Stocks Continue To Rally In The Face Of The Bearish Sentiment, On Lower Volume; JUST FOLLOW THE TREND AND MAKE MONEY! There Are Good Stocks Out There
September 12, 2007 | Leave a Comment
There are two things I am noticing more and more as this market rises. 1: There are a TON of top callers calling tops in everything from this market to gold to CHL to AAPL. 2: There are a LOT of stocks that are either breaking out to new all-time highs and/or are setting up in very nice well formed bases.
All of this low volume has lulled many into a coma of thought and most people are declaring any chance of a rally dead. While this may turn out to be a low volume rally right into the hands of the bears as the market falls apart (btw, I will be shorting and making money if that happens anyways so why fight the trend), right now the trend is up and there are plenty of longs making money right now. Granted none of them are making anyone rich but most of them are either moving higher slowly or holding key support setting up for more gains.
This low volume rally could turn into a heavy volume rally, JUST LIKE LAST YEAR, and a lot of these low volume bases that are being created with the low volume in the market could turn out to be perfect bases for heavy volume explosions to the upside. There are already many stocks breaking out of these sound patterns. The only problem I can see is that there are very few perfect to near perfect charts that could be giving me a clear buy buy buy signal. Most are from nice to very pretty patterns which still means there are flaws within the base. The few bases that have been near perfect aren’t exploding either which shows that the low volume market is still having an effect.
A Day Full Of Extreme Moves Up And Down, Intraday, Ends With Stocks Mixed And Nearly Unchanged On Lower Volume
September 10, 2007 | Leave a Comment
Nothing happened today that changed the analysis of any of the indexes, after last week. The biggest feature of today’s trading definitely had to be the wild price moves in both directions. After the sellers unleashed their wrath in the morning, buyers stepped in from the retail side and bid stocks higher almost all the way into the close. However, in the last hour stocks paired back some of those gains which caused the indexes to close mixed. However, the bullish case was made for stocks as all the indexes held well off the morning lows.
Though this market has not bottomed, new longs are not breaking down and some are still holding on to some nice gains. But if some of our nice stocks start turning tail, we must not be ashamed to admit we are wrong here and cut losses. I seriously doubt some of our winners will turn around but you must remember ANYTHING CAN HAPPEN. Saying that, however, when you look at the chart of RIMM and see all that green all over it, or you look at BIDU moving ever so higher, or AAPL bouncing right off its 50 day moving average on strong volume and putting in its 3rd bullish intraday reversal, it does become hard to get too bearish here.
Especially considering how much bearishness I continue to hear out there. Every time I put on CNBC at the gym ALL I EVER hear about is the upcoming recession and/or the subprime damage that is going to spread to every corner of the market. Well, excuse me Mr. Contrarian but last time I checked when everyone was bearish I am supposed to be bullish. Even though I don’t have to be a RAVING MAD LUNATIC bull (Cramer), I still must respect the trend since August 16 and leading stocks and remain with my bullish bias.
Most Of The Major Market Indexes Fail Their 50 DMA’s And Reverse Down Through Their 200 DMA’s And Russell 2000 Fails At Death Cross; Volume Continues To Be Non-Existent
September 9, 2007 | Leave a Comment
A weak jobs report hit stocks early but after that there wasn’t much more selling. However, Friday was the third day in a row where we saw overall weak intraday or dead intraday price action but, once again, there was very little volume overall to the 50 day volume average which makes it hard to say that the sellers are in complete control at this area even though most major market indexes are making significant reversals and/or failures at key moving averages.
The fact that most indexes failed right at their 50 day moving averages and traded below their 200 day moving average shows that the market is suffering from some weakness and the fact that we had a second distribution day since the August 29 rally does have to throw caution on the rally. However, the leading stocks continue to hold well and stocks like AAPL that have seen three days of selling have really only seen one day of selling and then two days where the stock gapped lower and basically then traded in a tight range the rest of the day on big volume. To me that appears to be support to the selling that is happening in the morning.
Heck, if you just look at the indexes on Friday you can see that almost all of the selling happened before the market open. The fact that that was the case shows that the market makers just dropped the bids to find buyers. There was no real selling or capitulation by big investors as volume continues to constantly come in below the 50 day volume average. It doesn’t matter if it is on the upside or downside, there is still no volume that indicates the big institutions have done ANYTHING after August 16.
Meaningless And Boring Day On Lower Volume For The Indexes Ends With A Lot Of Individual Stocks Making Nice Moves
September 7, 2007 | Leave a Comment
Despite the inside day by the NYSE and near-inside day by the Nasdaq, there was some nice action underneath the market. There were 108 new 52-week highs compared to only 73 new 52-week lows and there were many stocks that either broke out of good or sloppy bases or are setting up in nice bases. This positive action was not noticeable on August 29th when the market confirmed the rally attempt but now the action in stocks is starting to shape up nicely. All of this despite the low volume.
My scans were pretty dry after the August 16 lows and subsequent follow-through. Granted, there were a few nice gems but besides that there wasn’t much out there that looked nice besides the leading big-cap tech stocks. However, now we have a lot of charts that are setting up nice bases and appear ready for breakouts sooner rather than later. The only problem with some of these charts is that a lot are making right sides of bases on low volume. That is the opposite of what you want to normally see. Higher volume on the right side is what you are supposed to see in strong stocks. A weekly chart of AIRM is the best example of what you want a weekly chart to look like.
The clearly two most exciting groups today were the semiconductors, with the SOX rallying .7%, and the gold group which saw a 6% jump with stocks involved in the Metals-Gold/Silver group. In fact, confirming the moves in those two groups, the Electronics-Semiconductor Manufacturing group has moved up from 107 to 27 the past three months. The Metals-Gold/Silver group has moved from 131 to 50 the past three months, also confirming the strength in this group. However, few stocks are showing up from the gold group so I am not too sure how long this groups strength will last. But if the action in stocks like MEAS is any indication, the Semiconductor stocks should be doing well, as long as this market continues to rally.
Stocks Post Losses On Higher Volume, Giving The Market A Distribution Day; Leading Stocks Rock Despite Selloff
September 6, 2007 | Leave a Comment
Today’s market action was just about the opposite of yesterday but still the action overall was not that bad. There were many leading stocks that performed very well today, I found four great longs (if they fail, watch out), and in my portfolio I had only one complete sell. That tells me that today was a lot stronger than what the indexes led us to believe. New highs also beat new lows, confirming the fact that underneath the market was stronger than what it looked like.
About the only troubling thing today was that volume was higher today than it has been on any trading day the past few weeks. However, volume is still well below the 50 day moving average so it is really hard to be either a hardcore bull or bear here. I firmly believe it continues to be smart to remain cash heavy with a bullish bias, due to the fact that we have a confirmed follow-through to the August 16 lows.
Even though this follow-through has been on very low volume, just like every uptrend, this market is giving us some select longs to put some money in. I see some traders sitting out on the sidelines. In my opinion, that is deadly! It is much better to follow your rules and take every long that sets up in a great buy position and then let it PROVE to you that it is wrong by hitting a cut loss area, than to just skip it and potentially missing a big winner. Right now, there a couple of clear potential big winners that some have missed out on by “taking time off.” It NEVER pays to not pay attention to the market.
Nasdaq 100 And The Philadelphia Semiconductor Index Lead The Market Higher On Another Low Volume Session
September 4, 2007 | Leave a Comment
Even though it was a very positive and bullish day for stocks, once again, we had a problem with volume. The impressive 1% to 1.5% gains in the indexes did not come with volume above the 50 day volume average, which signals that the big institutional investors continue to sit this rally out on the sidelines.
Now, this could be bad news-in the form of them coming out of the hole and slamming stocks with distribution-or this could end up forcing the big boys to come in and buy stocks up here in the fear that they might miss this rally. Whatever the final outcome is in the end, for now we have to respect that the market has given us a follow-through day and we must adhere to strict discipline and go long stocks that breakout of sound patterns and sport strong fundamentals.
With us wanting those kind of stocks, I can say that I am at least starting to finally see some nice chart patterns after a few strong up days. There are some solid bases being formed but the problem with most of these is that on weekly charts the volume to the upside remains very pathetic. You normally, obviously, want to see a lot of volume on the right side of the base and on the breakout.
Stocks Close The Week On A Bullish Note As Volume Is Below Average For The Ninth Day In-A-Row; Enjoy Your Labor Day Monday!!
September 3, 2007 | Leave a Comment
Once again, it looks like the Fed, this time with GWB, has come to save the day for the stock market, as stocks rallied on the good news that the Fed and GWB are on the path to help distressed home owners with rising mortgage payments that they can not make. While I am okay with helping out the poor homeowners, as long as he does not help out the stupid lenders that practiced this predatory lending, I will happy.
As it was, the markets ended the low-volume holiday spirited week with gains across the board, with the NYSE leading the way with a 1.5% gain. However, that gain came on lower volume, unlike the Nasdaq which saw volume rise, but breadth was 6-to-1 in favor of advancers over decliners. The best index for the week was the IBD 100, gaining 1.4%. So the appetite of the buyers was very healthy, even though NONE of those buyers were “the smart” money. If they were, you would have seen volume over the 50 day volume average. As it was it was just another retail driven pre-holiday rally.
It was, however, despite the low volume, a very important week, with Wednesday signaling a follow-through day to the attempted rally that started on August 16. Even though the rally attempt came on day 10, the volume was well below the 50 day volume average, and there were almost zero stocks with top fundamentals and great chart patterns breaking out of fresh and well formed bases. Overall, we can confidently say that this follow-through was very weak and was very uneventful. That is what normally happens when you get one of these low volume follow-through days before a long holiday weekend in the summer.
