Stocks End The Week Pretty Much Where They Started, While Our Emotions Went From Christmas-Joy And Happiness To Tragic Sadness Within Two Days
December 28, 2007 | Leave a Comment
It was another low volume Christmas holiday week. One that happens ever year and this one, like the last, was no different with the bullish sentiment throughout the week. However, the only real action came on a day when the market fell on higher volume giving all the indexes a distribution day. Basically, we had the same situation happen this week as has been happening all year: the market rallies on lower volume, sells off on clear heavy distribution, but then somehow rallies again on lower volume.
It is a very odd pattern but it is the pattern we have to continue to deal with until this market finally decides to give it up. Which every day seems more and more likely as I continue to see stock after stock priced over $70 put in lower and lower highs. Eventually this will translate to lower and lower lows and the way a lot of high priced stocks are looking my faith that this market rallies from here is very low. To me it seems like it is inevitable that we are going lower. If I am wrong, heck, you all know me by now. I will wait till the best charts setup and breakout and I will go long. But a lot of you like predictions so I am predicting that this doesn’t end well in the intermediate term.
As each day goes by the news seems to get worse and worse, yet according to my indicators the crowd that actually puts money to work in the market are not bearish at all. The put/call fell to below 1.00 again to .88, the investors intelligence survey still shows bulls over 50% at 54.9% and bears below 25% at 23.1%, and the VIX is at 20.74 which as anyone who lived through the early 2000 period will tell you is a joke. So this is bearish? I don’t think so. To go along with that I see this NYSE short-interest ratio breaking out to all-time highs of 9.86–it would take ten days to cover all the shorts at the current volume–which indicates that if this market starts moving up they will be forced to cover which would send stocks higher. But maybe it can be bearish as the smart money is shorting the heck out of stocks. If that is the case and the NYSE short-interest is the smart money, this market is going to get real ugly.
Stocks Selloff On Massive Tragedy In Pakistan As Benazir Bhutto Is Brutally Assassinated In A Major Blow Towards Democracy; Volume Remains Very Low On This Holiday Squeezed Week
December 27, 2007 | Leave a Comment
I don’t know about you but I spent the day watching various new coverages (Fox News mostly) on the Bhutto assassination and the stock market was the last thing I thought about today. That was, at least, until the final hour when stocks started to selloff in a very strong mini-collapse in the final hour. They say the last hour of the day is the time when institutions make their biggest trades. If that was the case, this time, then they sure weren’t buying anything and were selling everything.
The comfort amongst the selling was the fact that volume was so much lower compared to the 50 day volume average on the NYSE and the Nasdaq. But volume did pick up from the day before which gave the market another distribution day making it the fourth one for the Nasdaq since the November 28th follow-through. The NYSE, SP 500 and DJIA all have three since then. So the market appears to be under some pressure after just a little bit of selling once again. This is one unfriendly market and I simply find it almost IMPOSSIBLE to believe there will be a long-term rally from here.
Fortunately, I have learned to realize that when I feel a certain way I am usually wrong and it either marks a top or a low. But this time I have some technicals on my side and we must not forget I have been in sync with the market since 1999 and have NOT missed a SINGLE TURN during a top or bottom. I left NYC “KNOWING” that we were putting in a real top and I still believe we are going to do the same thing now. But if I am wrong, all I ask is that I get max green BOP filled charts that act like my past big winners have acted. If that happens I don’t give a damn about being wrong. As long as I am making money, how can I be wrong?
Stocks Continue The Santa Rally With A Day Of Mild Gains On Very Light Post-Christmas Volume
December 27, 2007 | Leave a Comment
There isn’t much to say about today’s market either than the axiom “never short a dull market.” This little saying is proving itself as the low volume Santa Claus rally continues to line traders pockets with money that they are hopefully spending on others this wonderful holiday season.
On that note, I want to thank AuthorEgo (J. W.) for sending me a gift this Christmas. The movie “Wall Street.” I have never seen this movie, oddly enough, during my entire trading career. It was a wonderful gift that I was very excited to get. Kellie (my gf) and I watched the movie the next day and I must say I enjoyed it very much and it made me very happy that I live over 6000 miles away from NYC. At least I believe it is that far. I am not sure.
But the one think that I came away with from the movie is that “greed is good [only if it will be used for good later on].” If your motive is to make money at the cost of anything, then may God have mercy on your soul. If you don’t believe in God, then I just hope karma doesn’t come around to bite you in the place the good Lord split you. The bottom line is do unto others as you would have them do unto you; the golden rule.
MELE KALIKIMAKA
December 25, 2007 | Leave a Comment
MELE KALIKIMAKA from everyone at bigwavetrading.com! Thank you for being a part of this great team!!! Aloha!
I Told You Santa Claus Was Coming To Town; Big Gains On Much Higher Volume Put Stock Indexes Back In A Confirmed Rally
December 22, 2007 | 2 Comments
If there was any way you want a week to end, if you are a bull, this week was it, as the whole market closed higher on much higher volume thanks to options expiration. Santa Claus definitely came to town and wall street was very happy he decided to drop by the exchanges.
There were two ends of impressive action. The first being that the stocks that we want to see rally (small caps and tech stocks) did with the SP 600 and Russell 2000 up 2.35% and 2.37% respectively and the Nasdaq and Nasdaq 100 up 1.95% and 2.03% respectively. This kind of strong action is made even better because the Nasdaq, SP 600, Russell 2000, and all the big cap indexes tested their November lows and passed the test. Now all the indexes have reclaimed an important moving average, minus the SP 600, making this move ever the more important.
What was even more impressive about the rally is that the volume on the DJIA and SP 500 exploded over 50% above average and Nasdaq volume was 25% higher. That volume was definitely heavier due to options expiration but it seems to me that if this was strictly options expiration we would not have been up over 2% on some index. I know we did gap up and put in most of the gains in the morning. But even after that the Nasdaq and SP 600 clearly trended higher into the close showing that there was something more there than options expiration. However, how we act in the next few weeks will obviously show us if today was a day for the bulls or a day marked up to cause the most pain in the options market. No matter what though, if we lived under a rock and never heard of a CNBC but only knew the CANSLIM system, today was an accumulation day and a powerful one at that.
December 20th
December 21, 2007 | Leave a Comment
[2007-12-20 00:11:21] [MauiTrader’s Lounge] MauiTrader : really?
[2007-12-20 00:11:24] [MauiTrader’s Lounge] MauiTrader : where did they go?
[2007-12-20 00:11:31] [MauiTrader’s Lounge] MauiTrader : by not saving them off the computers you used to won?
[2007-12-20 00:11:32] [MauiTrader’s Lounge] MauiTrader : own?
[2007-12-20 00:24:34] [MauiTrader’s Lounge] MauiTrader : welcome back 
[2007-12-20 00:24:39] [MauiTrader’s Lounge] yoni : no, I had them in this ‘encrypted’ folder and the software that decrypts/encrypts crashed…
[2007-12-20 00:24:44] [MauiTrader’s Lounge] yoni : and lots of the files in there dissappeared
[2007-12-20 00:24:46] [MauiTrader’s Lounge] yoni : =(
[2007-12-20 00:24:47] [MauiTrader’s Lounge] yoni : thanks
[2007-12-20 00:24:49] [MauiTrader’s Lounge] yoni : lol
[2007-12-20 00:25:23] [MauiTrader’s Lounge] yoni : I disconnected due to a thunderstorm
[2007-12-20 00:25:37] [MauiTrader’s Lounge] yoni : on top of that I forgot to bring in my recently washed clothes
[2007-12-20 00:25:52] [MauiTrader’s Lounge] yoni : so they were pulvarized by hail
[2007-12-20 00:27:49] [MauiTrader’s Lounge] yoni : I got the impression that the fund I may be working for is going to suffer soon
[2007-12-20 00:27:55] [MauiTrader’s Lounge] yoni : I dont know too much, so cant be sure
[2007-12-20 00:28:08] [MauiTrader’s Lounge] yoni : but the whole calls into 08 09 on certain stocks…
Santa Claus Rally Come Right On Schedule; If You Would Just Focus On Your Charts You Would Be Making Money–Don’t Listen To Ben Or CNBC
December 21, 2007 | Leave a Comment
It is the Christmas Holiday season and everyone is rushing around trying to finish up the last minute shopping. Luckily, I have gotten most cards and gifts mailed out to the mainland. However, there are still some things to wrap up here on Maui so I am going to write a nice commentary for the weekend and will probably avoid updating this section unless something amazing happens. You need to still check in because I might add something here and there. But for the sake of my girlfriend I think I need to spend more time with her this Christmas. I have been working on the computer too much and think it is wise to spend more time with the little family that I have on the islands.
So hopefully you all understand and don’t hate me too much. But like I have been saying, and the volume is proving, most traders are already taking the sessions off. And as soon as I warned you all to not short a dull market we get a very nice dull market rally with the IBD 100 up 1.6% and the Nasdaq up 1.5%. This is the exact rally that I was warning all of you extended shorts about.
Very Tight Trading Range On Lower Volume Hints That Traders Might Be Starting Christmas Early; Never Short A Dull Market
December 19, 2007 | Leave a Comment
Stocks traded in a pretty erratic and tight range today, compared to the recent volatility that we have had in the market that yet has not showed up in the VIX as it fell once again much harder than the market to the 21.30 level. Despite the lack of volatility, some more speculative indexes are outperforming on the short term with the Russell 2000 up .27% today and the SP 600 up .16%. That combined with the IBD 85-85 index rallying .6% shows that leading and small cap stocks (which are usually more momentum/speculative type stocks) are making an end of the year Santa Claus rally looking ever more sure of happening. Especially with the last two days showing bullish intraday reversals in the indexes.
The one thing that has me feeling that the Santa Claus rally could be starting is that last night there were a few really great long setups and basically most worked extremely well with the best one performing the best. That is how it used to be until after April 2007. It has been a long time since near-perfect to perfect charts have worked with regularity. But so far the last three are working and all three show me gains. That along with the rest of the recent longs acting alright is a sign that the market is either ready to rally a little or I am just in the completely right stocks that are going to rally while the market falls.
A Bullish Intraday Reversal Send Stocks From Their Lows To A Close Near The HOD On Higher Volume; Oversold Market Has A Hint Of Fear About It
December 18, 2007 | Leave a Comment
The stock market produced a bit of different action today that has been the opposite of the norm the past couple of weeks. Since December 6th we have had a market where we have basically opened higher and then spent most of the day selling off. However, today we had a bit of a change with the market opening higher, selling off–like usual–but, instead, this time, the market found a solid bottom, across the board, around noon EST and rallied the rest of the day, almost closing at the HOD but pulling back a bit at the end.
Not only did the market have a nice day intraday, it also put in the solid gains on higher volume. This was very nice action and was the first time since December 5th that stocks put in a strong rally, closing near the HOD, on higher volume. Most gains have either had weaker closes when the volume was higher or the stock had a weak intraday rally (usually after gapping down like 12/3 on the Nasdaq) with lower volume. Today’s action had a slightly different feel to it which makes it possible that we could see a short-term rally here.
My thesis on that is that I had only one full sell, only three stocks that I had to cut some of my loss or take some of the gains, the Russell 2000 and SP 600 outperformed the market with a 2% and 1.6% gains respectively, I had four CANSLIM quality stocks give buy signals and two CANSLIM longs I am currently long do so also, the put/call ratio has been over 1.00 for three straight days, the market is moving toward oversold areas on many oscillators, and the Nasdaq is bouncing right off its 50 day moving average.
Mixed Volume Selling Hits All Indexes Hard As Bids Disappear; A Lot Of Nasty Selloffs Start On Lower Volume
December 17, 2007 | Leave a Comment
Today was nothing new under the sky as the market continued its overall trend of going down with the Nasdaq 100 falling 2.5%. The heavy selling amongst the big caps indicates that there is very few safe spots and the once popular big-cap tech stocks are now no longer safe as the markets selloff appears to be spreading to almost every sector including oil.
The selling appears, at first, to be not that bad as you see volume below the 50 day volume average. But the fact that volume was higher on the NYSE than the day before, and according to IBD the Nasdaq also (on my charts volume appears lower), indicates that the few funds operating right now are distributing stocks. This made it the third day and second day for the Nasdaq and NYSE respectively since the November 28th follow-through from the IBD indexes.
I see and hear a lot of investors that want to buy stocks down here to grab a “bargain” and get something at a “discount” with a “great” dividend. All I have to tell these people is that this is a horrible idea as every stock’s chart amongst the better performing stocks the past five years look horrible and broken. Even though some of this is on low volume like the major market indexes right now, I think some people forget that a lot of big selloff start with low volume.
