you that think you can trade the market the same way as you can a trending market using the CANSLIM system you are wrong. And if you think it is smart to drop a system that has produced the returns that you can see via my past big winners for a short-term oscillating market you need to realize that out of a system of 46 methodologies tracked by the AAII CANSLIM comes in the top three in overall returns since 1998 with a 1,500% return. The only two other methods beating the CANSLIM system are forms of the CANSLIM system with a touch of value investing thrown in. So the bottom line is that the way to make big money is to use the CANSLIM or a momentum type of system that has you going long leading stocks in a market trending up and have you go short the weakest fastest falling stocks in a bear. But when a market goes nowhere, don’t try to change your investing style. You will just end up making the losses worse.

Those that are not patient are going to get killed by this market as MPWR, MR, and OPTR’s will be lined all across the landscape until all the johny-come-latelys finally get exhausted and drop out. When these weak holders finally drop their stock into the strong holders hands the rally will come and most will not be long the right leading stocks. But those that subscribe to this site will not have to worry for I will be long the leaders and the best setups that exist when the tide turns. But for now you must remember unless your whole chart is loaded with green to max green BOP and strong accumulation there is no way you should make foolish breakout plays in a market that is not rewarding that type of action. Try a little bit of patience. It goes a long way in life.

Aloha and I will see you Monday where I will be doing my usual unbiased work on the market. During the weekend I plan on posting a few winners from 07, XCO from 08, and TZOO from 04. And know I did not get the whole move in TZOO like I did with TASR. But as you will see, just like TASR, TZOO clearly setup in a proper buy pattern that made it an easy choice to get long. When stocks are loaded with max green BOP, extremely strong accumulation, and have incredibly strong fundamental growth it doesn’t make it had to get real long…AS LONG AS THE TREND IS UP ON THE LONG, INTERMEDIATE, SUB-INTERMEDIATE, AND SHORT TERM TREND. Right now we are far from that. There is only ONE STOCK that I see setting up in a near-perfect to perfect pattern. In a good bull market I will see anywhere from 10-20 at once. So we are a long ways away. Patience young Jedi. Patience.

One more time, ALOHA!!!!

XSI Home Run

August 14, 2008

Finally a stock that has done exactly what it is supposed to do. That makes two in a week: CRD.b and XSI.

Congrats to all that loaded up. I was going to LOAD UP on XSI and instead kept it a regular position. The gains are still very nice and sweet and even though I blame myself for not LOADING UP like I said I was in the chat room I am still happy with the gains. Congratulations to all subscribers that bought these very pretty charts. They were not perfect but they sure acted like they were. This is how all of our longs will act at the start of a new bull market. In 1999 and 2003 they all acted like CRD.b and XSI. This is how it used to always be. Right now, we got lucky, and the market was so crazy I couldn’t even LOAD UP. Still some big gains 25% and 30% by each stock in one day. That is how it will be when the trend turns up again in the indexes. I can’t wait till this becomes the norm. For now though I have to kick myself for not following my own advice and loading up on XSI. My excuse is that it was too thin and the market is acting like a psychotic prisoner. Congratulations to everyone who got these beauties!!!

China’s Shanghai Composite Index Is Hitting New 52-Week Lows, Our Nasdaq Is Failing At The 200 DMA, Our DJIA Is Failing At The 50 DMA, And Yet I Keep

August 13, 2008

I am not sure why so many of you are bullish and for sure that you are “missing out” on some of the new gains of a fresh new bull market but last time I checked we have amazing charts in good strong bull markets. We don’t normally see the amount of distribution that litters the charting landscape right now. Normally, many charts, if you have hit a bottom, will be rallying on strong volume, with green to max green BOP, and with nice tight price action signaling that the weak flippers have left the stock market.

I know some of you do not like to hear this but China has been the leading index for years now. There GDP trumps our GDP and they are the industrial powerhouse now. The fact their index has fallen so much since the November top should be all the news. But I don’t here much talk about it. Too bad because a lot of lesson can be learned here. The fact that we have only fell around 20% while China has fell over 55% it can be said Relative Strength wise we are doing much better. But it also tells of how speculative Chinese stocks got. You don’t fall almost 60% unless your market was in some sort of bubble. What lesson should we learn. Well, I am not sure how much longer we are going to fall but I want to point out something on the SSEC-X (on Telechart).

In December the Chinese market started a rally. I am sure many were for sure that was a bottom. Nope. THen in February stocks started inching higher. I heard many say then (but Market Speculator was saying that the top was in) that the bottom was in. Nope. It continued to selloff till the April bounce. That for sure was the bottom right? Wrong again, as price went nowhere for around a month and then fell out of bed again. In July we saw yet another start of a rally. I heard from some that now that the Olympics were here that the Chinese market has bottomed and now it was clear sailing as the Olympic games would reignite the vigor for Chinese stocks. Whoops. Here we are rolling over yet again, hitting fresh new 52-week lows with the market selling off 4.47% on Friday and then falling a whopping 5.21%. That sent it to new 52-week lows and once again burned the bottom callers.

This should just be yet another lesson to those who can’t help calling bottoms. Do you remember the psycho women who told me to buy banks in January. She gave me great stocks to hold for the long-term that were bargains like LEH. What sage advice. Glad I didn’t listen. Bottom callers will FOREVER continue to be burned. Until they learn that the proper way to speculate is to buy high and sell higher in a bull market and to keep your cash in the coffers while in a bear, they will NEVEr succeed.

Those that bottom call are an egostical bunch and history has proven their strategies are far riskier and lackluster compared to the CANSLIM system which has constantly been in the top 2 to 3 methodologies when it comes to performance ratings since 1998. This is out of over 46 different systems. So this is no small sample. The CANSLIM system in good markets will make you filthy rich when you learn how to use it correctly. In a bear market it will save you from financial ruin. In a bull market value/bottom callers will do well (if they are skilled like Martin Zweig who uses a bit of CANSLIM with his value investing) only if they are the best. Most will not be able to make the gains the momentum/CANSLIM investors can make in uptrending markets. Just review my “past big winners.” I posted a new one today.

You can see the clear pop in price, volume, BOP, Relative Strength, and Moneystream that make it an obvious long to take a lot in. That was only a 133% gain from buy to top but how many “bottom callers” are making these kind of returns. Study my “past big winners” in the bull markets of 99, 03, 04, 05, an 06 and tell me that buying banks in January was smarter than going completely to cash. By the way while she would have had me short LEH, JPM, and MER–which ALL would have BROKEN me (thanks Sandy/Wendy–great advice!!)–I was able to go long XCO, PDO, and DGLY. The stocks I went long went up 50%, 100%, and 50% making this bear market a manageable market to keep my accounts above water. Meanwhile her suggestions would have left me B R O K E!!! Buying falling stocks if for suckers. Only suckers buy stocks that are falling in price. Especially in a bear market.

Please, don’t be a wall street sucker. Be a BIG WAVE winner. Trust me the bottom callers don’t make you a fortune in bull markets. My CANSLIM/momentum methodology can and IT WILL to the winning investor that learns to play the game the right way. Rule one: Put the odds in your favor. Those of you buying stocks in a downtrending need to stop. This is a losing game and it is going to cost you big if this market cracks wide open like China.

I want a bull market badly but until APII and EMIS charts with all that max green BOP and green price bars litter my charting landscape in higher quality names I refuse to get bullish on this market. Be careful out there and remember until a real follow-through day on much higher volume with a huge price gain that takes all the indicies above the moving averages, I will not be able to get bullish on this market. Study EMIS and APII to learn what I want to see all over the place before I will begin to call a bottom. If you don’t have Telechart, you wil not be able to see the green to max green BOP. Therefore I posted them in my forums. If you are a gold subscriber you may go there to take a look.

Aloha and I will see you tomorrow around noon EST. ALOHA!!

90% Of You That Started Trading Last Year Or This Year WILL FAIL! These Are Facts! Not My Opinion!

August 12, 2008

[2008.08.12 07:14:01] JoshuaHayes: they need to leave
[2008.08.12 07:14:05] JoshuaHayes: they need to quit trading
[2008.08.12 07:14:08] JoshuaHayes: to be so f’g stupid
[2008.08.12 07:14:10] JoshuaHayes: to see that the market
[2008.08.12 07:14:13] JoshuaHayes: has moved NOWHEER
[2008.08.12 07:14:15] JoshuaHayes: since january
[2008.08.12 07:14:18] JoshuaHayes: there is NO TREND
[2008.08.12 07:14:20] JoshuaHayes: over 10%
[2008.08.12 07:14:22] JoshuaHayes: up or down
[2008.08.12 07:14:24] JoshuaHayes: i did give you
[2008.08.12 07:14:25] JoshuaHayes: DGLY
[2008.08.12 07:14:26] JoshuaHayes: and PDO
[2008.08.12 07:14:29] JoshuaHayes: PDO was clear!!!!!!
[2008.08.12 07:14:34] JoshuaHayes: and if you do a search right now
[2008.08.12 07:14:37] JoshuaHayes: and look in 2003
[2008.08.12 07:14:43] JoshuaHayes: there were over 1000 stocks up over 100%
[2008.08.12 07:14:48] JoshuaHayes: by 2006 there were only 400
[2008.08.12 07:14:52] JoshuaHayes: this year there isnt even 20
[2008.08.12 07:14:55] JoshuaHayes: so use your brain
[2008.08.12 07:14:59] JoshuaHayes: NOBODY is marking money
[2008.08.12 07:15:06] JoshuaHayes: i mean cant ppl see that every mutual fund is losing money
[2008.08.12 07:15:08] JoshuaHayes: i think most new traders
[2008.08.12 07:15:11] JoshuaHayes: are idiots
[2008.08.12 07:15:14] JoshuaHayes: they have no clue about history
[2008.08.12 07:15:17] JoshuaHayes: and dont get that
[2008.08.12 07:15:19] JoshuaHayes: in a CRAP MARKET
[2008.08.12 07:15:23] JoshuaHayes: you GET CRAP RETURNS
[2008.08.12 07:15:25] JoshuaHayes: CRAP MARKETS
[2008.08.12 07:15:27] JoshuaHayes: go nowhere
[2008.08.12 07:15:30] JoshuaHayes: this is not and up or down
[2008.08.12 07:15:35] JoshuaHayes: i have my past results
[2008.08.12 07:15:38] JoshuaHayes: NO ONE SHOULD ARGUE with me
[2008.08.12 07:15:44] JoshuaHayes: or think “i suck now”
[2008.08.12 07:15:52] JoshuaHayes: you would be a MASSIVE IDIOT
[2008.08.12 07:15:59] JoshuaHayes: to think that i have “lost” my touch
[2008.08.12 07:16:03] JoshuaHayes: the next big bull
[2008.08.12 07:16:06] JoshuaHayes: that most traders
[2008.08.12 07:16:07] JoshuaHayes: 90%
[2008.08.12 07:16:09] JoshuaHayes: will not be a part of
[2008.08.12 07:16:13] mghens: anyone that reads your suggested list cannot and would not think that
[2008.08.12 07:16:14] JoshuaHayes: they can come back
[2008.08.12 07:16:17] JoshuaHayes: and see the AMAZING
[2008.08.12 07:16:21] JoshuaHayes: growth stocks like APII could be
[2008.08.12 07:16:26] JoshuaHayes: right
[2008.08.12 07:16:27] JoshuaHayes: but theer is
[2008.08.12 07:16:37] JoshuaHayes: everyone needs to just stop trading
[2008.08.12 07:16:43] JoshuaHayes: if they do this to STJ and AMED
[2008.08.12 07:16:52] JoshuaHayes: why is anyone long??????????
[2008.08.12 07:16:57] JoshuaHayes: 85% cash myself
[2008.08.12 07:17:01] JoshuaHayes: 50 small longs
[2008.08.12 07:17:05] JoshuaHayes: NONE are HOT!!~!!!!!!
[2008.08.12 07:17:08] JoshuaHayes: NONE NOEN NONE
[2008.08.12 07:17:10] JoshuaHayes: APII EMIS USAK
[2008.08.12 07:17:22] JoshuaHayes: are the only three stocks that look like they are goign to setup in the right bull market patterns
[2008.08.12 07:17:24] JoshuaHayes: with the green BOP
[2008.08.12 07:17:30] JoshuaHayes: and they are months to maybe a year early
[2008.08.12 07:17:34] JoshuaHayes: it takes a lon gtiem
[2008.08.12 07:17:37] JoshuaHayes: where was everyone in
[2008.08.12 07:17:38] JoshuaHayes: 2003
[2008.08.12 07:17:39] JoshuaHayes: ?
[2008.08.12 07:17:41] JoshuaHayes: 2004?
[2008.08.12 07:17:43] JoshuaHayes: 2005?
[2008.08.12 07:17:45] JoshuaHayes: 2006?
[2008.08.12 07:17:50] JoshuaHayes: they shyow up at the top in 2007 of course
[2008.08.12 07:17:52] JoshuaHayes: :)
[2008.08.12 07:17:54] JoshuaHayes: LIKE ALWYS
[2008.08.12 07:17:59] JoshuaHayes: where was everyone in 21996?
[2008.08.12 07:18:01] JoshuaHayes: 1996?
[2008.08.12 07:18:03] JoshuaHayes: 1997?
[2008.08.12 07:18:04] JoshuaHayes: 1998?
[2008.08.12 07:18:08] JoshuaHayes: 1999?
[2008.08.12 07:18:11] JoshuaHayes: then in 2000 THEY SHOW UP
[2008.08.12 07:18:15] JoshuaHayes: EVERYHWERE right at the top
[2008.08.12 07:18:19] JoshuaHayes: HISTORY NEVER STOPS REPEATING

Those that are not patient will fail in this market. This market will make the newbie go insane. I suggest you get to my book list and start reading everything about Jesse Livermore, everything Boik wrote, and read the How To Make Money in Stocks by O’Neil. Only then will some of you get it. This market has only one goal: to knock out the newbies who JUST entered the market.

Nasty Intraday Action Continues To Remind Me To Be Careful With This Rally

August 11, 2008

Some people are all excited and think the worst is over, even though there has not been a single up day on the indexes where volume was clearly huge that it was obvious institutions were back at work. For those that don’t think that is a big deal, I assume you don’t like making any kind of decent return on any long. For those of you who love to daytrade, I guess it doesn’t matter.

Sadly, this matter to us longer-term Home Run hitters. We still don’t have anything to get too excited about. I have two new longs tonight that look great and on Friday I gave you a near perfect chart pattern that produced a one-day huge grand slam with a 27% return today. Now that is how all of my longs are supposed to act in a bull market. And that is just that, if this was a bull market I would still be long the full 100% of CRD.b, but instead I am selling 25% into the big 27% one-day price gain. That is the difference between a bull and a bear. In a bull, you don’t sell the pops. You hold so that you can hit some big winners (I posted another 11 this weekend from 2004-2006) that can help turn you into a millionaire from a thousandaire. However, in a bear market, you just sell the pops. Because, eventually things run into resistance and return back to where they came.

One item of key resistance came with the Nasdaq’s 200 day moving average which seemed to halt the indexes advance that it was having today. Around 2pm EST it looked like the market was on to another short-squeezing (due to the low volume that is how we know it is a squeeze and not real accumulation) big pop. But instead the indexes reversed off the highs and the DJIA even dipped into the red to really emphasize to those that think the coast is clear that the coast is not clear. This reversal leaves us with negative candlestick bar charts on all our index charts. That combined with the higher volume is not bullish. To add to the gains the put/call ratio fell to a complacent .75 signaling that those that saw the pullback were still bigger believers in the rally.

If you are a super-short-term trader nothing is wrong with being bullish here. But for those of us who have been around longer than one year and have studied the market going back to 1896 personally (have read books going back to 1880) you start to realize that you are dealing with just a bear market rally UNTIL YOU ARE NOT. How do you know when you are not in a bear market rally. You have powerful follow-through days up between 3 to 5% with volume 20-30% higher than the day before. But not only that you have HOT! HOT! HOT! CANSLIM quality longs setting up all around you with broad leadership.

Right now, we have none of that. The only leaders we have our medical stocks. Medical stocks are our leading stocks and though there is nothing wrong with that, medical stocks leading while stocks are being destroyed all around us does not equal a bull market. What does equal a bull market? Simple. I want to see internet, semiconductor, computer, software, retail, banks, and other technology related stocks moving higher. Not anything that has to be used all the time like food, medical, and commercial services. I want real leadership.

You only get that in real bull markets and you only get real bull markets when the public gives up. With a VIX at 20 and a put/call at .75, you can be sure the public has not given up. I personally, after being a part of the bull market from 2003-2007 believe it will take a LONG TIME to knock out all the late “I wanna be a traders.” These newbies (about 90%) will have to give up from this difficult market before charts of late 2002 to late 2004 come back. How do I know too many newbies are around?

I have nothing but past big winners literring my website for those people interested in learning how to invest the right way to learn. However, even when stocks like ANTP in 2004 go up 300% in under a month some people ask me “is it too late to get long now and have I missed the rally.” This just shocks me that I have so many stocks up over 300% in late 2003, stocks up over 200% in 2004, and a couple of stocks move up over 500% in 2005 (BOOM and ERS) and yet people still ask me “that they think it is too late and they have missed most of the gains.” Well in a bear market, probably. But that is not why you are here. You are here to WAIT for the pefect chart pattern and then ATTACK. No matter what year it is in. Most of the best stock chart patterns come MONTHS AFTER markets make thier lows during a downtrend. Most of the greatest stocks of all time did not come on the day of the FTD (some did). Most came within the first month but still a TON (JUST BY REVIEWING MY SITE YOU CAN SEE THE PROOF FOR YOURSELF!!!) come months and months and even years after the FTD bottom.

Only those inexperienced or just plane ignorant of the market would make these kind of statements. However, I keep seeing them. So that with the fact that they are all looking for a bottom proves to me we are not yet at a bottom. I PRAY I AM WRONG AND THAT HOT! HOT! HOT! charts continue to form and that possibly if the market can get its act together, yet at the same time scare the public, we can have a LOT of base on base patterns. However, this remains to be seen. I personally think too many new investors are bullish and are looking for a bottom. As long as people are looking for a bottom there will be no bottom.

However, there are sure to be rallies to make money on the long side in this longer-term bear market that we are more-than-likely in. We already had PDO, DGLY, CRD.b, and XCO this year. They were not great. But they still made us enough money to make up for all the other mistakes made this year. It does NOT get any harder than this. Since January the market has not moved very far and that is obvious in all my accounts as they range from down 7% (was 4% until OFI) to up 9% (thanks to CRD.b). This is the worst market I have ever been a part of and before I make another huge move in the market the chart must be perfect and the trend must be up.

I ask you. Is the NYSE above the 50 or 200 day moving average? No!. Is the Nasdaq above the 200 DMA? No! Did the Nassy take the 50 DMA on the FTD? No! Did the SP600 retake the 50 and 200 DMA on strong volume in a nice round base? No! Are there more than a handful of HOT! charts setting up? No! Then why are we trying to call a bottom here?

CASH IS KING, even when a few stocks are moving up. I don’t play for nickles. I play for the big money. The big money can not be made right now. Be very careful out there and wait for more charts like APII to setup (if you don’t have Telechart you can see the stock in the forums by searching for APII). If you are not a subscriber to this site or to Telechart, what is wrong with you? Don’t you want to be the best? When I see APII charts setting up everywhere and see max green BOP dominate charts during the past three to six months, then I will get as bullish as all the newbies who are having “moments of grandeur” over a very weak 10% bounce. They seriously don’t come much worse than this. There are simply too few nice charts out there. When I see a lot more, you will notice a HUGE change in my writing.

For now it is all defense until EMIS, USAK, and APII charts start setting up all over the place in stocks that trade OVER $10 and OVER 100,000 shares a day. Until then, CASH IS KING! ALOHA!!!

Big Drop In Oil And A Big Rise In The Dollar Ignites Another Bear Rally.

August 10, 2008

How do we know it is a bear rally? Easy. Volume. Volume would not be heavy on the selloffs and light on the rebounds like it has been if this was real institutional investors. Besides that I ask you, if you were a bank or a mutual fund, would you be buying stocks knowing what kind of macro environment we are coming upon? I would think not.

The biggest surprise to Friday’s trading is the complete reversal of action from Thursday. After Thursday ran right into the 50 and 200 DMA resistance points on various indexes, it sure seemed like the trend was ready to push lower. But just when the market looks like it wants to breakdown, it breaks upwards. That is what markets due in bear markets. They do this to throw the shorts off. They make the longs and bears look bad until eventually both give up (like I have done a while ago). This is the right thing for the market to do. But the problem belongs with traders. Most will get frustrated and leave the game behind. The smart traders watch this up and down dance and wait for the big volume of the institutions to return. My bet is that when they do return they will return as sellers.

If you don’t think I have a list of stocks I want to get short that I was not able to get short or make big profits of from November to January, you are wrong. I am loaded with names of ag, oil, big-cap tech, and other gold/metal/mining related stocks that have been in bull markets anywhere from 2000 to 2003 all the way till this year. I am sorry but 5 to 8 years of price gains is a bit too much for me. Especially, that now I am finally starting to see excessive splits within some of these stocks in the chemical arena. However, at the same time I see some without and not too many are excessive so I don’t want to get too excited just yet.

But the facts remain that the outlook is for our GDP to come in the negative territory the upcoming quarter. The market is a forward looking beast and a weak ecomonomy should mean weak upcoming earnings and that should mean more estimates will be taken down which only mean one thing for a stock when that happens. Kaboom and goodnight. More stocks are seeing the dark nights of Hell instead of the bright lights of Heaven, no matter if they announce great, good, even, poor, or really bad earnings. The same thing seems to be happening anyways. Lower stock prices.

This kind of tape action (there really is no tape action since January) has left me twiddling my thumbs searching hard for something that could setup for either a bullish tape move or a bearish tape move. Those that have my forums have my “pretty charts,” “nasty charts,” “toppy charts,” and “possible future longs” sections to study from to learn what is topping out and what is setting up for a potential nice long or a potential nice short. Right now, it seriously, is pretty messy.

I do have one stock that I do put up on my computer screen on zoom 4 to help me sleep well at night. That stock is APII. If we are going to have an upcomig raging bull market a lot of stocks will start to look like that but will either pullback or flat base out on max green to green BOP, low volume on pullbacks, heavy volume on moves higher, and then will breakout with the max green BOP still in full effect. Just study those past big winners to see the truth. History always repeats itself and it will not be any different this time.

That is why you are not seeing me excited about this stupid “follow-through day” everyone keeps talking about. If some of you would take the time to study your 2002 market and your 2004 market which are your two most recent real FTD’s from severe bear markets you will notice some things existed then that do NOT exist now.

Back in 2002 from August through September through most of October the stock market sold off on VERY light volume. It wasn’t till the November volume that some action started happening. That action turned into a 4.42% up day as day 1 of the rally attempt was now on. Day two followed immediately with another 4% advance. Day three was an up day but it wasn’t much and volume was light which was then followed by day four (the BEST FTD’s come on day four–notice this one comes on day four) with the market jumping an incredible 5.1%. That took the index above the 50 DMA with a 5% move on the FTD. Those ignorant of the market BITCHED and BITCHED that they “missed all the gains.” Boo hoo. We missed them all. What these fools failed to know via their history is that this time SINA SOHU NTES USNA SSYS GRMN and a few others were setting up, breaking out, and looking great with max green BOP, huge volume and great price action charts. But the amateurs did nothing but complain.

The rally was looking good until about January when some stocks started to selloff with a few nasty days. But the key to all of this was that, once again, volume was below average on the down days signaling that institutions had no interest in selling. By this time, not only were the stocks just mentioned already putting on a beautiful display of green talent, now about 20-30 other stocks were setting up in bases that were long and flat and quiet and loaded with green to max green BOP. This then helped lead to 3-12-03 where the market had a nice little up day. Nothing to throw a party over. But the next day another huge rally hit the market with a 4.8% gain on volume at least 20% higher than the day before’s already heavier volume. This was now starting to look real good.

Day three was about as quiet as you could get on 3-14-03 as the market traded in an EXTREMELY TIGHT RANGE GOING NOWHERE for a -0.03% day. Then came day four. Day four is supposed to be the day you want to see a FTD if you have already had day one and day two under your belt. Well day four came and we got what we wanted. Not only was 3-17-03 a great follow-through day with a 3.88% rise on the Nasdaq, a 3% rise on the SP 600, and a 3.1% rise on the NYSE, but volume was once again around 25% higher than the day before which was once again a heavier volume day. By this time beautiful CANSLIM and max green BOP quality charts were setting up and some were breaking out all over the scans. The only difference between this rally and the 2002 rally. This time no one was around. The other difference. This FTD came with the Nasdaq retaking the 50 AND! 200 day moving average. It is incredible to have a FTD on such a strong move that it takes you over the 50 DMA but with it also taking us over the 200 DMA and with SSYS, GRMN, USNA, CRDN, SINA, SOHU, SINA, and HIL already being very heavy holdings in my portfolio it was clear something was different this time. Just thinking of HIL and how much money HIL made me makes me very happy right now (HIL is now HILL).

Until we have a market like this that has me feeling good like that one did, you can bet that I will have to suffer each and every day in a rough market just like you. This market is not any easier for a professional than it is a completely ignorant newbie (ignorant of the facts). I need a trend, either up or down (I can make big money in shorts to; just in November to January 50% gains were made in GRMN SGMS SIGM and CBEY) and right now there is not a single trend. So until there is a trend, I will be doing my best to help you understand how to make the most money possible when there is a trend. Be patient, REFUSE to let this market wear on you, and do NOT be the 90% that give up. YOU CAN DO IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I KNOW YOU CAN!!!!!

I Just Posted 10 More Past Big Winners. PLEASE STUDY THE CHART PATTERNS!

Until I see these chart patterns again, there is NOTHING FOR ME TO DO!!!!!!! I don't trade for pennies. I like to make 300% in one month. I don't then switch to daytrading during times like this because when it is time to go real big again you will have a warped sense when to sell and you will not have a SINGLE ONE of my 1999, 2003, 2004, 2005, or 2006 winners.

If you look at all my BEAUTIFUL MAX GREEN BOP charts and see those AMAZING gains produced via these incredible charts (which most of them were also CANSLIM quality stocks) and still think there is a better way well man....God bless you. Keep buying support and resistance. My methodology is proven to be of superior quality. This is why I have studied the greatest traders. So I can have stocks like this line-up my list of personal holdings.

Some of you need to go to 1999 and 2003 especially and memorize EVERY single one of those beautiful chart patterns. That way when this bear is over and a bull is ready THERE IS NO WAY YOU WILL OR COULD BE CAUGHT OFF GUARD. Those that make it through this--which will be only 10% of those that have opened and account within the past three years--will enjoy the next bull market unlike those that gave up. Most will give up. Are you?

I will be back later with a little look at our pathetic bounce that so many seem to think IS "the bottom." Amazing. This is an olympics, oil drops, dollar rallies kind of rally. This is not an institutional investor led rally. Short covering baby. This is what short squeezing looks like. Not real accumulation. If this was the bottom, people would be saying that stocks were going to continue to crash for sure. I see the VIX, I see the put/call ratio, I hear the talking douche-bags on TV. It isn't right for this to be a bottom. Everything is wrong. Bottom line, for this to be a volume, we are going to need to see a 3% to 5% up day on the Nasdaq where volume is 25% or higher than the day before, before I will believe this is a bottom. After I see that then I am sure I will find some of these.

There will be one more post before the market open. Aloha! For those reading this on another web site, please visit my website go to the longs drop down and select "past big winners." There you can go into any year and see MY personal BEST big winners. To make the list they all have to have been larger positions when I went long. Small longs and complete ugly charts that did well are not listed. Another option on the past big winners page is to look on the right side of the column and from there you can go to the actual year that you want to go to to see my big winners.

In this market environment you are either learning or you are losing money!

Longs Analys Detailed With Some Important Stock Market Information

August 10, 2008

For subscribers to the site, we are back online, after a NJ transformer exploded and knocked out 1,000 of website. We were one. Anyways, for those of you waiting for commentary, I have already updated the shorts and longs section–making the longs section very detailed about each stock and the overall condition of the current bear bounce. So if you need to whet your lips with some heavy “dope” about this market feel free to go to the longs page and get some knowledge.

For the freeloaders, I will be updating the site this weekend. It has been a busy weekend but the bottom line is you 1,2, and 3 year old ROOKIES/NEWBIES/FOOLS/COCKY CRANKY PEOPLE whatever you want to be called need to stop thinking you are tough shit. 90% of you will fail. So stop acting like you know it all in this market. The best traders ARE NOT DOING ANYTHING RIGHT NOW. Until you can figure out why the Home Run hitters aren’t swinging for pitches after all the data and reasons I have posted here the past three weeks there is not much else I can do to help your greedy behind.

What have you done for me last week? Nothing. What did I do for you in 1996, 1997, 1998, 1999, 2000, 2001, late 2002, 2003, 2004, 2005, 2006, early 2007, and with two stock in 2008. I MADE YOU FILTHY RICH. It is NOT my fault you are deciding to enter the market now in a bear market. That is your problem not mine. Where were you in 2003? Where were you in 2004? Study my past big winners and tell me if you want to make money like that or if you want to daytrade yourself to the poor house.

The ball is in your court. I have already won the game. Now I play for fun. I have turned an initial stake of $20,000 in NYC and Maui to a VERY LARGE six figure account (and that was while suffering emotional problems that took me down a wrong path of girls, booze, and drugs; the stock market made it all for me back) that has allowed me to open 4 separate accounts including an IRA. Why newbies with NO EXPERIENCE still try to “debate” me is FOOLISH. Just stop it and learn. Learn from some one who has PROVEN IN REAL TIME THAT HE IS SUCCESSFUL. I hide nothing. I show all my buys and show you all my sales!!!! What more do you want? My blood? Think about it.

Stay positive, don’t give up on the market and become a flipper/daytrader, know that this CANSLIM sytle will work for those that take the EFFORT to learn it. Lazy people will ALWAYS fail. LAZY PEOPLE do not do well with the CANSLIM system. Don’t be lazy it can reward you greatly. Do you really think I thought I could afford 10 years in Hawaii? HELL NO. Only one thing made it possible: proftis from the raging bullish stock market in 99, 03, 04, 05, and 06. 00, 01, 07, and 08 were OK. But early 02 and most of 08 is HORRIBLE. It isn’t my fault. It is the market’s fault. It will change. My question is will you? This is NOT rocket science! Keep it simple my friends. I don’t like seeing anyone fail but I have a few I am severly worried about (I am looking at you Yoni).

OK I will be back on Sunday before Monday with another update on this bear market. ALOHA!!

PS: Haven’t any of you studied the INDEPENDANT AAII analysis on the top 60 investment strategies? IBD ranks 3rd out of 60. The other top two are the EXACT SAME THING (a form of CANSLIM) but they implement more value metrics. This tracking has been going on since 1998. Here are a few links. Here is one. Here is another RECENT tidbit: ABOUT INVESTOR’S BUSINESS DAILY (IBD)

Investor’s Business Daily is a leading financial news and research organization recognized for proprietary stock screens, comparative performance ratings and a record of identifying stock leaders as they emerge. IBD’s companion website, Investors.com, offers stock tools and research for investors of every level. These include the IBD Learning Center, intraday reports on market action and the IBD StockCheckup(R). IBD hosts popular investment workshops and provides Home Study programs based on The CAN SLIM(R) Investing System. The newspaper was founded April 9, 1984 by William J. O’Neil, who originated the investing system that has outperformed major market indexes(a) for years. (a)The American Association of Individual Investors’ independent “real time” study found IBD’s CAN SLIM investing achieved +1521.7% vs. S&P 500 +54.92% for the past ten years (1998 through December 31, 2007, AAII Stock Screen). (C) 2008 Investor’s Business Daily, Inc., Investor’s Business Daily, IBD, CAN SLIM and corresponding logos are owned by Data Analysis, Inc., an affiliate of Investor’s Business Daily.

SITE IS BACK UP

Finally, the company in NJ is back online. Thank you for your patience. That was a first. I am off to run errands before fully updating the site. Aloha.

BWT.COM and BWT.NET update

The sites are still down after a transformer blew in NJ where our host is. They are working to repair it but there is still a link to get in the chat room if you have the direct link. If you do not email chris.maye@comcast.net with your login information and he will help you

So if you are having trouble reaching bigwavetrading.com or bigwavetrading.net, you can find us in the chat room as they are on the west coast and not affected by the transformer explosion in NJ.

Thank you for your patience!

The 50 Day Moving Average Proves To Be Strong Resistance; For A Real Bottom To Happen The Public Has To Give Up–We Are No Where Near That Yet

August 7, 2008

I am extremely busy right now and will expand on this later but like I have said many times before: the most successful rallies come when the Follow-Through Day comes with a move well over 3% and takes the prices over the 50 DMA. When you don’t get that on a FTD day you normally only have a bear market rally.

A lot of people are wondering why it is so hard to make money out there. Well folks just taking a look at your charts tells you why. Since January 29, 2008 till today 8/7/2008 (I think I was on a two-day chart when I posted these figures in the longs/shorts analysis–subscribers will see the small variation) the market has moved a WHOLE NEGATIVE .10 PERCENT. I hate to tell people who love to make money this but without a real trend it is OBVIOUSLY impossible to make money in the market.

For six-and-a-half months the market has moved nowhere and without a market moving more than 10% up or down it becomes impossible for trend followers to make big money. That is why since the big gap lower on 1/22 I have made absolutely ZERO for income. A job that has always provided me with income (minus the Jan 02-September 02 period) is right now making me its little you know what. For this to change one simple thing has to happen and it is very simple. A trend has to start.

I don’t care if this trend is up or down but the fact is that it must move at least more than 5%. Or else none of your stocks will have enough time to make anything since 3 out of 4 stocks follow the trend of the market the fact is that most stocks are going nowhere with the market. If they are going up or down they are giving horrible and poor price entries. So those of you that think that I should be killing the market right now are completely inexperienced and HAVE NO CLUE how the real market works. You need a trend to make money. Those that are making money now are going to make a LOT LESS in either a bull or bear market. This is a churning market. Just look at the market since 1/22. IT SIMPLE HAS GONE NOWHERE ALLOWING NO ONE TO MAKE MONEY.

I have my records of 1999-2008 available. Even this year we nailed three nice stocks in XCO, DGLY, and PDO. Even if BKE, BRKR, ACM, AEHR, and a few other failed. This continued the trend of late 2007 when only one perfect chart worked: APPY. Earlier in the year in 2007 we had AFSI and TESO as clear winners. These charts simply don’t exist anymore. If you want to look at the ONLY two pretty charts just now starting to setup you can look at EMIS and APII. Too bad they are too thin. If you have your TCNET setting the same as mine you can see how pretty APII and EMIS are. APII is the clear King in this joint but it is too thin and too young to be considered a long. There needs to be at least 5 more weeks before it can even be considered for a base. Things simply do not look good out there.

There is nothing else to add here that I have not already said. I am going from 25% invested to 10% invested OVER NIGHT! I really have no faith in this market and what it did to two of my prettiest stocks today (OFI and VRUS) proves to me the market is psychotic and that no rational person needs to have money on the line. There are so many times when the market is easier like 2003-2006 and 1999. There is no reason to work your butt off for nothing. Which is what everyone is doing right now. I think some of you need to relax, realize another bull will come, but first we need to see some real blood and “give-up” on the street before we can have REAL stocks (those that trade over $10 and over 100,000 shares a day) setup in the same pattern APII is in. When I see 10-100 APII’s setting up, then I know going 1000% on margin is here. Until that day, STAY OFF MARGIN and keep all your plays small, long and short.

Hopefully, we can top here and selloff 20%. That would give us at least a good amount of time to make money on shorts before catching another bounce which is probably all it will be for a long time. I think we have a while before my pretty green charts or CANSLIM stocks work again. Those of you who continue to try to go long in this market have still not had something bad happen to them.

Look at MR for God’s sake. This stock was THE ONLY stock coming up on all my fundamental and technical scans. I passed on it due to its rough chart which shows heavy volume selloff in March below the 200 DMA with red BOP and false breakouts in June. Before that it false broke out in October and December of 2007. So trusting the breakout yesterday was the furthest thing away from my mind.

The reaction today on the volume that was HUGE and trumped yesterday’s proves NOT EVEN MEDICAL stocks are safe here. One place is safe: CASH. CASH IS KING!!!! I have been saying that a LONG TIME and have been right the entire time.

I nailed the market top, rode the uptrend the WHOLE WAY FROM 2002, and have told you to be in cash for the past four to five months. Yet, people still will not FULLY listen to me when I tell them to wait. Impatience will kill you in this kind of a stock market. Exercise discipline, be patient, and wait to pick up the cash in the corner of a room when it is just laying there. These kind of markets lead to 2003 type of bull markets. It just takes time. Be patient, keep your head high, and your cash dry. ALOHA!!!!

Another Big Up Day But The Volume Is Lame, Medical Is Leading, And Innovative Tech Is Being Destroyed

August 6, 2008

Tech and bank stocks continue to receive no love, while the commodity stocks continue to top. The rotation, to me, is clearly going into medical and food stocks. I have listed a ton of stocks to be looking to get long and have gone long enough medical stocks that we have enough candidates to watch for possible buy points.

However, this doesn’t mean you have to trade. If some of you have not learned from “How to Make Money in Stock” or “Reminiscences of a Stock Operator” that there are times to be long, times to be short, and times to stay away, like now, then I don’t know what to tell you. I am still getting too many questions about stocks from people that are clueless that they are fighting a major freaking battle. No FTD has ever succeeded for a real bull market rally that sent stocks up 1000% of points that did not see the FTD bust through the 50 DMA and the best take both the 50 and 200 DMA out. So the fact that our FTD was so weak and that we took the 50 DMA today on the Nassy is still extremely weak. It is almost like watching an identical rally of January 2001 or the late September 2001 rally. No matter what I am not buying what I see.

I have taken some nice medical longs. But even in this market, the medical stocks, are not setting up in perfect patterns. I am not used to seeing so few and so lame max green chart stocks. This is turning out to be one severe bear market. Despite the few stocks that are moving higher, so many seem to ignore the NCR, NICE, ENS, and PCLN’s out there. Investing in this kind of market is silly and not my cup of tea.

I am trying to save so many of you by keeping you in cash and getting you long medical leaders (like MR and VAR) so that we can make a little bit of money. But with the market in a downtrend from the November highs, the odds are still against me. I don’t like anything 50% or lower. Right now, you have about a 33% of your stock working. Even ex-great looking longs have failed this year and great looking CANSLIM longs have failed. While this medical rally gets going I will enjoy the gains I can grab in there, while forgetting the short side until it becomes easier. Neither longs nor shorts are making money and that is what you get in a market that has gone NOWHERE from 4/4/08 to 8/6/08 (I am sorry the Nassy is up .31% during that time). If this doesn’t make it clear that the past three months have been impossible for longs or shorts to make EASY money NOTHING will convince how to trade right.

The best investment, like Rev said today, confirming what I said yesterday, is to wait for an explosion where a well known financial, bank, or mortgage company dives 50% or more and playing the bounce. Reversing the breakout in gold, oil, and agriculture was also a great countertrend play. However, with these selloffs I would stick to a 60-minute chart to get the longs at the exact moment when the bears are washed out and the bulls can take control. Overall, this market is too difficult for trend trading. And trend trading is what I do best and what I have made a career out of. So for now, I wait. I know a lot don’t like it but I am sure many of you reading this have lost money trying to play this market recently. So I hope I can convince you to stop and slow down and maybe only using 25% of your money to go long for now. Eventually a trend up or down will develop again but for now as you can see via the four months of the market going NOWHERE. Wait for a trend, if you are trend follower, it will come again. Aloha and I will see you in the chat room where the madness is made clear.

Another Selloff Hits The Market With Volume Well Below Average But Doing Just As Much Damage As Heavy Volume Would

The stock market indexes all continue to trend below the 50 day moving average with the 200 day moving average trailing right behind it. This is the most bearish possible scenario for the indexes to be in and looking to go long stocks with the indexes setup like this is just asking for trouble. However, the worst possible other factor is finally being relieved. I was not making money in my shorts recently with the market in this negative position but now my shorts are doing well and even the shorts that I lost due to reversals that were unexpected are doing very well.

This just goes back to underline how important it is to have guts. If the stock is breaking down on huge volume, with the indexes in clear downtrends, it makes sense that as long as the stock is within 20% of its old highs as long as the pattern is right then it makes sense to get short. I will be looking to get short as many mining, oil, metal, ag, and other stocks that have been rising since 2001 that are starting to show topping patterns.

Some of the most recent interesting stocks that appear to be topping since the oil stocks destruction has been the chemical stocks. Today the stocks TRA, MOS, POT, SQM, CLF, and AGU are all giving clear major topping and reversal signals. These charts have appeared to be topping before, especially TNH. However, TNH definitely looks to be rolling over now and if volume picks back up then I am sure this stock is dead. The problem is that unless these stocks give me a low volume pullback to the 50 DMA followed by another move through both the 50 and 200 on strong volume, I am sure I will be getting short quite a few of the old chemical leaders.

No matter how these play out unless this turns into another secular long term bearish market I will just be waiting patiently heavily in cash while making the proper trades in select longs (like medical and food stocks right now) and short the right stock that are ready to rollover and breakdown like a certain shipping stock i shorted today for a huge gain in one day. Also there have been some great very green medical longs that have produced 8% gains in one day. So it is just about being a really good stock picker. There are not going to be a lot of people that make it out of this tough market in tact. I am sure I will be just fine.

The only thing that continues to shock me is not that fact that none of the max green BOP charts are showing up. Even in other bear market there were some bullish sectors that had some nice charts with max green BOP and heavy volume accumulation. Stocks like GNSS were big winners in a bear market rally and hopefully we can get one of these soon.

Right now most stocks are breaking down and I know I keep saying the same thing but I have to make sure that we all have as much money as possible to use when the market is ready to go back into the 2003 mode that left us with so many stocks up 100% to 1000% with green to max green BOP charts that it moved into 2004 stick with CANSLIM stocsk. Remember, IST, AAPL, GPIC were all HUGE winners in 2004 which then led into 2005 with BOOM and ERS. That is when the HUGE gains stopped. The next big winners ranged from HRZ to PDO. They were not the same kind of power and they were not as easy to find and as “for sure” of a selection. But God knows that if we handled 2007 and 2008 so well that when the next bull market comes I am going to do the same thing to it that I did to 1999 with CMRC, JDSU, QCOM, LMLP, PARD, CAMP, NEWP, and so many others and 2003 when TASR, USNA, LCAV, EGHT, HIL, FMDAY, and so many other max green BOP beauties made me a small fortune. This time I will not party it away. Discipline now effects my whole life. We need more stocks to show up like EMIS, OFI, and VRUS in CANSLIM quality stocks before I get too excited. For now, cash is king, be careful out there, and I know I keep saying this but do not go long unless the chart is perfect.

A perfect uptrending bull market will come again and it will be easy to make money on the long side again. Right now is not that time. Please, be patient IT WILL PAY OFF!!! Aloha and I will see you in the chat room.

Ugly Open Reverses With A Strong And Choppy Intraday Session; Stocks Still Close Lower Despite The Intraday Rally

August 2, 2008

Even though inedexes closed down .5%, they really did not go very far but they did do it in a very choppy motion. So unless you like turbo trading support and resistance for peanuts then there really is not a whole lot to do. I do understand that some people love daytrading and love to spend all day trading. Well if you enjoyed Friday then you are for sure a diehard market fan. It simply is not the way I want to spend my time. Now rewind back to 1999. I was making a TON of money HOLDING stocks. Not daytrading. But if I was bored had access cash and did not have perfect stocks to invest I could and would daytrade. I have to admit it was not as much fun as I did not get to see my pretty max green BOP charts and I did not like the feeling my heart had when I had multiple positions on. But if that is what you like doing then enjoy daytrading.

Right now, I think trading to the downside is the right game but as it is clear the markets are trending below the 50 and 200 day moving average. I tell you what, if some of you are impatient and can not stand having on longs (even if the chat is ugly; why???) all you need to do is go out and have fun until you at least see the price bars above the 50 day moving average. Once you see that you know that in the short term prices are moving higher. Then you can go in and look for max green BOP beauties like my XSI long that I have on. It isn’t perfect but nothing is in this market. I just want you to study all the green all over that chart and notice the perfect bounce/breakout on volume in late June. If you still don’t see these after the 50 DMA is taken then sooner or later you will once the indexes prices on the averages cross back above the 200 DMA. Once the indexes are above the 50 and 200 DMA there will be a few green filled BOP charts (hopefully) for us to enjoy.

If not there will be at least some CANSLIM quality longs that will show up in our new leading industry groups that will produce some huge returns. Trust me when this market turns I will be in the leading stocks in the new leading industries with the perfect CANSLIM stocks. If the chart is loaded with max green and breaking out of a perfect pattern or the stock is a perfect CANSLIM quality long breaking out of a solid pattern we will be long and ready to make a lot of money.

I know a lot of people are sick of waiting this market out but that has to be done or else you looked like all those idiots that were yelling at me in January that the market bottomed an that buying bank stocks had to be done. Well some told me to load up on JPM, some told me to load up on GS (that wasn’t that bad of a pick), but some told me I was an idiot for not buying MER. Well thankfully I saved myself I think a 50% loss. But I do want to explain how I look for potential bottoms. First off I love to see sentiment like it is now. I think the put/call has backed back off which shows that we are bit too complacent which is not good. Before we were a bit fearful as the put/call hit numbers like 1.3 on the most recent low which was real bearish. That showed the dumb money was definitely buying puts which is bullish long term.

On top of that, the bears in the investors intelligence survey were just hitting 50%. That is the first time in five years that 1/2 of the newsletter writers were bearish. That goes along with the weak week before that showed only 27% bullish which was also a five-year low. These are some extreme numbers. The only thing that would have been better was a put/call ratio around 2.0 as the 1.3 reading while high was still below the 1.4 levels in March. Still it was bearish out there.

However, there is one stock in particular that I am watching to help tell me if we have put in a tradeable low. My first clue that we have one is that my two most recent near-perfect charts have hit me with immediate advances one lasting 15 trading sessions and one lasting one month. And one stock that had a HUGE bullish intraday reversal on the largest volume ever after many years is my bullish tell. I will need all three stocks to continue to work in fashion for me to believe that my baby rally with a weak market can last. It is just nice to know you that we can make some gains after such a long time of ugly action. DGLY and PDO were godsends while BRKR, BKE, BCO, and AEHR were typical of a market near the end of a bullish trend. I personally hope the worst is over but something deep down tells me “yeah right big boy.”

Some of the reasons I don’t believe we are at a real bottom is just because I hear too many people talking about how they would like this to be the bottom. That is not the usual “I give up” repsonse by most market players that I nomrally hear at bottoms. But I have to admit I only briefly catch stuff from CNBC, the free chat rooms, and random comments at Realmoney.com. But just those few visits tells me a lot about a market and even though many are VERY BEAISH on this market a lot are still “believing” in a bottom. Normally for there to be a real bottom people have to completely give up. I don’t feel like people have completely given up. I know that the fact that I see some hot chats working indicate to me that the market could be at a bottom. But if I don’t get much more from my two longs that are near-prefect and instead the gains end abruptly, like DGLY and PDO, I will be upset and sad and ready for more losses before we can get gains.

Trust me, my hot chart will come back, just like they have in all bull markets. But trust me that patience and finding other hobbies is necessary in markets like this. If you spend every day waiting for a TASR or FMDAY of 2003 to come along, you will wear yourself out and blow yourself out via boredom and burnout. Poor market conditions throw up too many ugly charts and unless you love shorting America and the market it is very possible that you will burn yourself out and by the time the end of a 2002 to 2003 market comes, you will be long gone and miss the beauties like USNA and EPIC. Both were beautiful and perfect and both were missed by 90% of investors who failed during the 2000-2002 market fallout.

Why did I survive and why will I survive this bear market and the next? I love this game!!! You must love this game if you are to make money. If you get involved in the stock market to make money, you can do it but it sure is not easy. My love of this market is the reason I am holding cash saving myself from financial ruin like so many others while being long a few stocks that are moving higher despite the falling market. I love this game and my love for this game ensures that you could make money if you too love this game. I promise you one thing. In my hands, you are very safe. Just study all my past big winners from 1999-2008, notice how similar they are, and remember I will find these and make a lot of money in the next market environment that rewards me for finding these kind of charts. I can’t wait. I hope you are excited as me. In fact, I hope you are more ecited than me. Some of you are but some of you are impatient. Thank God you were not around during 2000-2002, you never would have received SINA, SOHU, GRMN, SSYS, USNA, HIL, FMDAY, TASR, EPIC, EVOL, MOBE, or even IST, AAPL in 2004. Life was good then and life will be good again shortly.

It is very rough right now but without these moments, I would not have the moments like 1999 and 2003 that I use to make a career. Anyone can get lucky for a year, but can you beat the market year in and year out? Not only that when you have the chance to destroy the market do you? You must not beat the market every year but in the few years when the market is up 10% to 50% you need to beat the market by double to triple the returns. Once you get in a real bull market and the market gives you the max green BOP charts with top CANSLIM ratings you need to KILL the market. If you can do that while just beating the market in years like this you will make a fortune by the time you retire.

Those of you that read this site to get rich quick, you better pray I find another MAMA in December of 2006 or a BFUN in 2003. MAMA was a 230% gain in 11 days and BFUN was a 250% gain in 10 days. That doesn’t happen too often and both were max green BOP and huge accumulation charts that I went long for quick huge gains. They didn’t last long but I recognized it was beauty over CANSLIM quality and they were very fun. However, the chances of finding them again in this market are nill. We will need another exciting bull market. Don’t fall asleep. It will be a while. Aloha and I will see you in the chat room where quiet weekends turn into wild weeks. Just like I like it!!! ALOHA!!!!!

Nasty Reversal Below The 50 Day Moving Average Telegraphs Just How Weak This Market Is

It is never good to have a solid day that has so many people feeling contempt on higher prices reverse hard and show investors losses. But that is what we got today. Nothing short of the word disappointing can describe today’s price action. The reversal intraday of the good price action was a major disappointment to investors across the board.

However, if you are me, you actually welcome it because you know it promotes disgust which will eventually lead us, if not to a new bull market, at least a strong bounce. However, the even better news is that the one stock that I have been promoting for weeks to my paid subscribers in the platinum chat room was up over 3.5% today. That is a nice divergence and continues its nice path of beating the market. This is not the only long like this. I am also long a swath of medical stocks that are doing well. Including one stock that has setup in a POTENTIAL (nothing is for EVER for sure) powerful bullish pattern that could make us subscribers even more money in this nasty market.

I am hearing so many UNsuccess stories of this market from players on message boards and free chat rooms that I wonder why people can not just stop trading. It is so simple to just wait for a bull market. If you are unhealthy, use this time to go to the gym and get a book on tape of some of the books I recommended last night or have in my book section. If not that, take the time to go to the gym and read IBD. Whatever you do, do not force yourself to watch this market intraday unless you must. We have quite a few professionals in my chat room that can handle watching the market go from euphoria back down to reality and sometimes the other way where a bad day turns into an incredibly bullish day. We can watch this without having the prices effect us. But too many of you live and die by the latest tick. That is a sure way to the nut house in this market environment.

Some positives that have me believing we could be NEAR the lows of the current downtrend is the action in MER. Two sessions ago MER had a huge intraday bullish hammer reversal on HUGE volume and max green BOP. The volume was the highest ever and came AFTER a 75% decline. This usually tells me that the selling is washed out and that this stock was accumulated heavily with the max green BOP and huge volume surge. However, like I have said my entire life, nothing is for sure. If MER can not hold on to the 22 support, I have little conviction that this market will rally any time soon. However, if 22 can hold for a while, my faith in a more positive market to work with it will increase.

Some are really worried about the upcoming job numbers but I am telling you that all this stuff is pure noise. Do not fall into the trap of realmoney.com or CNBC and start jockying for a heads-up on the GDP report or the upcoming jobs numbers. All of this is noise to your actual index charts. Pay attention to the way they are acting. If you are doing that then you know this is not a market to be involved with. And if you are not listening to the junk that spews out of the local/cable media then you know there is only one safety place right now and that is medical. There are OF COURSE a few other groups but they are so small that I don’t really feel it is necessary to talk about them when they have something like 4 commercial services stocks hitting new 52-week highs when 20 medical stocks are doing the same. So if you are not listening about the jobs report you should be focused on going long medical stocks or staying in cash.

I know that kind of seems out of place considering where we were going on the commentary but trust me it is important that you do not get lost in all the BS that I am reading out there. I am very blessed in that I have been in this business almost 24/7 for 12 years. I know good information and I know bad information. Unless Ken Shreeve, William O’Neal, or Ken Heebner is on CNBC it is normally a waste of time. They are behind the curve and I wish more people would use their free 1 hour a day to not watch Cramer and instead would read all the investors education and investors corners in IBD. These educational tools are still read by me 12 years after I got involved with the market. There is never a time to stop learning.

And that brings me to my next point. Some of you are wanting to trade stock chart patterns that are horrible. I posted another two past big winners: one was KNOL from 2006 and the other was a smaller one with OIIM in 2007. Once again, these two chart patterns buy signals will teach you what we are looking for out there. Until we see stuff like LMLP in 99, GNSS in 01, TASR in 03, IST in 04, KNOL in 06, AFSI in 07, and DGLY in 08 there is no way I am going to let my cash position get over 50% in this market. RIght now, I am around 75% cash. But I would love to get more long if the market turns up. However, if the market doesn’t turn up there is no way I am just going to trade for the sake of trading.

Great luck out there, keep your longs/shorts small, and be very careful out there. And to all of you guys that are long the one stock that is making us over a 33% gain in under a month after setting up in a near-perfect chart pattern. WTG!!! You guys are going to make a lot of money when stocks with patterns that look like this BUT WITH MAX GREEN BOP, HUGE VOLUME, and an even tighter price action turn up left and right. Just like they do after every bear market. This too shall pass. ALOHA!!!

How I Deal With A Market That Does Not Reward Trend Following

July 30, 2008

I definitely, first off, do NOT watch CNBC. This should be the last thing all of you newer investors should do. A lot of people that watch CNBC tell me that they do not have enough time to read Investors Business Daily and instead find it easier to listen to the raving madness of Cramer. This is baloney. All you need is 20 minutes a day to read ‘the big picture,’ ‘the investors corners,’ and any of the other investors education articles.

If you do this every day, I realize that it will not be fast, but eventually you will learn the right way to make money in the market. The same way the greatest traders ever, which were detailed year by year by John Boik in his fabulous books, traded is the same way you should invest. If the greatest all invested a certain way, shouldn’t you to?

Some of you believe that you can outsmart the market or you are lazy and believe that a method that has been PROVEN not to work (using P/E ratios to buy and sell stocks) will work especially for you. This idea must be dropped and you must learn that some very smart people have learned that the best time to invest is ONLY when the market is in a clear uptrend. A few of the greatest of all time know to be long certain stocks even in a bear market. For instance, the smart money managers are long biotech and medical stocks right now while they sell financials. This is clear to those that are experienced but for the newbies this can be very confusing.

That is why you must start learning now. Learn now what worked in the 1890’s and learn what worked in the 1990’s. What worked then will work now. You can not give up in a bear market. If you lose money now, stop trading. Pick up some of the books that I have recommended on my site and get reading. When you notice the market starts going up again with a lot of stocks participating (right now that is not happening–hence the new lows beating the new highs), that is the time to get long again. But when only a few rally with the index it is still time to exercise caution and learn up on how the greatest of all time traded/invested.

You will quickly learn that they did not buy stocks against the trend. There are very few charts that are moving up and even though I know how to find them thanks to Telechart does not mean that most people will be able to play along. 75% of stocks follow the trend of the market. So if the trend is shaky or down, why try going long. Instead read those books that I have posted on my website. This is the only way to learn about the future; you must learn from the past.

Besides that I do one of the greatest things that I think everyone on the internet who is a professional should do. I have posted 70% of my biggest winners since 1999 on this website. I have posted them for free so that you can see what they looked like when I went long and you can see what they looked like when I sold them at the top. You can learn so much from these examples that I do not think some of you are taking the time to study and memorize patterns that showed up in the bull markets that ranged from LMLP in 99 to HRZ in 06 to PDO in 08. These patterns do not show up and work for no reason at all. History constantly repeats itself and while it is very important to pay attention to fundamentals at all time, when you get chart setups like this, including stocks like TESO and AFSI in 2007, you can not pass on the supply/demand setup. These charts have been posted to show you what some of my best stocks have looked like before they go on to their biggest runs. One thing should be noticed, 90% of the time the market trend is up with the stock.

I hope a lot of you are studying these stocks but some of you do not know when to sell to take profits. I here of some of you taking all of your profits on a stock once it is up 10%. Well, I guess you missed DGLY and PDO, even though the gains in BRKR and BKE did evaporate, they never hurt us enough to make a significant impact. Eventually another bull market, even if it is a bear market or choppy market bounce, and will give us another max green BOP beauty. Don’t be a sucker and pass on it like so many did on APPY in 2007. Until 2007, I can only remember one stock that broke out of one of my beautiful patterns that failed immediately. This told me that all the failures in 2007 and 2008 were warning us of this bear market that we are now in. But do not for one second think the patterns that worked in 2003 will not work again. Only those that give up now will miss out on this. Trust me that will be too many. Too many do not realize that markets like this are made for a reason. To get rid of the weak. That always helps the strong make a lot of money when the market does lift higher under its own natural movement.

Until that natural movement higher comes, there is still a lot of learning that new investors need to be doing. If any of you out there have not read/listened to “Reminiscences of a Stock Operator,” it is time to buy the book or buy the itunes edition of it and get that book under your belt. You will learn that even in 1920 a man figured out daytrading was not the way to big profits but instead a system similar to CANSLIM was the only way to major riches. This book will prove to you that nothing new is under the sun. What worked then will work now. The only time it doesn’t work real well is in choppy markets but even in a choppy market there will be up swings with some good stocks and some down swings with some real weak stocks. With $1 commissions now the norm to $5, there is no reason to take strong signals when you get them. Just make sure you cut your losses quickly if you are wrong. But if you are new you might want to wait for a bull; some of you sell way to fast and will NEVER hold a TASR. NEVER!!!!

How are you going to hold a TASR if you can’t even hold a stock like BAX moving up. Some of you need to buy the book “How to Make Money in Stocks” by William J. O’Neal and “How I Made Two Million Dollars in the Stock Market” by Nicolas Darvas. This will help you learn to hold a stock as it moves up instead of selling a rising stock way to early. You may get lucky once in a while and avoid a nasty selloff and lock in a 10% move. But when NTES or TASR moves 2000% in under 12 months and you are stuck with a 10% gain, trust me, my friend, you are going to be the donkey. And being the donkey is the last thing you want to be.

In this market a lot of donkeys are out there. There are only a handful of charts that are even nice and nothing is perfect. Until I see a perfect setup like ACM was SUPPOSED to be and would have been if the year was 2003 (those chart patterns like EGHT EVOL USNA SSYS etc… all made the same pattern and worked) there is no way I am going to get excited and call a bottom too quickly. I think we still probably have more pain in the commodity area. If that is the case, living on Maui sure is going to hurt.

Aloha and I will see you in the chat room where we can get back to the business of trying to find some max green BOP wanna-be’s. ALOHA!

Follow Through Day Hits The Indexes On Day 10; Remember, No Bull Market Has Ever Started Without A FTD. But Not All FTD Leads To A New Bull Market

July 29, 2008

This is one of those terms (FTD) that throw people for a loop when they here it. Most think that it means it is automatically time to go into the markets buying stocks. However, a FTD has to be accompanied by a few things to be a real FTD for me. First the selloff must lead into the FTD on low volume. We did not have low volume on the pullback this year. Second when I see a FTD the first thing I look for is the explosion in volume. How much volume was in on the FTD? Today, it was around a 16% to 18% increase in the indexes and while that is close to what I look for it was no where near the 20% increase in volume that I like to see.

For a perfect example of what I am talking about go back to 2003 and take a look at that FTD. The volume was huge and the price gains were enormous following a lower volume selloff. We do not have that this time and the fact that medical stocks are still the only stocks leading has me still not convinced we have a real follow through day here. Even if we do there will be plenty of time to jump on the bandwaggon and make a lot of money. Just study my 2003 and 2000 winners before the top. They showed up well past the initial follow-through day and still made me and a few investors very wealthy. It will happen again. Trust me. So if this is for real we will have plenty of time to get involved. And as you subscribers know I will be in the stocks that will be moving the most during the next bullish phase of this market.

The best news about all of this is watching oil come in. I am so happy for the rest of us that oil can continue to pullback and the fact that the charts look like they have definitely topped and that nothing is going to help them rise again. Many of us were able to profit on the bull market in oil stocks but it finally appears to be over. That is good news, not bad. Oil has fallen, I bliever, 25 points to $122.

If there is a chance we have seen a bottom it could in fact happen. We have had mutliple weeks of newsletter writers coming in with a bearish viewpoint than a bullish viewpoint. I believe it is seven weeks in a row according to IBD. That is a very long time for these usual perma-bulls to be bearish.

And this is so important that I am taking it straight out of IBD to show you exactly how bad it is. This is from today’s IBD’s Big Picture: Also, 15% of stocks in IBD’s database own Accumulation/Distribution Ratings of E, the worst possible grade. Typically you want to see that figure above 8% at the time of a follow-through, as it’s a sign of severe investor pessimism.

Remember one important tenet of follow-through days: Every bull market in Wall Street history started with a follow-through. But not every follow-through launches a new bull market.

This is just confirmation of my analysis that is trying to make sure that you do not do anything stupid and get too bullish too soon. Let the market continue to prove itself by offering up CANSLIM quality longs that are breakign out of perfect patterns. You will have at least a month of great stocks breaking out of great patterns before it becomes to late to get very long stocks in a safe moment where the market is not too far extended yet.

I still do not think we are there and think too many people are looking for a bottom for this to actually be a bottom. But I will change my mind if I could get a ton of stocks to setup and build those same chart patterns they did in 1999 and 2003. God were those great years. I hope we have one of those kind of years when this bear market is over.

I don’t have much to add to tonight to say that when I think a stock may have bottomed I want it to look like MER. Take a look at that bullish intraday reversal candlestick pattern, look at the HUGE VOLUME surge, and look at BOP go max green with TSV18 taking off also. This is what I like to see in a stock that I think is bottoming. Now, with me saying that, if MER does not rally and continue to rally on green BOP and strong volume and instead drops below the lows. That, my friends, will be very bearish.

So on that note, do NOT get too excited. Wait for the good charts to come to you. They are still not out there. I will leave you tonight with the final part of the IBD Big Picture which I think is important that everyone should read it even if you don’t have a subscription. If you do not have a sub to IBD….why not?????

FROM IBD: Financial stocks were among Tuesday’s top performers, following the announcement late Monday of Merrill Lynch’s (MER) latest write-down. The plans appeared to give the market some hope that the firm is working through its credit mess.

Bank of America, (BAC) Wachovia Bank (WB) and other financials banked hefty gains.

Better-than-expected earnings reports also stoked the market’s rally.

Amgen (AMGN) gained 1.80 to 62.28 in triple its normal trade. Late Monday, the biotech firm beat views and raised guidance. It boosted its full-year profit outlook to a range of $4.25 to $4.45 a share vs. estimates of $4.19 a share. Revenue is expected at $14.6 billion to $14.9 billion, or above views of $14.42 billion.

Amedisys (AMED) climbed 4.62 to 65.53 in heavy volume. The provider of home-nursing services grew Q2 earnings 44% to 82 cents a share, or 13 cents above views. Sales gained 85% to $312.7 million, easily beating forecasts of $288.3 million.

Concur Technologies (CNQR) gapped up and rose 5.15, or 14%, to a nine-year high of 41.20 in huge turnover, although it closed well off its intraday high.

American Express (AXP) said it bought a 13% stake in the software maker for $251 million.

A FLat To Down AND VERY BORING Week Comes To A Close Leaving Us Praying For A Real Trend To Actively Invest

July 13, 2008

It was a down week for stocks and even though I gave the market only a side glimpse as I watched the overall stocks within the market–I know the trend is already sideways to down, it was quite clear that the few really nice charts that were left are starting to die like they have done so well of doing this year and that (something that could become more bullish later on) many of the big-cap oil, steel, metal, and chemical stocks all showed signs of possibly topping. Even if they have not topped, the fact is many of these have been running since 2001, 2002, and 2003. So if you are thinking of buying a new breakout, try to look at a longer-term weekly arithmetic chart before you go long that shorter-term intraday 60-minute logarithmic chart breakout. A little history and perspective will save you a fortune in learning cost, in the long-run.

Truth be told if some of you are finding this market frustrating it is because you refuse to STOP LISTENING to the talking douche-bags on CNBC. These fools make it so that you are constantly confused. If you just put your trust in someone who has a long term track record of beating the market (I DON’T CARE WHO IT IS AS LONG AS IT IS NOT a yelling madman on CNBC) over the long-term markets of the 80s, 90s, and 00s. A lot of people did well in the eighties and nineties but are now doing HORRIBLE in the double-zero’s. These people should not be listened to unless they have told you to either stop trading or to have reduced your holdings considerably recently. If they have not and are telling you to load up on stocks, I am not sure I can say that you should be listening to that person.

While I believe in buying panic, I don’t think we have real panic out there in price and volume and that can clearly be seen by a VIX around 25. If the VIX was at 40 and I saw a put/call around 1.6, I could say maybe buying stocks for those that do when blood is on the street could. But for now I don’t see that panic to buy stocks. I do think people’s exaggerations about how bad things are is overdone but the quality of the longs and the supply/demand patterns that show up in top quality longs before a bull market simply is not there.

The only thing that is there seems to me is a lot of frustration. Listen the market recently tried to setup and give us some longs to play with but that did not happen. That just confirms we are more range bound. However, when I casually read or hear anything about the market in the media it sounds like the worst is happening. I can’t wait till the market actually crashes and the VIX with the market can confirm what these jokesters are saying. I mean I am sure there are some of you, right now, that know where the futures are. LOL. Dude, if you are trading using my methodology you don’t need to know the futures. Freaking loosen up that tie bro. Luckily, for me, everyday I invest in surf-shorts. So when the next bull market of the 90’s that made so many “geniuses” comes again and I take control of the market and produce the huge winners that 1999 and 2003 produced left and right then I can be truly vindicated ON A REALTIME level that watching the market too hard is stupid. Especially in a downtrending to choppy market. It is so stupid to psychoanalyze this market I do not know where to even start.

I mean sheesh in 2003, we already had 450 stocks up 100%. This year we have ONLY 65 right now. I am not sure why or how some of you do not understand why it is so hard to pick the winners this year. This simple statistic clearly tells me why it is so hard now. The fact is is that I found all 450 back then and found your 65 right now. Nothing gets by my simple scans. No stock can make a huge run and get by me. NOTHING.

Besides there also only being 65 stocks up 100% this year, there are only 20 that are up 200% since the start of the year. In 2003, BEFORE THE BULL MARKET WAS CLOSE TO BEING FINISHED IN JANUARY 2004, there were already 164 stocks up over 200%. That is almost three times more than are up 100% this year. So the reason “why I have not found TASR this year” is because there is no TASR this year. When the next TASR sets up in the pattern that you see in my ‘Past Big Winners’ and not only shows me that beautiful chart pattern but shows me those EPS/sales growth again, I will, once again, be very long the next TASR.

What is so hard to figure out about this and why do some people not understand that a raging bull market is basically EASY for me to make money in (over 80% accuracy in 99 and 03) compared to non-raging years. The fact that I continuously beat the market even in tough time proves that this methodology is still superior to the “sky is falling” crowd we hear on TV every day now. And to be honest that is all I ever hear. No matter what time of the day it is, no matter where I go, or no matter who I have not talked to in Maui or seen in weeks to years, they all ask the same question. “When is this market going to crash?” If they don’t ask that they ask an even more weirder question and ask me “when is the recession going to be over and when will stocks rise again?”

Now I know it has not been a great year at all but the fact that I have produced some winners, have a small victory in my accounts so far this year (even though my gf and friends speculative accounts are in fact down 3 and 1% this year compared to the Nassy being down 16%) with a 10% gain, this has still been a pathetic year.

I am encouraged by the fact that I see everyone everywhere recommending to buy oil stocks. Along with some “soothsayers” that I have been following for over ten-years that are now treated like gods. Some have heard some recent buy recommendation from big oil stock promoters not realizing that weekly arithmetic charts going back to 2001 clearly show that you are not only late to the party but you are anywhere from 100% to 5000% late on some of these. Remember, people, you first want the market to be in an uptrend before you go buying. Second, you have to realize that if you are a fund manager if you have been long a stock for a while and you have a big gain and you want to dump it you need the most “dumb money” you can find out there. CNBC fits that role perfectly. Watch that in this market, if you watch CNBC. If you don’t watch CNBC, congratulations!!! You can actually think for yourself, you probably use charts somehow to help you invest in the stock market, and I guarantee you have a better return than those that do. That is my final plee to stop watching “the sky is falling crowd.”

They are finally IN LOVE WITH OIL stocks and so if those fall, along with chemicals and metals, which are also becoming media darlings, maybe we can have a real bull. All I know is that before we are going to have winners that actually look like 1999 and 2003 charts that work, we are going to have to flush the excess in the commodities market. I believe that is starting. But I have believed in a commodity flush before and was proven wrong. However, I am persistent and this time all the charts are moving around wildly on HUGE volume (this is known as churning in my line of work) and the fact I am already short some large-caps in this environment shows that something must be wrong. I don’t get short stocks unless they are setting up in HISTORICALLY HIGH ODD patterns. I have read the book and studied the charts OVER-and-OVER, from WON’s “How to Make Money Selling Stocks Short.” I am starting to see some of these patterns and that with a lack of my “HOT HOT HOT HOT HOT” max green BOP charts in either CANSLIM or totally speculative but hot industries is a sign to stay in cash and FOR ME TO start to get short.

For most, shorting is not a game to try to even to do. But for those experienced, if these beloved big-cap oil, chemical, and all other type of commodities continue to breakdown on heavy volume. You know what to do on the low volume rallies.

on the sentiment front, while the VIX may suck around the 25 (27.49 to be exact-I know my numbers; we just don’t have to be exact in this realm of conversation) area but the fact that bulls dropped to 27% and bears rose to 47% this week, from last week’s already falling numbers, is another good thing for us “waiting to be bulls.” That with the extremely high 14 NYSE short-interest ratio sure is going to be fun if the VIX can give us some real fear in the market. Then charts like DGLY will make you rich like PDO did and charts like AEHR and ACM can at least act like DGLY did. For now, I’ll take what I can get. And that isn’t much.

At least the Mets are winning again!!!!! They are winning a lot and their streak is hot!!!! Nine-in-a-row baby!!!! Mike Pelfrey. Great time for an all-star break. Not!

Aloha from Maui, where the Mets are over 6,000 miles away yet are still right in my heart where they will forever be; corny but true. Go Mets Go! and please, God, soon, go market go! Just give me some CANSLIM or “Hot” charts.

Stocks Look To Be Starting Another Trend Down. Well They Already Have But Now It Looks Like It Could Get Worse; I Hope I Am Wrong But I Would Rather

July 7, 2008

If this is the case, as you can see, I KNOW there is only one smart thing to do and that is to raise cash. That is what I have recently been doing.

In early 2007 my account when through some volatile stages and is doing the same thing now. With my gf account down almost 3% and my accounts up only 10% YTD after SO MUCH HARD work it is obvious to me the stock market bull market since 2003 is near over. I said this in November and made money as stock came down but so many believed the real bottom was in on March that I guess we all put out “we have topped thesis on hold.” Well it looks to be back on after so many stocks have failed what was starting to look like nice long patterns. The most disturbing failures range from BRKR, BKE, AEHR, ACM, DGLY, along with a few more this year and other stocks like INXI, BLL, ESEA, FALC, and a few others last year. This is my clue that the commodity bull market from 2001, that has most people thinking our dollar will be worthless and gas will be a t $10 very soon, is running into a top in the near future and most of those stocks are nearing tops with their current chart patterns.

Look at weekly charts of the Big Oils, The little oils, the chemical-fertz, the chemicals, or another other commodity related stock some of you are asking me if we should be buying. LOL. Well, maybe if we were reading IBD together back in 2000, when the market was rotating into these commodity stocks. Some of you want to buy TNH, MOS, POT, and the other fert stocks after 5000% perfect CLIMAX PARABOLIC runs that have now seen some of the stocks make some “interesting” splits to get the publics money into these stocks. Do some of you NOT ever look at a WEEKLY chart going back to 2000 on an arithmetic scale before thinking of buying some of these names like PBR, SCHN, MT, or CVX. While they are not at JDSU, QCOM, SDLI and the extreme nature of internet stocks. Seriously!, the noise on CNBC and the radio about commodity, oil, and precious metals are still near topping pitch.

Now if you are still long TNH and MOS, like I was for a 300% and 400% gain, from 2006-2007 by all means continue to hold. But if you are thinking of buying now you really need to get into a habit of looking at arithmetic weekly charts that go back at least five years. That way you can make sure you are not buying a stock that it already up 3000% to 5000% that is splitting on you to make the stock seems attractive but yet it is the smart money finding the dumb money to sell into it. So watch for that.

Also I am currently long still one stock that is of size. I do still have some oil, chemical, gold, steel, and other energy related longs in uptrends that I am holding. But a lot of our new hot charts like DGLY (which we will count as it did give us a 50% gain) and worse off AEHR are just picking up where BKE and BRKR or this year and ESEA INXI BYI BLL and FALC ended of last year. Those pefect patterns used to never fail but in a bullish uptrend those HOT patterns are nearly 80% to 100% automatic. I know I hark on these failures a lot but you must remember from 1996 to 2006 (with over 50 of my best and still around 20 from the 2004-2008 period that still needs to be posted including about 10 from 1999 that were SO HOT but I can’t get you a tcnet chart anymore) whenever a super hot pattern showed up in an uptrend ESPECIALLY but still even in a downtrend they were OK to get long.

But maybe proving the thesis that what 2003 was just a bear market rally and But maybe proving the thesis that what 2003 was just a bear market rally and that the real kind of 1980s and 1990s kind of rallies are a ways off. Whatever it is I am ready for it. Subscibers see this be watching me sell off the losers, stop going long poorly quality stocks But maybe proving the thesis that what 2003 was just a bear market rally and But maybe proving the thesis that what 2003 was just a bear market rally and that the real kind of 1980s and 1990s kind of rallies are a ways off. Whatever it is I am ready for it. Subscribers see this be watching me sell off the losers, stop going long poorly quality stocks, going long only a little bit of the few great CANSLIM stocks that are left, and watch me raise cash as the market clearly weakens.

It started to look like some stocks wanted to come alive and make some money. One clearly did. We were very long PDO and I have sold it all off after it announces a split into the run up. It is very quite posible it is going higher but I had a very nice size position and took in a 370% gain from 5/9 to 6/24 with a VERY LARGE position from June 5th to June 24th giving me a 110% return that helped take an account only up 3% back up to up 20%. Since the ACM falloff from Friday along with the other 27 CANSLIM quality stocks that still make up a much larger % of my ports from my 22 short positions, I am now back up to only a 10% gain. But heck guys at least I am being honest and telling you this is the hardest i have ever seen it.

I have friends here on Maui that have seen me go day-by-day through a LMLP MRVC example in 1999, have seen me go through CRUS of 2000, GNSS of 2002, ALL OF MY 2003 (including FMDAY, TASR, EGHT, TRAD), IST in 2004, and HRZ of 2006 and THEY ALL CLEARLY see how easy it was. They all also understand it was because it was still a more fresh environment.

As many of you can see now, with AFSI TESO APPY RICK and OMNI being the truly beauties that were easy to spot and say “yes, definitely, go with those to make money. However, it was weak and this year the peformance of PDO was great but the only other one that has worked has been DGLY. I don’t know how to say it any other way but it is time to raise cash.

Another reason for raising cash is clear to me because the investors intelligence shows something like 45% bears to 31% bulls. This is a major contrarian signal but you need the CANSLIM stocks to start moving higher first. For now that is not happening and with the put/call also showing a bit of fear with a 1.01 reading. However, the most important thing telling us if there is real fear int he market o make money for those brave enough to go long is telling us that more pain is in store: the VIX at 24.80 is no where near a fear level of 40 or better yet 50 that can set us up with those AEHR, DGLY, and 2007 stocks that failed. Soon things will be back to normal but for now protecting your capital for those times when my PAST BIG WINNERS are ready to really work for me again is what I will be doing.

Some of us will be able to benefit going short but if you are a newbie and do not have a track record of making big gains in big bull markets and beating the market in other periods, I would give yourself time to learn how to do this the right way. Don’t start shorting the market until you first learn how to make money on the long side. That is my final advice for the night. I am going to bed and I hope that you all have a GREAT Fourth of July!!!