Stock Market Indexes Start The Week Off With A Low Volume Selloff; All Indexes Are Holding Thursday's Lows

Stocks did what they have been doing for the entire past thirteen months and that was finishing with a lower close. This weak close was made worse in that it was yet another volatile late day move. This time it was a rollover to the downside with the indexes finishing right near their lows-of-the-day.

This very weak close was very nasty to see but some consolation can be taken with the low volume that came with the selling. That lower volume was the second straight day of a lower volume pullback that has come since the reset of the rally attempt on Thursday.

On Thursday the market dipped to new lows on a few indexes that reset the previous rally attempt. However, by the close, the market reversed to a very bullish close on much higher volume. That put market players who have been watching this selling for thirteen months now in a better mood.

The pullback the past two days have made some pretty upset that the market can't hold onto the gains. However, these people refuse to look close enough to even understand that it is on lower volume and that there is a chance that we could rally and move higher for God knows how long.

The only problem with moving higher here is that I am without ANY leadership. There has not been one pullback or bear market that I have been in where there isn't at least one sector with more than 1 or 2 stocks moving up. Right now I have two medical stocks up over 30% since I went long but there should be more showing up with better chart patterns if this was a true bear market leader. The fact none of the brother or cousin stocks are showing up for possible breakouts is a bit worrisome.

I do have a new long tonight but there are two major problems with this long. First off it is below $5 a share. There is not one single stock out there that is a leader that is priced under $5. Now in a new and fresh bull market you can find a lot of stocks turning around their EPS, sales, and stock via a really bad bear market (like some of my best longs in 2002 and 2003). The only problem is that if this is not going to turn into an uptrending market, it might fall hard. The last problem is the fundamentals. I think all I need to tell you is that the EPS rating is a horrible 5. If that doesn't tell you how bad the numbers are nothing will.

But I will play any near-perfect setup for some lunch money, in case this market turns. If it doesn't, well then, I will make a good amount of money. I am still short 34 stocks and 33 out of 34 show a profit. The only one that does not was my most recent short and it still has not given a full cover signal. So there is still time for it to fail and work out in the long term. Even if it doesn't work, shorts like CEO 40% OKE 39% SDA 73% AMX 44% LLL 27% POT 57% APD 44% SPW 69% MOS 63% AAPL 45% GGB 62% ARB 48% CPRT 25% SBAC 53% IPHS 30% SPG 40% and CETV 85% more than make up for it.

This market is still in a primary downtrend and it doesn't look like anything wants to move up just yet so until it does keep that powder dry and your cash level very high.

By the way, I submitted a Worden Report on how to "survive a/this bear market" and I really hope he publishes it. I do make one reference to a few of my subscribers being up 60% to 80% and that might prevent it from publishing. But if he does publish it, look for it sometime this week or next week, as he did receive a lot he said. If he does not publish it, I will not be sad, instead I will publish it here. :)

Have a great day/afternoon/evening/night and I will see you tomorrow in the chat room. Like always and almost all day long like usual.

Gold and Platinum subscribers can watch full size versions of part one and part two in the Gold forums. Free part one youtube version below:

A Potential Relief Bounce Gives Way To A Very Ugly Close; At Least Volume Was Lower Than Yesterday

I know it is not much of a consolation for those who were wanting more than one up day but at least we can say volume was lower on today's selloff. Still that doesn't mask the pain that some people (not my subscribers) are suffering as the market retreats to a near 50% decline on all the major market indexes. Those that are forced to be long in either retirement plans or via the direction of their stockBROKErs are hurting badly in this market and today did nothing to make them feel better.

The only thing that I can say about today is that it was not necessarily completely unexpected. While the rally yesterday was a beautiful way to start a rally attempt it was still only day one and like I said yesterday one day does not a new rally make. The fact is we have to see another up day then on the fourth to seventh (or even the tenth) day of the rally attempt we have to see a day where the indexes are higher by a very strong amount and do so on volume much higher than the day before.

Some people get excited over any and all follow-through day attempts. But when you come from a selloff on heavy volume, then have an up day of only 1%, and volume is only slightly higher than the day before, the chances are high that the follow-through day will fail. So you have to remember that this is a science and an art. I have learned how to correctly identify good rallies and bad by being involved in the stock market for almost fourteen years. The recent action yesterday was bullish but today was disappointing but not a final nail in the coffin.

What it was was a nasty pullback but not a deadly pullback. The trend all year long has been down and once again today was an extremely profitable day for my shorts (33 shorts and 32 produced gains! and this comes after the 32 for 32 winners on Wednesday) so you think I would be very happy that today was such a nice down day. That is the case for me monetarily but overall I am getting a little glum looking at all the red.

The worst part is that there is not a single one of my shorts that is giving me a full cover signal. Even after yesterday's rally attempt, there was a huge clue that the market was not going to blast off immediately. That clue was found in my personal shorts. Since almost all of them show decent to large gains, most of them are in a position where they are down enough that if a new rally were to start some obvious reversal patterns would emerge with huge price reversals, strong volume, and BOP going positive or green or even max green. when I see this I know it is time to leave my shorts. Yesterday, I did not see this and thus only covered a partial amount of my shorts and not covering the full amount of any of them. This payed off nicely today helping put my account at new YTD highs with a 31% gain.

I will admit that I am very disappointed with my gains because as you can see via my individual shorts I should be up over 100% this year had I used full margin. Here are the individual returns of my shorts after today. Included in the list is one long that was up today. ANCI 49% (SDA 72% SPW 71% SPG 35% GGB 60% ARB 46% RIMM 59% CPRT 20% TITN 50% RDK 15% MOS 62% PLCE 18% OKE 38% AMX 44% AZO 14% AAPL 44% CETV 80% ATHR 50% CEO 40% CYT 57% POT 56% CAJ 32% CEDC 56% APD 43% IPHS 23% LLL 26% SBAC 51%).

As you can see I have done very well this year shorting the market. If I would have used puts, I would have done even better. So why am I not up over 100% this year? Because the most short I have been in my accounts is 20%. I have not gone over 20% short because I was waiting for a "perfect" short setup like I saw in 2000, 2001, and 2002. So far I have not seen a "perfect" setup and thus have not taken a huge short position yet. They have all been moderate to small. This has cost me a lot of potential profits and I should easily be up over 100% this year.

Even though I am disappointed in myself, there are three subscribers that are up over 60% this year, that I know of. Wutan, Author Ego, and Axman are all up over 60% with a couple of them up 80%. This is due to them using a lot more of their account when they went short either the stock picks I made or the stock picks they made. Rather it was my pick or their pick, the bottom line is that they did everything right. They traded with confidence and kept their cut losses. I, on the other hand, decided that cash was the best bet as a bull would be here sooner than later. Now I am kicking myself for not being 200% to 400% short since the January to April rally fizzled. Live and learn, yes. Live and learn. Chances are very high that I will never be this cautious again. Especially in the next bull market. I will be very aggressive just like I was the last bull market.

Right now the market is still in a very deep down trend and until that trend changes there will be not a lot to do on the long side. I still think it is VERY IMPORTANT to keep your watchlist up to date with the top CANSLIM quality stocks just in case you get a great setup. Even in this market I still had a new long on Thursday. While it was not CANSLIM quality it was still a nice selection and with a good lower open today the stock stayed in a tight range with BOP slightly increasing. That is all I can ask for on such a nasty down day. Have a great weekend!

I have made two videos for Monday. The first one is 10 minutes and the second one is 16 minutes. Both are full of very important information that you need to know for this market. Gold and Platinum Members can view these full size version in the Gold Forums right now. The Free YouTube version of part one for Free and Silver members is available here:

A Very Bullish Intraday Reversal On Very Strong Volume Hints To A Possible Start Of A New Rally Or A Bear Market Bounce; Either Way Bulls Will Take It

There is no doubt that today was nothing but very special. I must admit when we were down over 4% on all the indexes, it looked very bearish and I have to admit it was a little depressing. Even though I never give up on the market, I have been watching this market almost from the start of the day to the end of the day every day since the election. And to be honest, the selling, even though it was profitable by far, was getting old. I needed a small break and decided to catch up on some sleep.

When I woke up about 1 1/2 hours later there was still 45 minutes left in the session and I was an extremely happy person to see that the red that has been such a part of this market all year long was finally green in a significant way. Not only was it green but I watched as it steadily rose higher and higher until finally the bell rang. When that bell rang it was obvious in my chat room, despite the gains everyone has made in this bear, everyone was very happy that we could put in such a huge reversal with the indexes going from down 4%+ to up 6%+. The Russell 2000 even staged a very impressive 8.49% gain.

The other great news about this rally was that for the first time since the January to March attempt of a rally I had more than just 10 stocks in my main long scan. In fact I had 29 which was the highest amount by far since the downtrend was started in earnest. That is when I began shorting and continued shorting. However, right now, I am more than happy to stop, raise more cash, and wait for a possible move higher.

The one thing that should be taken into consideration is that out of my 33 shorts all 33 are still below their 50 day moving averages. Since almost all of these show me gains, and since I run a very disciplined portfolio, I can not cover the full positions. However, if the stock had a reversal, the volume was large, and you can see BOP going green, you can be sure that I covered quite a lot and am happy with the profits I can use to either go long or short anything that shows up in my scans in the future.

I also think it is very important to remind everyone that today is ONLY day one of a new rally attempt. On the DJIA the indexes price action has managed to remain above recent support. But on every other index (SP 600, Nasdaq, Nasdaq 100, SP 500) the price was able to hit new 52-week lows today before staging one beautiful reversal.

Remember that no one day does a new bull market make. We must wait for confirmation via a follow-through day and we must not see the index produce any more distribution days. If the indexes give off a heavier volume selloff tomorrow then the bullish action today would be less meaningful. However a few days of low volume pullbacks followed by heavier volume accumulation would put the market in an uptrend.

Just remember not all follow-through days lead to a new bull market but no bull market has EVER started without a follow-through day. In other words don't believe every on will work. Instead look at the volume and price move on the indexes. And most importantly look around to see if the leading stocks are coming from the top quartile of the industry groups or the bottom. If it is the bottom, chances are it is just a bounce that will fail in the future. If it is the creme of the crop, then all engines are usually a go.

One index that I monitor that is in a follow-through day and has since had three days of strong accumulation and price action is China (SSEC-X on Telechart). The Shanghai index had a 3.7% rally last night and had very heavy volume to come with it (look in the Gold Forums for the chart; posted by MarketSpeculator). This price and volume action since the previous lows that also had accumulation looks very good with the low volume that preceded the recent price and volume action.

The thing to remember though is that we are coming from a very nasty downtrend with the Chinese stock market down at one point 72% and the Nasdaq down at one point 50% year-to-date. These kind of losses in just a year's time has made a lot of chart patterns very ugly and it is going to take more than just one move higher on strong volume. The accumulation we see in China must move the market higher and lead to another lower volume pullback that holds the lows. This must be followed by another follow-through day. If this happens I am very confident that we can come out of this sooner than later.

However, if that does not happen and the United States stock market does not basically do a repeat of what it did in 2002 to 2003 as it build upon higher highs before becoming a clear new bull market in March 2003 it is probably going to be bounce that is followed by stocks hitting past resistance levels and failing.

If that is what is going to happen, I will be more than happy to take a few longs on the way up if I can while the trend is up and then reverse my longs into shorts when that resistance and failure comes into play. The best thing that could happen is that I have to cover the rest of my remaining shorts and start to rebuild my IBD watchlist because calm price action, heavy volume, and green BOP charts start showing up in my scans. I sure miss those but I know they will come back. Heck we even have one now that has made us some money as we have taken some profits and still hold some as the trend is up. If you don't know QCOR, then you aren't following the market close enough.

I am going to wrap it up here and welcome you to watch the video so you can visually see the market and its price and volume action. Gold and Platinum members can go to the Gold Forums now and watch Part One and Part Two in a full size version.



Have a great day/afternoon/evening/night. :)

Another Day, Another Selloff; Higher Volume On The Selloff Indicates Fear Is Rising

It was yet another day of huge losses for the stock market as most indexes are now down over 45% for the year. This kind of market action is enough to make a lot of people sick. But the last thing you want to do here is give up by getting sick of the market, especially with the selloff starting to slightly hit panic levels.

Now, I am not saying that we are near a bottom what-so-ever. But what I am saying is that we are getting a little crazy with the selling and that should lead to a rally in the near term. However, before that rally occurs, I expect that we will more than likely set new lows on all the indexes.

One of the reasons I believe that is possible is because after today's session I saw that ZERO stocks on the NYSE or Nasdaq hit new 52-week highs, while over 415 stocks on each index hit new 52-week lows. This number of new lows expanding along with the non-numbers in the new highs is my warning that the market is not done with the selloff, even though it has been going on for a long time.

I will know when it is time to go long again as my scans will start to produce some stocks building nice bases with excellent accumulation patterns. Right now, sadly, scans that usually have 50-300 stocks in it during bull markets only have 5-10 in it now. This is not only some of the lowest numbers I have EVER seen in my long scan but I am in a unique position myself with my own longs.

I am currently long only two stocks right now, after having to cut my loss on DMND. With me only having two stocks this now officially makes it the LOWEST number of longs I have ever held at one time SINCE I STARTED IN 1996. When I started I bought somewhere around 3 stocks and ever since then I have built upon longs since I learned to buy new highs right when I started off. I have always been a breakout buyer and I was blessed to have started in 1996. Not perfect timing as IOM had its huge 5,000% gain in 1995 but still early enough to have been lucky and come out on top. It took me three years to learn how to sell correctly and if you can do simple math you will know that in 1999 I had my sell discipline down.

With that in mind it was no problem taking longs off as the market sold off in 2000. However, there were still a few stocks that either held up or that showed up as longs (like CRUS and GNSS, for example) during the two year bear market. This allowed me to almost always have AT LEAST 5 longs. At the start of the March 2003 rally I had around 20-30 stocks and by the end of the year had over 65. All of them were great longs. But since the market continued to move up with no real pullback over the next five years by the time 2007 came I was long 200 stocks which mainly consisted of a TON of 10% remaining holdings as they would never break the 200 day moving average (where the last stop always goes) and a few stocks that would make up 2% to 10% of my portfolio (like GIGM, HRZ, AFSI, etc..).

We are a long way from those bullish days of 2003 and the end of those bullish days in 2007. Now we are in a year long-plus bear market and a lot of people have suffered quite a bit. I too am no stranger to the suffering as I have one account down 7.4% and another down 1.8%. The good news is that both of those accounts are small and only have $10,000 in each. The good news is that my main account with six figures is up almost 30% this year. This was helped a TON today as I was only up 25% before the closing bell. After the closing bell, when I went to check my accounts I was very happy to see that I was 31 for 31 in my shorts today while 0 for 3 in my small longs. The shorts are bigger than the longs and the money made compared to the small losses helped my account grow almost 5% today while the market lost 4%. Quite a great day and more proof that by not using your opinions and instead using the charts and trends, you can make a lot of money.

There is still a lot of fear in this market as the VIX is over 60 and the put/call ratio is hitting 1.2. The bad news is that I still do not see capitulation via volume on the indexes with these readings. Since we have already seen a 1.7 put/call in March and a 89 VIX last month, it is safe to say we have had some huge fear in the market. The sad part is that this is the first time that much fear has been around yet no bottom has been put into place yet. This can also be confirmed by looking at the investors intelligence survey.

That survey shows bulls rising to 31% from 21% and bears falling to 46% from 54%. Somehow despite falling over 10% on the indexes the past week, professional newsletter writers have increased their bullishness and weakened their bearish posture. This to me is a classic sign that we are not right for a bottom. The bulls should be dropping to 10% and the bears rising to 70%, with the put/call around 2.0, and the VIX hitting 100, if I am to believe in any bottom without volume.

As long as we are selling off on lower volume, trending below the 50 day moving average, with the 200 day moving average over the 50 day moving average, there is no reason to go long this market. I mean when 197 out of 197 industry groups fall and 31 out of my 31 shorts rise, you can bet this market is not one to get long.

Stay short or HEAVILY in cash and remember this bear market will pass. It might last longer than others but that is OK. Have you seen my returns on shorts that I have taken since March? Have you seen my short returns from November to January on my free blog? Have you seen all of my Past Big Winners from 1999-2008? If you answer no to any of these questions and you are down more than 10% this year, I suggest you take some time to go over all my Past Big Winners and other free sections of this site. And honestly if you want to make money, I dare you to find anyone else producing as many stock winning ideas as I am producing right now.

I do all of this for you. I do not do this for me. If that was the case I would trade out of my own accounts and NEVER show you the same charts I look at to grab my edge. I would never disclose that info. However, I have learned helping others is 1000x more important and meaningful than making a lot of money all alone. Mentoring young guys and helping people survive these tough times is what it is all about. I love everyone reading this and want to remind everyone to keep your heads up and if you are not a subscriber making money with us on our short, you might want to consider it. Only because I know so many people losing money and you can ask any member of the Platinum or Gold levels we are making good money.

My only regret this year is that I did not believe in my own short convictions and instead of using full margin on these shorts I instead only got up to 20% short and now hold about 9% short thanks to the recent shorts that are doing very well. There is another 1% in ANCI and QCOR and that leaves 90% just waiting for either a new round of shorts or God willing another big bull market that will produce huge gains thanks to the high VIX.

Great luck everyone, keep smiling, cut those losses fast, do not go long "bargains," and take profits in your shorts as they have big selloffs daily. The bigger the move, remember, the more you want to take. If you look below you can look at the returns of almost all of my shorts since March. I have failed very few times this year in my selection of shorts. Yet at the same time I feel I failed by not going fully margined on my short picks. I guess it beats a 45% loss in the market, or a 40% loss by following Jim Cramer's Action Alert portfolio, or even holding one of the best growth mutual funds with a 20%+ loss.

Have a great day/afternoon/evening/night everyone! :) Gold and Platinum members can watch the full size version of part one and part two of my nightly videos in the Gold Forums. Free youtube video:



top shorts and their total returns: POT 56% CEDC 55% SDA 72% SBAC 55% CPRT 17% CEO 43% AAPL 44% APD 44% RDK 16% GGB 61% CYT 57% ATHR 46% SPG 38% MOS 65% PLCE 21% CAJ 32% AMX 46% ARB 44% RIMM 57% OKE 40% SPW 70% IPHS 26% TITN 53% CETV 79%

Nasty Open Receives A Bullish Bounce But By The Close We Fizzled Out On Higher Volume

Well there is no doubt about it. This is one ugly market with not much working to the long side. That means that unless you are holding heavy amounts of cash, inverse ETF's, or a heavy amount of shorts, chances are you are having a very rough time going about the market right now.

I hope that everyone that is reading this is listening to me when I say that cash is the right place to be. If you are not listening to me and are instead trying to bottom fish like so many of the horrible market talking heads on CNBC and other financial websites are telling you to do, then you are probably having a very rough time trying to make headways in the market.

If you look at the end of the commentary, you can see that I have done very well on the short side this year, after several years of operating on the bull side. This should convince everyone by now that I know how to make money in every market condition. If you are still not convinced, well then, there is nothing else I can do. I have my past big winners for my longs and have shown you the gains in my shorts from November to January and March to now. If you have followed me into my shorts, you have done very well. If you have done the opposite of me, you have not done well.

Speaking of not doing well, do you know that DRYS is down 92% this year. Do you know that I had three people attack me at the beginning of the year that DRYS was going higher. They were mad that I only took a 100% gain on the stock and then sold it and said it topped. They yelled and screamed at me and called me names. Funny thing is...they were all very wrong and I was right. And that is what it is all about. Your opinions don't matter unless you make money. I didn't care about DRYS the company. I only cared about DRYS the stock. The stock told me it topped and was heading lower. Those who did not listen bought it at the top and now hold a 92% loss.

The bottom line is that in this market it does not pay to be a hero if you do not know what you are doing. I would like to think that even though I have been online since only 2005 in my blog form and 1999 in chat rooms that I still would deserve some respect due to my very strong stock picking abilities. It is one of the few things that I do very well in life. The fact that so many could say to buy the market when I have been saying to sell the market all year is mind boggling.

What makes it more stunning is that those that want to buy the market have a lot of money and have a lot of ignorance. To think that a market that is showing no leadership should be bought is crazy. Do not listen to these constant bottom-callers. They have been wrong all year and that is why Cramer's Action Alert portfolio is down 38% this year while my worst account is down 7% this year. I cut my losses and do not bottom fish. Cramer neither cuts his losses and he bottom fishes. Folks, if you are listening to him, in this market, you will suffer a lot of damage. Please do not buy stocks in this market environment.

When should you buy stocks? That is easy. Keep it simple my friends. All you have to do is wait for some strong clear accumulation days to show up in the general stock market, you need to see the indexes price get above the 50 and 200 day moving averages, and we must see leading sectors with leading stocks breaking out to new highs.

Right now, we do not have that. We have zero leadership and when we do have bullish sessions the past month the top 10 industry groups constantly come from the bottom 20% of the 197 industry groups. This shows that we are not in a bull market and are instead in a primary bear market that has oversold conditions that lead to relief rallies. Until these relief rallies become real rallies on strong volume with leading stocks moving, caution must be advised.

The only good news I have is that the news out there is horrible. News flow is extremely negative and a lot of my members show sign of fatigue. While this is normal I must remind everyone that giving up now and walking away from the market is the worst mistake you can make. You must not give up in bear markets and must do your best to make a little money or SAVE ALL OF IT so that you can have a TON of ammo to use in the next bull market.

No matter what the next round of leaders are, with a VIX over 60 and once near 90, you can believe that when stocks get moving again the leading stocks with the best charts will rack up some huge gains. If some of you still do not believe in charts, you might want to check my Past Big Winners to your personal portfolio. I have a feeling value investors are NOT doing nearly as well as CANSLIM investors right now. Value investors are buying these sharp falling knifes. CANSLIM investors are waiting for the perfect moment to get very long on full margin to get wealthy. For now, CANSLIM investors know that cash is king and if you are experienced that going short is the name of the game.

Great luck everyone, make sure you check out the returns on my shorts and my two longs QCOR and ANCI and remember even though I am making a little money now, WHILE SOME LOSE IT ALL, I will make even more when the bear turns into a bull. All fresh bull markets like 1999 and 2003 are very good for me. Even if the next bull is in 2012 you can be sure 300% to 2000% winners will be in my portfolio. I would love to see them in yours also. So don't give up. Live a life like Jimmy V!!! Never give up. Never give up!

Have a great night/day/afternoon/evening from Maui. Aloha!

Free Youtube Video:



Part one and part two full version available for Gold and Platinum members in the Gold Forums.

top personal longs/(shorts) and total return: QCOR 34% (CEO 40% RIMM 53% AAPL 41% OKE 35% POT 50% SDA 67% CAJ 29% PLCE 20% IPHS 15% CEDC 48% CYT 52% AMX 44% CETV 76% ARB 41% SPG 30% APD 41% ATHR 40% SBAC 47% SPW 67% CPRT 16% MOS 60%)

Selloff On Low Volume Keeps The Bears In The Drivers Seat

Today was another day of a low volume session where the markets open up higher and subsequently selloff all day long. By the end of the day everything was closing near the lows on low volume. The only good news to the session came at the end when a slight bounce helped take the indexes off the lows.

This market might be taxing to a lot of people right now but I have to remind everyone that you can not give up in this market. If you give up in this market environment you can be sure that when the right moment comes and the market turns you will not be there to reap the rewards that the market gives.

Just think back to 2000-2002. I remember after 9/11 when everyone was for sure that rally was the start of a new bull. Heck even I thought it might be. But as the rally went on there were not more and more "hot" stock charts setting up and breaking out. That was the warning that the rally might fail. However, so many people were for sure that was the bottom that soon they were fully invested and after January 2002 were soon losing the money they just put in.

That rollover caused a lot of people to give up and they ended up leaving during the last year of the bear market. What happened after the summer was that heavily accumulated stocks with nice bases started to show up. Some of those included GRMN, UNTD, SSYS, USNA, NTES, SINA, and SOHU. When these green BOP filled, heavily accumulated, low volume pullback stocks started showing up a lot of people were already gone and out of the market. So they missed out on a lot of big gainers from anywhere from 100% to 500% to 2000%.

Then after the initial burst, a pullback on lower volume entered in 2003 and everyone was for sure this was going to be the start of the next leg down. However, more and more stock charts started setting up in proper bases with excellent price and volume action. Soon March of 2003 was here and we were having a powerful follow-through that helped make 2003 one of the best years in my investing life. I know why that rally happened. It is called tax cuts and unless we get a round of tax cuts in this market there will not be another 2003 for a little while.

However, even without a very huge bull market, there will still be stocks for me to go long and make money. Just take the time to review my Past Big Winners in bull and bear markets. You will see I always had some stock making strong gains like QCOR and ANCI now with a 33% and 83% gain respectively, in under a year. Those gains along with all the gains you see in my shorts (look at yesterday's commentary to see the recent returns) are a promise that I will always be able to make money in the stock market no matter how ugly it gets.

This is one of the ugliest markets I have ever seen and is the EXACT opposite of 2003. Hopefully soon we will get some medical stocks to build on their bases (I go over a few in the video tonight) and then we can get a little bullish again. However, for right now, even with the low volume, the trend is down and that means we must operate from the bear side or the cash side.

Cash is still king and there is not one person that should be upset that they missed some great shorts and were in cash. Don't forget earlier this year TONS OF PEOPLE attacked me telling YOU to buy stocks. They were ALL wrong. The bank bulls, the dry bulk shipping bulls, the oil bulls, the gold bulls, and the mining bulls. They all told me I did not know what I was talking about and they were ALL proven wrong. Especially the most insane crazy of those people that went after me. God rest their souls. They need it.

As for me, I will make sure that when the time comes to get long, I will make sure I let you know that way you can become wealthy in the next bull market. There will be another bull market. We survived the 30s and 70s and we will survive the Obama spending and taxing nightmare that will probably infect our markets. I pray that I am wrong and I would love to be wrong but socialism NEVER helps a stock market.

Part One and Part Two of the new videos is available in full size for Gold and Platinum members.

It Will Not Be A Bear Market Forever But Right Now It Is And That Means Caution

Friday saw the indexes produce some nice gains that were still puny in comparison to the two-day carnage that led to the bounce. The other bad news concerning the bounce is that volume was much smaller than the previous two days. That indicates that big mutual funds are not interested in accumulating stocks at these levels. And if I were a smart man I would want to do what they are doing and if they are not accumulating stocks then I do not want to be buying stocks at these levels.

Even though I still hear some horrible bottom-fishing advice I must warn you with 100% caution on playing that game. Bottom fishing stocks when there are absolutely no leading sectors with a market mired in a vicious downtrend below both the 50 and 200 day moving averages is suicide. The best bet is to stay on the side and in cash, unless you have the wherewithal to short stocks. There are still a lot of stocks that are around their 52-week highs and eventually they will have to crack to, if we do not get a rally any time soon.

I don't see that happening because I don't have any leading stocks showing up in my scans telling me that the coast is soon to be clear. The good news is that my price-and-volume scans are starting to produce a few more stocks but when the scans produce between 10-20 compared to 100-200 during a bull market, you can obviously tell that we are still not in the right environment for going long stocks.

If there is any area that can be considered relatively safer than others it would be the small-cap regional banks and definitely the medical stocks. I have listed quite a bit of these medical and small bank stocks in the Silver and Gold Forums so that I may show everyone the few stocks that do look good and very well could be future longs. However, to become future longs, they will need to work on longer bases or build another base on top of the current base. Right now, most of these charts are a bit too choppy to pass all my criteria that I demand in my longs.

The good news is that this too shall pass. We came back from the 1930s, 1970s, and I am sure the insanity that is about to happen to this economy will eventually be cycled out with YOY numbers and soon we will have another uptrend to deal with. That is the good news.

The bad news is that for right now, unless you are going short or heavily cash, your portfolio probably has a lot more pain coming to it with unemployment hitting 6.4% and jobless claims touching 10 million. This is something that should take a while to play through the system but eventually if cooler and smarter heads prevail things should be moving higher again.

I will remind you one more time, we came back from the '30s and '70s. I am sure we can come back from the 2007-2009 downtrend with a few powerful longs eventually. The only problem right now is that there is no leadership. By just looking at the top of the new highs column it becomes very evident that nothing is moving higher. That my friends is different than any other bear market I have seen. Every bear market I have ever seen has had at least a few pockets of strength. This rally we don't have any but medical and even that isn't safe.

Since there is not much new to add to the analysis as long as we are in this downtrend that I have been correct about since the March rally fizzled and the top in October 2007 when I said to sell all mutual funds purchased in 03-06 bull, I suggest to take this time studying my Past Big Winners in the longs area so that you know exactly what to look for when people give up on this market.

Remember, when this market turns, I WILL STILL BE HERE, and I will have at least a few "hot" charts that will give perfect buy signals. There will be another bull market. It might not be a huge long term bull market but I don't need that. All I need is a strong uptrend or downtrend to make money in. If you are not aware of some of my top longs and (shorts) let me list a few here: ANCI 73% QCOR 37% (CETV 71% AAPL 39% CEDC 45% AMX 44% SPG 24% ARB 35% APD 41% ATHR 35% TITN 48% SBAC 44% GGB 61% OKE 34% POT 50% CYT 54% MOS 60% RIMM 51% CEO 45% SPW 67% CAJ 27%). All of these longs and shorts have been taken AFTER March. So as you can see even in this very difficult market I have no problem producing gains.

Heck, I will go even this far, if you are a newbie and you ONLY have a 15% loss this year, give yourself a big pat on the back. You are crushing the market and have more funds available for the next bull market! Remember, you must always beat the market, year in and year out. Even if you lose a little money, as long as you are beating the big losses of the market, YOU ARE WINNING! Remember, stay positive, vigilant, and keep those watchlist updated. Soon this too shall pass and another bull market will be back.

Daily Market Wrap Video is available on the Gold forums for Gold and Platinum members. Part two is also available.

Nasty Reversal By The Indexes Near The 50 Day Moving Average Might Signal That New Lows Are Ahead

I know a lot of people may not like to hear that but I want everyone to remember that I ONLY use charts to make ALL of my trading/investing decisions. I have not and will not be bullish on stocks until I see stocks bottom out and work on bases. Then and only then would I consider going long this market.

Instead, for right now, I will continue to stick with my short bias as the trend is very down and all I am doing is simply going with the downtrend. Now remember, just because I expect the downtrend to resume does not mean that it will. I am only setting myself up for more profits on the short side because, for one, they have already made me good money in a year that was dominated by massive losses in most portfolio. And two, they continue to be the only setups that are working in this market.

Recently, I went long a few stocks. At first everything was looking OK. But now as this market starts to plateau at this overbought condition near the 50 day moving averages, a few stock, once again, have set themselves up for future profits. How big are those profits going to be? Well here is a showing of my top holdings right now: top longs/(shorts): ANCI 71% QCOR 37% (TITN 45% CETV 70% SPG 22% CEO 38% SDA 67% GGB 59% RIMM 46% AAPL 37% ATHR 32% SBAC 40% AMX 42% CYT 50% POT 46% CEDC 43% MOS 55%).

As you can see a lot of the shorts have produced some nice short term gains. How did I make this money? Simple. I just followed the trend. Just go with the flow. Trust me, it will pay off.

I have been saying almost the exact same thing for the past few months now and I see no reason to change that. The trend is down, the money is being made in the shorts because being long is wrong, and until I see the market stabilize above the moving averages, strong accumulation enters the market, or new leaders show up I am definitely going to keep cash as my top priority. Not losing money here is as good as making money to me.

I wish everyone well, have a great day/night (depending on where you live), and we will do this all over again tomorrow. :)

Another Selloff Comes With Much Higher Volume On The Nasdaq; Futures Are Not Looking Good For Monday

October 5, 2008

Stocks got hit again on Friday with the DJIA and Nasdaq losing 1.5%. However, the damage was more evident in the Nasdaq due to the higher volume than the day before and a higher amount of stocks hitting new 52-week lows.

Some people are getting very bearish out there, and while they have very good reasons to be very bearish, it would be a horrible decision to decide to go short here. As silly it would be to decide you are going to go long right here. Right now, the market is clearly in a downtrend and that is the problem. It is CLEARLY in a downtrend. That means that it is now evident to everyone that stocks are falling so there is a higher probability of a bounce/relief rally coming sometime in the near future after prices fall a bit.

I am not a bull in this tape and if you watch the video you will see/hear the criteria that I must see in the overall indexes along with what I like the charts to look like. If we look at all the “big winners” from this last bull market, we can see that some breakdowns on long-term charts look like they are JUST BEGINNING. Therefore, I will continue to hold 1/2 my short positions in all the past leaders that have given me anywhere from 25% to 50% returns in just a month or two months. Folks if you get big gains that quickly on the short side in a bear market, you should not get greedy and try to hold out for the full 99.99% gain. Instead you need to take gains along the way because in EVERY BEAR MARKET there are a LOT of short-covering rallies that will cause major pain for those that chased stocks lower and decided to raid the cookie jar after everyone has already taken all the cookies.

If you are a subscriber you have seen me now operate the long side of the market and now the short side of the market. It should be clear that, by now, hopefully, I know what I am talking about. I only do this to make you a better trader and I will always stress that THE MOST IMPORTANT of all decisions to make about investing comes to cutting losses. I do not care what Cramer tells everyone on TV, the facts PROVE THAT YOU SHOULD NEVER AVERAGE DOWN as the best stocks year in and year out have proven that they don’t come from major downtrends. Instead they come from previous uptrends and then a sound base. After a proper base and the market conditions are correct those stocks go up anywhere from 100% to 90,000% like CSCO from 1990 to 2000. You simply can not make huge gains on the long side and huge gains on the short side (or be long a LOT OF CASH!! like I have been saying almost EVERY DAY for the past two months BEFORE THE BREAKDOWN AND AFTER TELLING YOU THE MARKET TOPPED IN OCTOBER/NOVEMBER) using Cramer’s methodology. That is why his Action Alert column is down 27% this year, while the worst account I run is down 7%. I cut my losses and go to 100% cash in bear markets in family/friends account.

However, for my account, as via witnessed by my subscribers, I am up almost 20% this year in my main account. This is because I have been long a few stocks that turned out to be big winners from beautiful charts. Along with being long those couple of stocks this year, the biggest portion of the 18% gain came last week when most people were losing almost 20% in one week. My account went from up 10% to up 18%. That came with me 80% to 90% cash. How did that happen then? I am short (I have covered around half of everything. The rest I am riding lower) POT MOS AAPL CETV RIMM along with others in that 20% of working capital.

So, once again, I have proven that a form of CANSLIM in bull markets (view my Past Big Winners Longs FOR FREE at my .com site) and reversed for bear markets (as subscribers have seen the past 11 months) is much healthier for YOUR account than watching Cramer on TV. Sometimes I wonder who is that person really who is calling in to his show for “stock market information.” I mean his AA portfolio is down 27% this year. So why are so many people buying stocks on the way down? I guess I will never know. I just hope a couple of people reading this who have lost a lot of money this year think about what they could do differently and maybe they will realize that buying stocks on the way down or shorting stocks on the way up is NOT the way to invest in the stock market. That method might work in the MOST BULLEST of bull markets but in a market like THIS NOW, there is no way you can buy stocks on the way down and expect to make money.

Instead try to learn CANSLIM and hopefully the FACTS will convince you to go long stocks only in a bull market and go short stocks that are setting up and breaking down after a big run-up (any stock with over a 100% gain in the previous bull market; I prefer stocks up 1000% or more from the low to the high) in a bear market. CANSLIM investors that understand this methodology were either in cash, short, or they were short and in cash. I held more cash this time than I did at the start of the last bear market but if this is going to last a while there will be many false rallies that lead to good short setups. However, keep in mind now that we are already 11 months into a bear market it could be dangerous to go short a lot of stock here. So don’t look for stocks already down 50% plus. I have gone short those and taken 1/2 my gains in them. Look for the stocks that are just now starting to crack. But first, remember, make sure it is up at least 100% from the start of the bull market in October 2002 to the end in October 2007.

There is not much else to say except that I should have been 100% short but seriously that would be way too risky. I am content staying 70% to 90% cash while the market is in a downtrend. When this bear market is over and the market is ready to move higher again, you can be sure that I will be ready to go long every stock that looks like LPHI (with max green BOP still).

LPHI is not a buy right now as it is setting up in a base. But a high volume breakout with BOP going back to max green BOP sure would make it a good possible long in this bear market. Its industry group is #1 out of 197 industry groups based on six month price performance. So there are a lot of great things going for it. However, you can be patient and wait for the market to be moving higher before going long.

Why? Because there will be 10-30 stocks that look like LPHI but they will have max green BOP the whole way down, they will have more average daily volume, and they will be of higher quality stocks. If you don’t know what a high quality stock is then you must start learning CANSLIM. The first step you could take to make a big difference in your trading is to NEVER buy a stock trading UNDER $10, even with the market in an uptrend with the market’s price above the 50 day moving average with the 50 day moving average over the 200 day moving average. You get what you pay for in the stock market. Rather you want to believe that or not it is the truth. Another thing to NEVER buy is a stock that went from $10 to $100 and went back to $10. NEVER BUY A STOCK THAT ROUNDTRIPS. EVER!

OK, I have done my duty to help those that have lost a lot of money the past week. There is nothing else I can say. Make sure to watch the YouTube videos if you have time (the 10/03 YouTube will be up before the opening bell). This will help you visualize what I am talking about much better. ALOOOOHA!!!!

Market Wrap Video is now available on the forums for Gold and Platinum Subscribers.

After Surviving A Maui Wedding I Have To Watch This Crap; Stocks Selloff As Volume Picks Up As "Rescue" Package Passes The Senate

Congratulations to everyone who went short POT and MOS with me. We now have gains of 43% and 51% respectively. It is time to take some profits, obviously. However, our holding period was not even one month and those kind of gains compounded and annualized our the kind of returns that you can get at BWT. Just wait till the next bull market starts. If you think my money will be in a mattress and my head will be in the sand, you are greatly mistaken.

By the way I want to remind everyone of all the hate remarks I received in March when I told you the banks had not bottomed. I was attacked pretty hard on the comments. Those same people must feel pretty foolish now. That is if they have any integrity. But for those short any of the 22 stocks I have taken short since June you now have around 25%-50% gains in a market where many people are down 20% plus. For those of you still not a subscriber to my site, what in the heck our you waiting for! For me to rise prices? How can I constantly be this right and have these kind of returns and justify the prices I charge!!! I am short AAPL, RIMM, POT, MOS and in under one month the lowest one is up 37%. Not to mention I told my subscibers to sell their mutual funds in NOVEMBER 2007 AT THE TOP!!! I have preached cash for newbies since then and when we finally stopped flopping around I issued shorts in many stocks now down a ton.

Why keep losing money at the sites that you subscribe to. Step up before I raise prices. Because come next bull market when I pick the next 100%, 300%, 500%, 1000%, and some 2000% winners I dont want a TON of people following me into my trades. I only want the most dedicated believers into this system. So stop losing money and telling me in emails about your horror stories, if you are not a subscriber. There is NOT ONE Platinum or Gold member that was long this year besides the few months we did have a chance to exploit the market and I made HUGE gains in stocks like PDO and DGLY. Besides that, for free, in this commentary I have preached cash and in the past month finally started to exploit shorts as they rolled over. Now the money that I have on the line has made me VERY HAPPY and produced wonderful returns. Not only that, the worst account I have, was given to me on November 02, 2007 and is ONLY down 7% compared to the 30% drop in the market. So when we do lose money here, we NEVER lose a lot. This is why you must always cut losses. This market sucks and I have said plenty that everyone that reads this should have been in cash. Tonight I will just promote my services.

Realmoney.com ran a 24 hour special for $99 for a year. Why do you think that was? You get what you pay for in life. You want to make the big money when this market turns around then you will be a BWT subscriber. If you do not want to make a lot of money then you will waste your time reading "free" market commentary. Enjoy the mediocre results and to all of those who were mean to me when they "swore the banks bottomed in March," you get what you deserve.

I say NO to a bailout. Let these companies fall on their own and let the greedy lenders and people that took out these loans pay for THEIR mistakes. I am sick of making wise financial decisions and NEVER being rewarded. Yet I see people F up all around me and get bailed out. I am sick of it, as a tax payer.



Gold and Platinum subscribers get full size version and part 2 and/or part 3.

Nice Bounce But Too Bad It Was On Lower Volume; Bulls Show No Conviction In Buying As Volume Comes In Lower Across The Board

We are living in the middle of a breakdown of the markets due to corrupt lending practices with greedy executives and uninformed people getting involved in business they never should have. This is never good for stocks and I don't care what anyone says. Shooting down that bill was the right idea. Let wall street battle it out. They screwed up and the tax payers should not be bailed out. At the same time capping CEO pay at $500,000 for running a bank is psychotic and shows NOTHING of a FREE market system.

However, I must admit the system is/was broken. When I left NYC in 2000 I knew there was more than what the .com bubble had. But I had no clue that it would ever get like this in real estate. I used to date a real estate broker in Maui and I used to tell her that this was going to end up destroying the economy one day. I kept saying it and when Ken Heebner got out of housing stocks and the biggest real estate investor sold all of his holdings in 2006, I KNEW it was over. The calamities to come however. No one could have known. Until this year that is. That is when it became apparent (well it was before that for those "in the know") that loans were given to people who had NO BUSINESS EVER receiving the financing they did. This was all done on a "bet" that "housing would continue to rise." How asinine is that??? Unbelievable greed at its finest. This is what is sick about my favorite, and the only form of rule that can make poor people wealthy, form of government. Capitalism.

The fact is we are headed down a road of socialism and I don't know what that will do with all my stocks. But all I am praying for is that the companies that were stupid and greedy enough to do these things will just have to take the beatings. I know it sucks but giving a $500,000 loan to someone without checking on their income...you get what you deserve.

I want the market to solve this and the government to stay the F out. I don't want them to touch this market and I want the strong to survive this wreck and the weak to leave. If we elect the Socialist Obama (which is looking more likelier) it is doubtful that we will be moving "forward" any time soon.

For now I continue to preach cash unless you were smart and went short with me when I went short. No one says when I go short 300 shares that you do too. You guys realize that commissions are $1 per 100 shares nowadays. You can go long 3 shares of AAPL short and enjoy the gains with me. The fact is that the money was laying on the floor this morning and in a lot of my shorts up over 25% in under a month I did take around 1/2 the money off the table in profits. I am now around 90% cash and will continue to monitor the market. However, I don't expect the market to rally higher.

In fact, I believe the market is just starting a long selloff and believe that the market has a long PROLONGED period of underperformance. However, I am a great stock picker and stocks like NCIT and LPHI, when you look at the fundamentals, you have to know in the future, when the market is ready to trend up, stocks "like those" (I AM NOT SAYING THOSE TWO ARE FOR SURE, Obviously) will do well. We will have a better market to choose from and some of these HORRIBLE mutual, hedge, pension, lending funds deserve and need to go out of business to have the honest and respectable investors take over a market hobbled by a bunch of regulatory BS.

Also the ban on short selling is the most ridiculous thing I have ever seen and I believe it is a sham and a scam to the American people once again. Any time you blame the short sellers, you send off a HUGE RED FLAG TO ME that their is real problems. So the fact that they think it is necessary to halt the short sells of like 900 stocks is a sign of massive problems and unlike 1987 I don't think our plunge on Monday was the last one. I believe, by looking and reading my charts (you know, crazy voodoo tactics), that there is a lot more pain in store. The leaders just cracked apart. They have a LONG way to fall. I know so many buying them at the top. That is GREED my friends. Greed destroys capitalism. Everyone gets what they deserve. If you buy AAPL at 170 and you don't cut your loss then you deserve to feed my family as it falls to $20 and I am short. Dumb money moves to the smart. It always has and it always will.

However, for the first time in a long time I am starting to believe a lot of the stuff Ron Paul has to say is starting to make a lot of damn sense. You know the Congress is MESSED UP when you hear that from me. I think the Fed should not DARE inject more liquidity and if it takes 11 years to return to the 2000 Nasdaq highs then so be it. During that time, I will find hidden gems that will do better with less market greedy psychotics trading my stocks. From 1996-the top in 2000 it was easy. It was easy in 2003 and basically 2004. Since then making money has been hard. But this is the hardest environment I have EVER seen. Way harder than 2000-2002. Why? It is hard to short because perfect short setups are not forming like they did in 2000 and obviously beautiful charts like that from 1999 and 2003 will not be showing up till at least 2009 if not 2010. Reality must be looked at here. Those that LOVE THE STOCK MARKET, like me, will still be around. Will you. I hope so.

I hope everyone feels a little better that the market did not fall apart today. I am glad some people used rational behavior and made a market for stocks today. Things are very bad (in fact darn right horrible) and I do expect a recession. However recessions set us up for new and exciting companies. The only thing that can destroy this country is spending too much via Congress (so far they are bringing us closer to our deaths) and complete greed/corruption ruining great markets in the greatest country that creates some of the greatest inventions the world has ever seen. The railroads, the airplane, landing on the moon, the TV, and the computer. You know that the spending on baby boomers will rise as they get older. Healthcare, Medical, and Biotech stocks should do OK during this rough market and if we can get the averages above the 50 and 200 day moving average with the 50 leading the 200 I am sure we will see other great longs. Just like ANCI was. I am still long this stock and enjoy a nice 91% gain in three months despite the worst market we have seen since 1987.

I can not wait till my max green charts loaded with strong accumulation with a huge surge of volume on the breakout come back. Everyone told me after 2000 that I would never see the charts I saw with my own eyes and that I have posted in my PAST BIG WINNERS section for longs ever again. 2003 proved them wrong and the future will prove those that think they will not show up again wrong. Never short America. We have had other bouts with socialism and many great stocks still appeared during those times. Don't worry I will find your needles in the haystack. Charts like LMLP in 1999 and EPIC/HIL in 2003 will setup again. Trust me. History always repeats itself. At Big Wave Trading, with me, Market Speculator, and Author Ego you will always be long uptrends and in cash or short downtrends. There will never be an unexpected crash that kills and wipes out our gains. I know how to read the market, I know how to actively invest in the market, and I LOVE DOING IT. I started doing this at 16. The goal is to make at least 96 to make it 80 years of trading. I'll be here the whole way.

Aloha and remember better times to go long WILL come again. For those that were trapped and lost a lot of money, try a subscription to the BWT site for a month. What do you go to lose. A cost of my subsciption was probably lost by more than 1,000,000 active traders. A full year sub was probably lost 10x over by a lot of people yesterday. Be wise with your money and even wiser with your money in the market. Aloha and I will see you tomorrow around 7AM HST.

By the way, for those that care, I saw the biggest turtle in my life today snorkeling after surfing. Pretty crazy after 8+ years here and many snorkeling trips that I finally saw a turtle as big as me. My friends it was huge. I wonder how old he was? Surfing and snorkeling. Sure beats this market. Unless you are 400% short.



Gold and Platinum subscribers get full screen version and part two and part three if needed

Here Is The Video From Today's Market up

FULL SIZE IS AVAILABLE TO GOLD AND PLATINUM MEMBERS:





FULL SIZE IS AVAILABLE TO GOLD AND PLATINUM MEMBERS

Wild Day Of Trading Leaves Indexes Mixed With Little To Show For It Up Or Down

September 13, 2008

Well, well. It certainly was an interesting day on Friday as more horrible drubbings hit WM, AIG, and LEH. Add that to FNM, BSC, FRE, and the previous insurance stocks and you can see how a lot of people have probably had their you know what handed to them. If they were on margin at any point trying to “find” the bottom, it is probably a lot worse.

But as everyone that has been reading this blog has known, you NEVER hold stocks that are trending below the 50 day moving average with the 200 day moving average trending above the 50 day moving average. These stocks are not only ugly and laggards but they are clear GET OUT signals. Anytime you are in a stock in an uptrend and they roll over and a “death cross” happens while the stock is moving lower, it is time to get out–NO QUESTIONS ASKED. You normally find out much later the real cause. Those that would have done that with FRE and FNM would have been out around $60 and $40 respectively. Notice we were not buying those laggards here.

Remember all the mean people that told me to load up on the banks back in March. Well, I wonder if any of them are still alive or if they committed suicide recommending me to buy JPM or LEH. Granted it hasn’t been a horrible ride for JPM, YET. But LEH proves that bottom fishing is still a stupid game practiced by those that do not know how to really make money in the stock market. Anyone with a brain knows that YOU NEVER BUY A STOCK trending below the 30 week moving average and you NEVER SHORT a stock trending over the 30 week moving average. If my past big winners in 1999, 2003-2007 did not prove to you that buying stocks while the indexes are in uptrends and to avoid stocks by going into cash when they enter downtrends like they did on October 31, 2007, nothing will ever prove it to you.

Maybe these facts will hit you with some realizations. Comparing 2003 to 2008 lets look at how many stocks have made big gains to now compared to the same time in 2003. In 2003 there were 13 stocks up 1000% by now; this year there is 0. In 2003 there were 92 stocks up 750% by now; this year 0. In 2003 there were 180 stocks up 500%; this year there is 4. In 2003 there were 412 stocks up 200%; this year there is ONLY 12. And the biggest proof we are in a TOTALLY different market is that in 2003 there were 949 stocks (by the way, that still exist on the exchanges after 4 years) up 100% compared to ONLY 50 this year!!! If that doesn’t prove to you the trend of the market is important-NOTHING WILL.

One more burden of proof is that in 2003, the FTD came on volume that was huge and took the price over the 50 and 200 DMA on the Nasdaq. The entire uptrend had the price above the 50 DMA with the 50 DMA above the 200 DMA the WHOLE WAY in 2003 going into its short-term top in 2004. By contrast, in 2008, our indexes have been in severe downtrends with price below the 50 DMA with the 50 DMA below the 200 DMA the entire way.

If this still does not prove that is important to you let’s take a look at China. The whole way in 2006-October 2007 (when China topped too), the indexes price stayed above the 50 DMA with the 50 DMA above the 200 DMA. The few times the 50 DMA did not hold the 200 DMA was there to support the index (but it didn’t need to be as the index immediately ALWAYS took back the 50 DMA). And this year as China is down 65% from the top in October you can see price has been below the 50 DMA with the 50 DMA below the 200 DMA the entire way down.

I am not sure when people will learn to only invest with the trend when it is up and to stay out of stocks when they are moving lower. But I feel it is my calling to try to help all of you from having a -20% portfolio like Cramer has this year. My worst port is down 7% and that is my girlfriends portfolio that was given to me IN OCTOBER (at the TOP!)!! So compare my 7% loss in her account and my overall 10% gain this year (which by my standards is HORRIBLE but compared to Cramer is FANTASTIC) to so many out there that bought FNM, FRE, LEH, BSC, AIG, WM, and stocks like RDN and MBI the whole way down. I think you know who is doing better. That is why my subscribers are killing the crew at realmoney.com which is made up of a lot of horrible “Wall Street bag men.”

Nobody and I mean nobody who subscribes to me is down 20%, if they are using my techniques EXACTLY like I tell them to. So to all of you who do not go with the trend, God bless you. You are going to need the big man upstairs. If you still don’t understand why the trend is so important, you might want to pick up books written by Livermore, Loeb, O’Neil, Weinstein, or Darvas. They will change your life.

I will add more to this on Sunday. But for now ALOOOOOOOOHA!!!! Enjoy the market wrap up video. I know it is hard to see but subscribers get crystal clear Camtasia studio versions. So give us a try, you will NOT be disappointed.

Friday’s Market Wrap:



Gold and Platinum Subscribers Get Full Screen View and Part Two (longs in my scans) and Part Three (shorts in my scans)

It Was A Nice Rally But Overall We Haven’t Gone Anywhere

September 12, 2008

It is extremely late and I am too tired to write a market commentary so my YouTube smaller sized video will have to do for the people who like reading the commentary daily.

Remember, this is the small sized YouTube video. Subscriber get the full screen version along with the usual part two and part three that follow with me going over my long scans and the last video going over my short scans.

Enjoy, Part One and make sure you pay close attention as following the trend will always make you a lot of money:



Subscribers get full screen size and the rest of the videos that I make thoughout the day!!

Weak Bounce On Lower Volume Shows That The Bulls Don’t Have Much Gas In The Tank

September 10, 2008

This market continues to do what I told you it would do as soon as we came back from Labor Day. Since then, I have been practically on top of this market not missing anything.

The only personal problem I have run into is how come I do not put as much money into my “for sure” sort of shorts. Like I know AAPL, BIDU, RIMM, and GOOG are all breaking down heavy and as we see their marketminder they sure are breaking down with some people staying on the ask giving everything they want to people bidding for these broken stocks.

The main thing to remember, if you have been watching the videos that are now coming with these market commentaries is that without low volume on the selloffs that is followed by heavy volume on the up days, this market will simply keep falling for as long as it has to fall or it will do what it does until accumulation comes in.

The other problem (big problem) with this market is that everytime a beaten down industry tries to come back to life like homebuilders, banks, and insurance companies just more and more problems happen. This is keeping a lid on leading sock is it helps prolong the time we have to wait in this downtrending to sideways moving market.

It simply is not going to be ready until a new industry like a new alternative energy source that pumps out a lot of earnings and huge sales growth. It is going to be a long time until these industry groups show up as a big shakeout must occur where all the past big winners fall and we go through a time of base building that will allow the proper stocks with the right fundamentals to base and eventually build a nice long base that then has a perfect accumulation and distribution pattern in a nice round cup like pattern.

However, I believe we are a long way from a real bottom as I keep saying all the charts that are trying to shape nice bases either carry too little average daily volume, are sub-$1 stocks, or are in industry group that is in the bottom 25% of the entire 197 industry groups that exist in IBD’s data base.

The bottom line is that we are still are no where near a bottom and all of those that continually try to call one are doing nothing but wasting your money. In my worst account I am down 7%. The best growth mutual funds are up only 0% to -5% the past three months. So that should tell you how rough the market is right now. Overall the only place to hide is in medical stocks. I have a few medical stock that have made some nice moves like XSI which produced a 100% in a couple of months. So unless we see a

Free YouTube small version of Part One of the market wrap on Wednesday. The big part one, part two, and part three videos are available to gold and platinum members. Part one is over the general market, part two is going over the longs on my longs scan, part three is the shorts that are in my short scans.

Part one for YouTube (even though it says the 9th, IT IS THE 10th. It is a clerical error:

A Not Suprising, To Me, Major Selloff Hits The Markets The Day After I Said A Down 3% Fall Was Probably Around The Corner; Cramer Keeps Buying A Broke

September 10, 2008

Today shocked me about as much as the sun coming up this morning did. This seemed like a perfect reason to bid the market up–and then put out my shorts–so that the usual trend of the overall trend could return. That would be Mr. Downtrend. He has been around since November and even though the downtrend took a semi-time out during the January to August period it is clear stocks are moving lower on every index now.

I have made mention that we have been in a downtrending market since November and made money in shorts from November to January. Since January not much money has been made till August. But recently we have started a downtrend on all the indexes with volume picking up. This has given us a lot of short candidates to mess with and most of them are working. As long as the market continues to selloff on strong volume and rise on lower volume–actually the market can selloff on lower volume so it really doesn’t matter.

The bottom line is that there is no way anyone should be buying stocks and if there is any contributor on another other website recommending buying stocks that are trending lower with the primary trend down with the stock below the 50 DMA and the 50 DMA is below the 200 DMA, you should immediately discontinue reading this contributor that is recommending this stock that is in such a downtrend. And if these contributors are telling you to not cut your losses until you lose 50%, you need to move on to another stock market commentator. These guys will kill you and will make sure you have nothing left in your account by the time the next real bull starts.

So don’t believe the crap you read in the Wall Street Journal, on Thestreet.com, or watch on CNBC. These people have a different paid agenda to drum up business for their market makers to sell into. They tell you, you should do this or that. Then they go and sell into the retail crowd that are buying the BS that they have just drummed up. They sold on the way up. But to get rid of the rest they have to sell on the way down while the market is falling apart. The only way to provide even a little bid is to trick the pubic into placing bids for stocks that they are dumping to you.

It is a big mind game. Do you want to know how to not follow the wrong LIARS on CNBC and the Wall Street Journal? Start by watching my free small size YouTube market wrap videos. Then use those video market wrap ups combined with the William J. O’Neil’s fine Investors Business Dialy “The Big Picture” and their own “market wrap” video and I believe you will be a lot farther along your way to success than you ever will be subscribing to the Wall Street Journal or Realmoney.com. Both of these publications have fallen from respectible sources of information to a big public joke. Look at the price of both parent companies that run both.

To learn how to look at the market the right way and make the big money on the downtrends and the uptrends without falling for the same BS from CNC and the WSJ, start by watching the video below and procede over to IBD to watch the videos there.

Subscribers get access to many videos that look at many different uptrends and dowtrends in the market along with past big winners and day by day analysis of the entire gain. I don’t know it is either me with a bunch of winning stocks in bull and bear markets and a proven track record since 1999 or the dying Cramer with an amazing -18% return this YTD. I think I know which service I would be picking.

Free small size YouTube Version (7 minutes):

September 8, 2008

Well obviously the news of the day was FNM and FRE getting crushed 90% each. For those that know how to read charts you were out of the stocks around $50 in FNM and FRE. So if anyone is actually shocked that the stocks are now trading for under $1, I will say it ONCE AGAIN, you do not have a firm grasp of market history.

Stocks that look great at $50, look better at $40, look the best at $30, can’t be a miss at $20, is an automatic triple at $10, and worthless at $1. That is how is usually goes with 90% of investors out there who think they can trade like that nut Cramer and buy down. He was bullish on the oil pullback that is obviously a top. He makes a comment today that the market is moving on charts and not fundamentals. Does he not understand that in the markets THE FUNDAMENTALS LOOK THE BEST AT THE TOP!! Every bull market ends the same way. With leading stocks showing AMAZING earnings. The stocks top and rollover on huge volume, start a nasty selloff, yet earnings are still amazing and he acts like the world is messed up. No sir, you should know the market tops when earnings look the best. It always has and it always will.

The bottom line is is that these indexes are all in downtrends and being short is now going to pay off more than being long. This also helps seperate the leaders from the losers and eventually allows us to see which stocks are starting to form bases for the next bull run. If it takes a long time for the Nasdaq favorites, oil, ag, manufacturing, and metals stocks to selloff then some very nice long-term bases are going to be made for us that could be the next big leaders in the next bull market.

But some of you seem to think this delays a bottom. I hate to remind you, ONCE AGAIN, that this bull market STARTED in October 2002 and really took off offering up TONS of HOT! and MONSTER STOCKS around March 2003. When you come into the market in 2007–four years after the market started its uptrend–you can be sure that you don’t have much more time for a bullish stock market. But since you entered late and your entry marked a top you can use the next 3 months to 3 years (YES, it could take that long) to study all of my past big winners and all the past big winners of 1890-1996 and see how to hold the 100% to 5000% winners when the market is in a strong uptrend. If you look at China in 2006 and 2007, you can see the exact same pattern that our Nasdaq had in 1999 and 2003. The gains in the Chinese stock while China’s regular market went up 400% prove that when the markets are in an uptrend and stocks are breaking out on huge volume going long is right as long as they are above the 50 and 200 dma and 30 week moving average.

There is nothing that has changed much as all indexes are still in downtrends. The SP600 looks the best but when that index looks good the IBD 100 and IBD 85-85 index looks horrible and are trending well under the 50 and 200 day moving average. That tells you how weak the LEADING stocks are. Combine that with the Nasdaq that can not rise because the leading 4 letter stocks–AAPL RIMM BIDU ISRG GOOG MSFT ORCL CSCO ORCL YHOO–that make up large portions of the index and represent some leaders of the past bull market should show you how weak the market is as these stocks (not all; but most of them) are just now breaking down and even though volume doesn’t seem high. Those that know history know that low volume can start a selloff and then the volume can increase as the stock continues to selloff. I think the market overall was just a good example of that as the Nasdaq started selling off recently with two days of lower volume selling that was followed by two days of above average selling. Now today the index opens strong sells off but can’t get back to much of the loss as it tried to rally late in the day.

This still gives the overall markt a negative look despite some DJIA stocks doing well. The leaders are in the SP 600, the Nasdaq, the IBD 100, and the IBD 85-85. None of these indexes are in the proper trend of trending above the 50 DMA with the 50 DMA above the 200 DMA. No instead, all of these indexes, except the SP 600, are going the exact opposite way.

That is why shorting has been my main way of attacking this market recently but I still am holding a lot of cash as I just can’t trust this market at all as it is still pretty much going nowhere. But with so many trends now below the 50 DMA with the 200 DMA I believe it is safe to go short the leading stocks that have made 100% or more gains during the past bull market from 2002-2007 as long as they setup from a proper short pattern–most look like a heads-and-shoulder top. When the market was going nowhere we did nothing. But now it is trending a bit down and some shorts have definitely started to add up in the portfolio. We will be quick to cut the loss if they do not work, but with the market now trending below the 50 DMA with the 50 DMA below the 200 DMA and all the market leaders breaking down on heavier volume after making ugly bases I am praying the part of my portfolio that is short will make enough money to make up for the heavy cash level that I think is wise to have while the market still is not trending VERY CLEARLY. We are trending down but so many people are still trying to call a bottom that I think we might have a lot more to go to make a five year bull market and the constant bottom callers who just joined the market will not stop trying to call a bottom. Until they shut up and realize they missed the start where the BIG MONEY IS MADE, they will never be able to make the BIG MONEY in the MONSTER STOCKS. Those will be reserved for the best active-investors.

Those that make it through this bear market that study the videos and the rest of my longs and past shorts will be VERY READY for the next bull market. You just have to remember that you can NOT give up during this bear. PATIENCE, PATIENCE, PATIENCE, and more PATIENCE will be required for the selloff to do what it has to do. FNM and FRE going below $1 is not going to put in a market bottom. It is time to get a little more real in this world where reality is the truth. And part of that truth is John McCain overtaking Obama in the latest Gallup poll 48% to 45%!!!!! Now that is some great news to end the day on!!! ALOOOOHA!!

FREE SMALLER SIZE YOUTUBE VERSION OF MY MONDAY MARKET WRAP. THIS IS ONLY PART ONE OF A TWO PART SERIES. SUBSCRIBERS HAVE ACCESS TO FULL SIZE VERSIONS AND THE LONGER PART TWO WHICH GOES OVER IMPORTANT “OTHER” INDEXES AND STOCKS I AM WATCHING ON THE LONG AND SHORT SIDE WITH UNUSUAL ACTION.

The Trend Is Still Down On Most Time Frames And People Are Still Trying To Buy “Bargains”; When Will It End–At The Bottom When They Are Broke

September 3, 2008

Today was a basically nothing day as it was just another session that showed an overall weak market in play minus the DJIA which inched up 15 points. This is nothing I would get excited over with the rest of the market falling. So take the gains in the DJIA as it is which I believe was a great session by one stock named General Motors (GM).

The upside leadership remains a joke and even though the SP 500, NYSE are in clear downtrends with the 50 DMA being trailed by the 200 DMA and the Nasdaq is rolling over I am still getting a few NEWBIE investors that are not familiar with the CANSLIM strategy continue to ask me which stock I am buying. I think I have made it clear to platinum investors and I think I will make it clear here.

Unless the stocks sets up just like XSI has in June and August, there is no reason to go long any stock here. I continue to SHOW YOU and REMIND YOU that the best stocks that move up 500% to 3000% during a run that last around 12 months come in BULL MARKETS WHERE THE INDEXES PRICE IS ABOVE THE 50 DMA AND THE 50 DMA IS ABOVE THE 200 DMA. Unless the stock market where the underlying index is coming from is moving up with the moving averages lined up correctly THERE IS NO REASON TO LOAD UP ON ANY STOCK–THIS IS EVEN IF IT HAS SETUP PERFECTLY LIKE XSI. XSI trades too few shares and is too low priced of a stock with the trend being down to yell at everyone to buy it. But if you were a member of my chat room there was no question I was adding to it on 8/13 as it has been the ONLY PERFECT STOCK out there in a market full of ugly stocks. You know why? Because it is in a rising sector called Health Services-Specialized Health Services and the stock is experiencing HUGE EPS and Sales growth where the sales or eps has not been below 114% since the June 2007 quarter.

So you have a stock rallying on strong accumulation and a lot of accumulation, it builds its way from green to max green BOP, and sets up in a nice round perfect chart pattern, while not another single stock looks as good as this stock, and it has EPS 150% and higher the past four quarters with sales 114% and higher the past four quarters. This was an easy long to buy in a negative market as the max green BOP and 95% gain in a little over two months proves it. Why did so many people miss this and why are they recommending stocks down on such strong volume.

I heard a loud talking head on CNBC bought NOV, right after I saw some “smart” analyst tell viewers to buy HAL and NOV yesterday. Did you see how HAL and NOV did today? In a bear market these guys are set out to sell to you. Just like when Heebner was on CNBC telling people to buy PBR. That day I received over 5 questions asking me if I should buy PBR. I tried to sell them on an arithmetic chart how exponentially to an actual climax top it was having. I believe this was on May 20th and if my math is right I saved 5 people 36% as Heebner got the bids from the CNBC viewers to help sell into without crushing the stocks.

When a mutual fund with great returns has gone from $100 million into funds to $7 billion into funds and is now regular guest on investment shows, trust me, they are not out there telling you what stocks to buy. They are telling you what stocks to buy so that they may sell to you. That way your bid keeps the stock from falling too far too fast. If you look at UPL, NOV, HAL, ATLS, RIG, HES, and CLB and if you think you see bargains instead of dangerous stocks on the verge of a major breakdown you really need to either subscribe to this site or take the time to watch my market wrap videos on YouTube which have me going into detail on the major market indexes and why they are so negative right now compared to any time like 1999 and 2003. There is no coincidence that by now we have only had 227 stocks go up 50% this year compared to 1,266 stocks up 50% by this time in 2003. In 2003 there were 587 stocks up over 100%, so far this year there have only been 69. So why are you newbies still buying stocks. Unless it looks like my past big winners or XSI, do not buy it!!! That means there is not ONE STOCK OUT THERE you should be buying. I have screens that show me XSI before they breakout. Those screens are EMPTY right now. So watch out for going long in a downtrending market. You can really lose a lot of money and by the time the real bull market comes you will be out.

Don’t forget to watch my free market wrap videos on YouTube. I have many other videos on past big winners and how I use IBD but that is for Gold/Platinum Members only. Also the YouTube format is a shrunken version so if you want to see a larger sized version sign up for Gold or Platinum and then you get full screenshot videos.

There should be the Wednesday market wrap up by Thursday morning. If it is up earlier I will post a LINK here. ALOOOOHAAA!!

The Trend Was My Friend (Down). Was It Yours?

September 3, 2008

I am hoping that a lot of people have realized that the bull market we have had from 2003-to the last day in October was “the bull market.” The facts remain that we are in a downtrend with an overall sideways bias that has made it very hard to make money since January. But now something feels bad and the market feels real heavy.

Not only that, I see charts breaking down from very early topping positions, and I have ag, gold, oil, and other stocks like steel stock breaking down from key breakdown pattern that usually mean the stock is not coming back higher any time soon. This is the time when Wall Street comes out on CNBC and tells you which stocks you should buy so that they may have a market to sell into.

I turned on CNBC for 10 seconds today and saw a guy mention two stocks breaking down with one HEAVILY BREAKING DOWN like his fund was selling to EVERYONE who wanted to buy. The first “buy” recommendation was for HAL. Has anyone noticed that HAL has risen around 400% as a very large cap stock since 2002 till the top that came right after it announced a split. A split is usually a last desperate hope of a big-cap corporation to have small investors find interest in the stock so that they may sell into that crowd. Since that SPLIT the stock is DOWN 36%. During that time the past two months, XSI has risen 85%. Sometimes those you see on TV are not trying to help you AT ALL. There only job is to drum up demand so that they can sell there shares that have topped.

The last recommendation was to “buy” NOV. This stock topped with the rest of the oil stocks around June to July but it held up better than the rest. The only problem was while the stock was holding up it was slowly rolling over below the 50 DMA and the 200 DMA on strong volume. The distribution days are clearly visible on a zoom 5 chart that makes those big red volume distribution bars stick out. Then when I saw it breaking down today below the 50 DMA and 200 DMA on very strong volume I could completely tell that this guy was trying to save his behind in this stock. I am not sure if he was long this ugly stock but if he was not someone he knew was and he was trying to help them. There is NO possible way an intelligent person would be buying a stock that was breaking down on heavy volume after rolling over both key moving average. He had to be on the air to lie to people. After hearing that recommendation, I immediately turned off CNBC and never turned it back on again. When am I going to learn that watching that garbage is nothing but a reinforcement to my Investors Business Daily CANSLIM methodology which continues to crush most analyst gains when they come on air.

Before I go, because you can now get all of my market commentary in video form at youtube. I must say I am shocked at how many people can turn bullish besides the trends being clearly down. I am just a little shocked that so many average people love to buy stocks hitting new lows as they feel they are getting bargains. Folks, if you fail to learn from history, the stock market will eventually wipe you out. I have NEVER been wiped out and I NEVER will be because I cut my losses and only AVERAGE UP when I buy a stock and NEVER average down which is a losing strategy. I just hope you folks are learning a lot right now so that when the bull market does come back. Which it always does you will be ready to score the 100% to 2,800% winners like I was able to do during EVERY uptrend the stock market had from 1998-2008. If the trend of the market is up then your chances of making money increases a lot.

Also another note about the videos. I know the video clarity is not that great but you have to understand gold and platinum users get camtasia versions that come across the computer VERY CLEAR AND PERFECT. The charts are large and everything is clearly legible to read. The small YouTube clip is what you get for free. You get what you pay for and that is why some people are long a lot of cash, like me, avoiding the crumbling to go-nowhere market. And at the same time going decently long stocks like XSI that is up 85% in a little over two months. Some things in life NEVER change. The stock market is one of them. It may act differently and plain “Ol’ Stupid” sometimes but you know what? Every bull market will give you one or two stocks up 1000% and around 10 up 100-300%. We just need a real bull market. Study all my past big winners and you will learn quickly enough how well this methodology works compared to the value guys. I still have not met a value guy who has consistently during EVERY bull market period had a 100% winner much less a stock up 500%. Stick with the CANSLIM system in a bull market and remember to stay in cash in a bear market and you will increase your odds of making money by 50%. Each thing you can add in your favor you should do in a game so unlike the 1980s and 1990s. Boy-oh-boy do I miss those times in the market. That was back when CSCO went up 90,000% from 1990-2000. I miss those days so much.

Have a great day and I hope you a very profitable Wednesday trading session.

Stocks Continue To Drift Around On Low Volume With A Slight Downtrending Bias

There isn't much I have to say this Labor Day except God bless everyone on the Gulf Coast. I am very happy it was downgraded along the way. ONCE AGAIN, the media hypes it like everything else. I am very happy the damage did not occur like Katrina and think it was a CLASS ACT of the RNC to turn its convention into a fund raiser. That is the way to do it!

Back to business, in this low volume market I have made all the key comments I can make the whole week long. The main thing to remember is that the trend is down folks. This is not a market coming from a long-term uptrend or an intermediate uptrend. There has been clear heavier selling compared to accumulation but at least we do have medical stocks looking good. It is hard to go long or short a low volume market and it is pointless as your chances of being whipsawed.

There are very few CLEAN and CLEAR uptrends or downtrends where the stock breaks down at key resistance or stocks bounce at key support. It remains a very random trading arena and unless you are daytrading and even if you are daytrading you need to remember you can be wiped out on one big block order in this market. You can see how quickly stocks fall apart by looking at any insurance or bank stock and you saw how DELL acted Friday. If GOOG, MSFT, BIDU, or any other high-priced stocks start breaking down this market could get ugly. I don't like how some of these stocks have come back up to old highs on EXTREMELY low volume. This gives them up to the perfect opportunity for real sellers to come out and sell on the retail mark-up.

I really am trying to find positives in this market. A few are that that big MER bounce day on HUGE VOLUME is holding and the stock is acting like it wants to retake the 50 DMA. Also RDN, MBI, and ABK all looked like they were going to go under but HUGE ACCUMULATION has entered those stocks with max green BOP helping possibly stick in strong bottoms. There is no guarantee but before this market can even show us its new round of leaders (trust me it isnt just going to be all medical), you have to have the most beaten up stocks with real earnings to show bottoming patterns. And the banks and insurance companies are showing some support. Maybe if tech continues to selloff they can be the next to find the bargain funds that will pick them up that will help us find our next batch of leaders. As you can see by just going through the 197 industry groups in IBD, you can see ONLY medical stocks and a few Service sectors are even in uptrends on the intermediate and sub-intermediate term.

So there is not a whole lot of places to make money outside of medical but medical normally leads in a bear and since they are doing well and we see some stocks possibly bottom it could be not too much longer before we could be closer to the end of this bear. Too bad there will more-than-likely be another leg down (just look at the RS line of the NYSE) since all the former ag, gold, manufacturing, and other agriculture related stocks are starting to rollover. Don't forget oil stocks are also starting to rollover. We could soon be seeing another big move down as NYSE stocks rotate into the Nasdaq. That could be why the Nassy has seen some recent RS gains compared to price recently. Either way, with all the low volume, there is not much to do and I think Jesse Livermore made it VERY CLEAR that the BEST traders DO NOT trade ALL THE TIME and that they only trade when the trend is their friend (we are flat since January--we have no friends) and Gerald Loeb I think says it best below:

“Profits can be made safely ONLY when the opportunity is available and NOT just because they happen to be desired or needed …Willingness and ability to hold funds UNINVESTED while WAITING for real opportunities is a key to success in the battle for invesment survival.”–Gerald Loeb

Enjoy your Labor Day and do not forget I am posting quite a few new PAST BIG WINNERS and other videos this weekend for Gold and Platinum members and pretty soon this weekends PART ONE market wrap should be up on YouTube pretty soon. It is already up for Gold/Plat members in the forums. Enjoy your Labor Day and I will see you tomorrow (Tuesday)!