ON VACATION UNTIL NEXT MONDAY BUT HERE IS MY DAILY CHECK-IN…..
July 31, 2007 | Leave a Comment
This is what I wrote on my “new shorts” section:
Remember, this market might be in a correction but the leading stocks like RIMM AAPL CROX GOOG TNH and FWLT have not put in clear tops yet. When these stocks start to breakdown you can guarantee the time to make the big fast money shorting stocks will be then. But for right now the market is only starting to weaken. Do not jump the gun and think this is the ultimate top. People did that in 2004 2005 2006 and in February 2007. Every downturn you see in your charts was supposedly the start of the next big bear. Well, until those stocks I just mentioned all start breaking down on huge volume on their weekly charts, fail their 50 and 200 day moving averages then rally back and fail those test you simply can not say that the big bad bear is here. Could this be it? Yes. But until my true leaders breakdown I am not going to go 200% on margin in these shorts. For now they are very tiny test positions, since my other short recommendations have been doing so well recently.
The other thing that keeps me from shorting the market to kingdom come is that I still have a lot of longs well above their 50 day moving averages and above key support.
Nasty Last Hour Leaves Indexes Soaked In The Red, In A Week That Saw The Market Make A Major Character Change
July 28, 2007 | Leave a Comment
Even though I am vacation, if I did not have work to do on this site, I can literally scan my charts and place all my orders within an hour and a half. So remember, even though I am on vacation, I am ON TOP OF THIS MARKET. This market right now should NOT be bought until AFTER we get a follow through day after an attempt at a bottom. Seriously, with the put/call ratio so high for so long, it is possible that there is too much fear in this market and that the lows have been set. However, we very well could be topping, because that is what it looks like out there in the Financial stocks and the general market. However, with the NYSE short interest and put/call so high, it just seems hard to think we could really breakaway and crash from here. So one thing I doubt is going to happen will be a black Monday.
However, I would not buy ANY market EVER that looked the way it does right now. This next week will be the key. Further selling and we definitely have some problems. If we bounce, there is not much to do other than wait for the proper breakouts from top stocks. If we do not see this happen, then we will have probably topped and I will begin my raids on the short side. As for right now, the crack in the market is too new and the bearishness according to the actual money is too extreme. So, keep that cash heavy, get off margin, sell ALL your laggards, do not buy new longs unless the chart is perfect (NAK is not what I would call a perfect chart), and if you do decide to short, please keep it small.
I Leave For My Vacation Tonight And What Happens…The Markets Crash. LOL.
July 26, 2007 | Leave a Comment
It is very very important that you read your IBD Big Picture tonight and go over the B section of the General Market. You must read what IBD writes. I am taking this as a correction and am advising EVERYONE to not go long stocks, do not chase shorts, but if something is setting up near both the 50 and 200 dma to go ahead and short. We might have bottomed today, with the horrible breadth, up to down volume, and the huge volume we saw. Only the upcoming week of trading will let us know what is going on. But for now, like I have been recently advising, its time to get off margin, sell laggards, stop buying stocks, and to monitor your stocks that are going up for clues that they might be over. Do not sell everything. If your stock acts like VDSI did today, then obviously there is no reason to sell. If your stock acted like BAM then you need to get out.
I will try to have more before I leave, but if I do not, don’t worry, I will have internet access where I am going. Aloha for now.
Three True Leading Stocks (AMZN BIDU AAPL) Hold The Market Up Despite The Horrible Breadth
July 26, 2007 | Leave a Comment
Today’s trading shows that it still is not the right time to be calling a top and the action after-hours confirms this. AAPL and BIDU both blew away numbers after hours and both are trading up considerably now. AAPL blew past third-quarter forecasts, driving shares to an all-time high in after-hours trading. The stock was up more than 8% to $148.50 following the report, a slight retreat from earlier toppling the $150 level in extended trading. Then Chinese Internet company BIDU breezed by Wall Street’s second-quarter forecasts Wednesday as profit more than doubled up 128% and sales up 120%. This gives BIDU eight straight quarters of EPS and sales growth over 100%. Simply incredible. This is a leading stock! Shares rocketed 21.6%, or $39.61, to $222.84 after hours.
However, despite these stocks holding up and leading the market, the breadth today was quite poor as decliners beat advancers on both exchanges despite the gains. This shows up also in the new lows where there were 551 today compared to 105 new highs. So obviously it is very weak out there and if you check out a chart of the advance/decline line you can see that that line is leading the indexes lower. The other area it is clearly obvious that weakness is now in this market is in leading stocks. The IBD 85-85 index fell .4%, as this leading index failed to keep up with the indexes for the second day in a row. Leading stocks are getting hit hard and are not holding up like they were since March.
Nasty Selloff On Higher Volume Gives All Indexes A Clear Distribution Day; Time To Raise Cash, Cut Laggards, And Hold Off On New Buys
July 24, 2007 | Leave a Comment
Today was not a good day but by no means does it look like the sky is about to fall. I have a lot of charts still looking very strong. Saying that I am cutting my laggards and taking some profits across the board in case things do get worse. I have no problem switching sides, as you can see that I have been posting short recommendations constantly the past month plus. Those shorts are really making some big gains and are obviously doing much better than recent longs. That is as clear as sign as any that this market is getting weak on the short term. The expanding new lows on every rally in the index was the tip off. Today there were 561 new 52-week lows to 139 new 52-week highs. Better safe than sorry. Nobody EVER went broke cutting losses short and taking profits when the market started to look weak.
Of course, with all these warnings, we always get reminded how fearful it can get. And today the panic was quite high with the put/call ratio closing at 1.16. This is extremely high and at levels not seen since Feb/March. Also at a very extreme level was the decliners to advancers by a 5-to-1 margin on the Nasdaq and by an incredible outrageous 9-to-1 on the NYSE. This seems a bit extreme and I find it hard to believe that it can get horribly worse from here in the short term.
Inside Day (Technical Term) Leaves Little To Be Discussed; M&A’s And Buyouts Continue At Incredible Pace
July 23, 2007 | Leave a Comment
Basically there is not much you can say at all today if you are a serious market speculator. The indexes all put in an inside day which pretty much makes today’s action meaningless. If you do not know what an inside day is, it is when the price action of today, for instance, is all done within the daily highs and lows of Friday’s action. The only thing that was obvious about the market today is that the appetite for M&A’s and buyouts continue.
Oil driller Transocean and GlobalSantaFe joined forces. The combined company will have an enterprise value of $53 billion, and shareholders will receive cash totaling $15 billion. Another deal had Cerberus, a private-equity firm, setting plans to acquire United Rentals for $2.83 billion, and Barclays has raised its bid for ABN Amro to more than $93 billion. Arrow International agreed to be bought by Teleflex for $2 billion, and ev3 and FoxHollow will merge in a $780 million transaction.
TASR beat but was sent back after the opening bell as the stock has obviously been pricing in the good news for quite a while now. I heard traders all day ask why TASR went down after the good numbers. LOL. There is only one way to be that ignorant-and that is if you have never bothered to even try to learn a little bit about TA. The fact that the stock has been rallying into this earnings date for months and sold off today should be obvious that the smart money bought the stock into the numbers and someone sold a lot of their long on top of the dumb money retail crowd.
Nasty Selloff Hits Stocks Thanks To Misses By GOOG And CAT; Overall, There Is Not That Much Damage
July 21, 2007 | Leave a Comment
Some big misses by two heavyweights weighed heavily on the indexes as the stock market suffered its second distribution day in as many days. GOOG and CAT were both nailed with 8% losses before the opening bell, after both issued poor earnings that missed estimates. However, as the day wore on neither of these issues saw much more selling and both found solid support at their 50 day moving averages, giving some comfort to the bulls. But, for the day, the damage was done.
The DJIA fell 1.1%, the SP 500, Nassy, and NYSE fell 1.2%, and the SP 600 led the way down with a 1.7% loss. The great news was that leading stocks, in the form of the IBD 100 only lost 1.3%, outperforming the SP 600. However, the losses were a bit worse during the day, so the fact that the indexes closed off the lows is a slight positive. Combine that with Wednesday’s action where the Nassy actually closed higher than the open and you can see we have two distro days that aren’t very powerful.
The higher volume in the market combined with breadth 3-to-1 negative on the NYSE, 11-to-4 negative on the Nassy, and 27-to-3 negative on the DJIA gave the impression that things were really bad out there. However, despite there being 326 new lows there were also 216 new highs which shows that there were some decent pockets of strength out there. If today was really as bad as the indexes looked, trust me, there would have been a lot less new highs. So that gives some indication that the selling was not that bad.
Nasty Selloff Hits Stocks Thanks To Misses By GOOG And CAT; Overall, There Is Not That Much Damage
July 21, 2007 | Leave a Comment
Some big misses by two heavyweights weighed heavily on the indexes as the stock market suffered its second distribution day in as many days. GOOG and CAT were both nailed with 8% losses before the opening bell, after both issued poor earnings that missed estimates. However, as the day wore on neither of these issues saw much more selling and both found solid support at their 50 day moving averages, giving some comfort to the bulls. But, for the day, the damage was done. Read more
Another Day Of Impressive Gains Ends With A GOOG Selloff After-hours
July 20, 2007 | Leave a Comment
It was another day of impressive gains for the market as leading, tech, and small cap stocks led the way higher. The IBD 100 was the top performing index today with the Nasdaq and SP 600 with a .8% gain. This outperformance continues to baffle market commentators as the battle between the bulls and the bears continues.
Even with all of these non-stop gains, there are still plenty of market pundits out there that are having no problem poo-pooing this market. The miss by GOOG last night is the perfect opportunity for the bears to try to sharpen their claws and sink some losses into this market. However, with the reaction GOOG had it completely looks like panic selling and more than likely this panic selling will find buyers rather quickly. Even if the buyers do not step in at these levels, GOOG has a strong enough uptrend that it is going to take more than one day of selling to reverse the favorable trend it is in.
Speaking of strong uptrends, my portfolio, for the second day in a row has absolutely nothing that is a complete sell. The funny thing about this is that besides about a core position of 60 stocks I am long another 190 stocks in small amounts. I am not just long any old stock. Every single stock I am long is moving up. And it keeps moving up and up and up. This gives me no chance to sell them and then put that cash into new and better buys. You need pullbacks to weed the weak stocks from the champs. When the market keeps going up like it is, there ends up being no profit taking signals and instead I keep compounding the amount of stocks I am long. The point of all of this is: I am long over 240 stocks and NONE are giving a sell signal. This is a bullish market and I am in ALL the right stocks.
Excellent Late-Day Reversal Sends Stocks Well Off Their Lows, With The Nasdaq Closing Above Its Open; Hard To Call Today A Distribution Day
July 18, 2007 | Leave a Comment
Today’s market action, overall, to me, was very positive. The action that I expected to play out did play out today off the bad earnings from GOOG and INTC last night. The selloff did last longer than I thought it would on an intraday basis but the eventual dip buying did show up, sending stocks well off their lows. Breadth still remained poor throughout the day and new lows beat new highs by an almost 3 to 1 margin which is a reading I have not seen since the start of the February selloff.
The market has gotten very choppy, which is what was expected on my end for the summer. The whacky action following breakouts is not bearish even though it is taking a while for certain stocks and indexes to follow through on their initial moves. The SOX is a good example of that as it gave back most of yesterday’s gains. However, the overall trend of that index looks like more gains are coming.
My portfolio had absolutely NO damage whatsoever today so I can not even begin to look at today’s action as the start of a trend reversal. I am going to have to see more evidence and more weakness in my personal holdings before I can even begin to feel the bears argument.
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