Platinum Package Price to Rise at BWT.com
February 20, 2008 | Leave a Comment
Aloha,
Big Wave Trading will be raising the price of our Platinum service. Active member will not see the price increase unless you cancel your membership and rejoin.
Price Change Details:
Effective: March 1, 2008
Yearly: $1,250.00 USD
Monthly: $125.00 USD
Weekly platinum package pricing will remain the same for the time being. The daily platinum package will be eliminated and replaced with a gold daily package. If you have any questions please do not hesitate to contact Market Speculator or Justin DeMerchant.
Another Gap Higher At The Open Leads To Another Bearish Intraday Selloff, On Lower Volume; This Is How Stock Market Indexes Act In Bearish Market Environments
February 19, 2008 | 2 Comments
Today was a classic example of what happens in all bearish markets. In markets characteristic of bear markets you will see a lot of days where the futures will rally overnight which then in turn gaps the major market indexes higher the next day. That gap higher serves as a euphoric moment that has amateurs believing that the market is about to rally without them and there is one thing “all” investors hate to do. And that is miss the bottom. For some odd reason, amateurs are OBSESSED with this game of bottom ticking the lows and being the genius who nailed the bottom. A foolish way to trade stocks and an easy way to get you trapped in longs like those that bought stocks at the open today.
This is like the sixth time in the past seven gap higher sessions that the market has spent the rest of the day selling off, after such strong gains overnight. There would be nothing wrong with this if this was happening within a longer term uptrend that had stocks rising on higher volume and then falling on lower volume. Too bad that is not what we have here. Since the November top, stocks have sold off on strong volume with the rally from the 1/22 lows coming on lower volume than the volume on the selloff. The bottom itself was on strong volume but nothing like you see on real bottoms. Since then the follow-through days have led to anything but a follow-through rally.
The Big List
February 18, 2008 | 3 Comments
Before I list these books, I have to tell everyone that I have read many stock market books. There may be some current books that are great too, but these are the ones that definitely helped change my trading life.
I can’t remember anymore, but I think when I was 18 I was in a major automobile accident and had a very serious injury happen to me. It ended my collegiate sports career but helped start a lucrative stock market career.
During my time spent in the hospital and at home (home hospital) during the year it took me to fully recover, I purchased over 100 books. Out of those 100 books, I still own all of them. Sadly, if someone could have told me that about 90 of them were pure junk and couldn’t help me make money consistently, I would not have bought any of them and would have used the money to invest/trade. Therefore, I would buy just what I list here. I have a bookshelf of books I will never EVER read again, but along with those are these gems that are invaluable; and I have read them many times over.
Stocks Sell Off And Then Come Back Before The Closing Bell Ending Mixed On An Overall Very Dull Friday; Enjoy Your Long Weekend
February 16, 2008 | 9 Comments
Stocks started the day pretty much where they ended on Thursday but shortly after the open Ben Bernanke (the most CLUELESS fed head ever) talked more about the economic weakness, citing the troubled housing and job markets, ailing bond insurers and a broader credit crunch. This helped stocks erase all of the gains produced by the follow-through day (FTD) in just one and a half sessions. This is not how great rallies start.
However, after taking out the gains of the FTD for good, stock indexes found a floor and rallied the rest of the day with the SP 500 turning green and closing at the HOD. The turn was bullish intraday but if you look on your daily charts you can see that today’s trading range was not that large and the turn wasn’t as bullish as the very short term intraday charts make it look. Volume was also just 5% higher on the NYSE while 11% lower on the Nasdaq showing that the intraday turn did not have a lot of conviction behind it. Thus it remained just another one of those bear market bounces. I like these at it ensures the market doesn’t get too oversold too fast.
Today’s intraday selloff also proved that those that were too quick to think that the FTD was the real deal that they need to be patient and let this market play out a bit more before calling for an ultimate bottom. The longer this selloff last, the better the longs are going to do (since they will build longer and stronger bases) when they do complete and breakout of their next base. Right now, without any nice looking charts out there, because of the massive selloff on heavy volume from the November top, it is going to take a long time for them to setup. The fact that I can’t find much out there in terms of stocks building solid bases means that we probably have a while to go in this pullback. This is not a bad, this is a good thing. It would not be healthy to rally here without new leaders.
Nasty Day Reverses All The Hard Work Put In By Yesterday’s Bulls; Cocky Bottom Callers Are About To Learn A Lesson From The Markets
February 14, 2008 | 7 Comments
I don’t know about you but yesterday’s so-called FTD (follow-through day will from now on be referred to by this acronym) seemed beyond the realm of pathetic as volume only increased by 1% over the day before. Well today the pathetic bounce was hit by something even more bearish than yesterday’s gains: a bearish engulfing candlestick bar on higher volume. Today, however, the volume was 3% higher than the day before.
For those of you do not know what an engulfing day is, it is a day when the stock market index opens higher than the previous day’s close and then closes lower than yesterday’s open. The Nasdaq, the SP 600, and the SP 500 all did this. The DJIA and NYSE barely missed doing this by a few ticks each. This is bearish as this candlestick pattern has a very high success rate of confirming changes in the short term trend. So for all of those people who were bullish after yesterday’s action, you now have an even bigger reason to continue to be bearish, even though we are still holding above the January lows.
Despite us holding on to those gains, we have only seen two powerful days, since the lows of 1/22 and 1/23. Both of these big up days on higher volume have been reversed almost instantly which is not the way markets act when they are bullish. They simply don’t do that. Another way the market never acts during a bull market is all of these weak closes. Besides yesterday, we have not even come close to closing near the HOD this month and we are half way through it. Bullish markets do not act like this.
Powerful Rally Comes With Volume Well Below The 50 Day Volume Average; Today, There Was Zero Institutional Sponsorship Behind This Bear-Market Rally
February 13, 2008 | 10 Comments
But despite that zero sponsorship in the form of an extremely weak 1% jump in volume over yesterday’s levels on the Nasdaq, the Nasdaq technically did follow-through. With that, unless you want to suffer a potential large amount of pain, you must cut your losses in all shorts that are not working and/or cut back on those not working out. If you are not making money right now, on your shorts, you probably need to go about trimming some down just in case this rally last EVEN LONGER than what it appeared it would.
This market seemed out of life the past few days as it was impossible for the market to hold the gains as it sold off into the close once again. The only difference in these weak late-day selloff is that there was always a bounce. And with those bounces all coming on lower volume, it just seemed silly to think there was much more rally left in the market. Especially, with a lot of market pundits now getting very adamant about the bottom being in. That is fine if you are talking about a short term bottom but if you are talking about a real long term bottom you simply do not understand the market.
This market was in a FULL RALLY MODE without almost ever suffering a pullback of 20% (the DJIA didn’t even fall 10% until 2007) for five years. During those five years I latched on to many great longs that produced some very large gains. Those winners all looked the same with the price/volume/BOP all being a certain way. Now that we have had a severe selloff, a lot of people are looking to buy the bargains. But how anyone in their right mind can think we are going to have a REAL HARDCORE bottom after only three months of correcting FIVE YEARS OF PRICE GAINS is beyond me. You simply can not fix the damage done to the charts on such strong volume in only three months.
Buffett And The Mortgage Lenders Try To Stop The Inevitable Stock Market Correction; It Is Crap Like That That Will Ensure A Longer Bear Market
February 12, 2008 | 4 Comments
Stocks started off the day in a very bullish manner as all the indexes climbed early on, looking like they were on their way to putting in a follow-through day. However, proving that you should never get too crazy with intraday trends, the stock market reversed off the highs around 3pm and sold off into the closing bell before a minor bounce saved the day from being a total train wreck.
The reversal has to be taken as a bearish event, since volume picked up and the Nasdaq took a 1.3% gain and turned it into a small loss. In bullish tapes, stock indexes do not give up the early gains this easily this often. Yet since this bounce has started, besides a couple of days, stocks have continue to close weak closing up the day. This is happening after two straight up days on lower volume which clearly shows that mutual funds have no interest in heavily accumulating shares in this tough market. Therefore, this is still nothing more than a bounce, UNTIL THE MARKET PROVES THAT IT IS SOMETHING MORE. Don’t hold your breath.
The leading stocks of the past five years in the big-cap tech sector and in the chemical sector showed some bearish action at key resistance on the charts. The reversal at or on the 50 and 200 day moving averages by so many leading stocks should act as very tough resistance in the stock market as the leading stocks should start to weigh down the index, now that the other big caps like MSFT INTC are selling off on higher volume too. When you have the leading stocks based on % gains and the biggest stocks breaking down, rallying on lower volume since the bounce started on 1/22, and now failing near key resistance on higher volume, you do not have a healthy market. You have a very sick market where few stocks can survive.
A Lower Volume Rally Helps Stocks Close Slightly Higher, Masking Some Of The Huge Gains Made In Energy/Metal Related Issues
February 11, 2008 | Leave a Comment
There was no doubt that today was a very positive day as the market rode its way higher all day, until the end of the day when the Nasdaq started to weaken but then firmed up by the close. The gains seemed pretty darn good but once you start to look at the internals you can see that it was not that good at all.
There were around 50 new highs on the Nassy and NYSE compared to 160 new 52-week lows, breadth was poor with most of the market held up by a few select past leaders, and volume was lower on both the NYSE and Nasdaq showing that institutional quality funds have no quality purchasing stocks here.
However, there were some stocks that not only produced some good gains-they produced some excellent gains. Stocks in the Energy-Solar, Machinery-Farms, Steel-Producers, Oil&Gas-US Exploration Producers, and Ag Operations group just rocketed today with all of these industries gaining at least 2.6% with the Solars pumping out a 4.6% gain. Simply stunning and something a lot of players were not expecting. But there was one overall bearish trader that was expecting some bullish gains. Me.
After A Rough Week For Stocks, Bottom Callers Remind Us How Stupid We Must Be; Stocks End Mixed On Lower Volume
February 9, 2008 | 8 Comments
What appeared to be a strong start on Friday turned out to be a big disappointment for the perpetual-bottom callers as stocks closed mixed with volume falling across the board ahead of the weekend. The dull action had to be a bit of a disappointment for all of the people who have been emailing me the past month telling me how stupid all of us trend followers are. Add to that list the crew of Cramer and Marcin and you have a ton of people that have a lot riding on this being the lows.
The best part about all of that is that no matter how wrong I ever am the great thing about this methodology is that we cut our losses when we are wrong. When you go long stocks that move up and go short stocks that move down, it is easy to know when you are wrong. That is whenever you lose money. If you lose money, you are wrong. However, in the world of value, as you lose money, it is supposedly (if you have done your “research”) a better buy. So while it is great that your stock rises, it is “almost” (I am being a bit over the top but you should be able to understand that) better that a stock fall as you can now buy it at a cheaper price.
My biggest problem with this is that what happens once you get in a stock like Enron, Refco, Worldcom, Adelphia, or any other stock that has gone to zero? They tell you that you are supposed to only buy real quality stocks. OK, so let’s go back to 2000 when a TON of values were created by EBAY YHOO CSCO ORCL DELL INTC JDSU QCOM. Do a me a favor and go back and check out how well those stocks have done since the 2000 highs. And make sure you use the highs. Because, just like RIGHT NOW, they were bullish and great values IMMEDIATELY when they started to selloff. So it isn’t like they called them values after a 50% fall. They were values the whole way down. Just like our past leaders will be.
Strong Day On Higher Volume Hints To A Bounce But A Weak Close On The Nasdaq Suggest It Could Already Be Over
February 7, 2008 | 7 Comments
I went on a very wonderful, beautiful, and incredible whale watch today as a few of my girlfriend’s friends flew in to visit Maui. And before I go on to talking about the market I want to set the tone by saying I did not see almost ANY of today’s intraday action so I am not sure how it felt but from what I can see it seems like today made a lot of people bullish yet today’s gains didn’t even come with any “oomph” or with a close at HOD. So without these strong moves and HOD closes it seems hard to believe that what we have here is anything more than a bear market bounce.
What makes the bounce even a bit more compelling is because that it is coming with the stock holding above the lows of the most recent downtrend but the charts look worse and not better from those lows to now. Even after going over my shorts tonight, my first reaction and thought was to be ready to cut a lot out. After the first two holdings that were up too much (ORLY CNMD), I found absolutely nothing else that needed to be dumped. And that includes all of the shorts that I took this morning. Even if the market rallies the shorts this morning were not that big so it really isn’t going to change much. But if the bounce does last more than a couple of days, I am guaranteeing you that I will feel the squeeze pain. But that pain is to be expected as stocks can not go straight down. And anyways I have taken some profits to protect against that and see a rally, if it is on low volume, as an opportunity to short more of the big-cap former leaders that everyone in every office wants to buy now.
Everywhere I go, if people start to talking about the market, they ask me if it is good to buy GOOG and AAPL here. It is amazing that someone asked me about buying GOOG and AAPL today and didn’t even say anything about the possibility of them falling more than they already have. To this individual they were sure the dip was a perfect place to buy and if it goes lower then he is going to buy more. Now that people that have no interest in the market are interested in a stock that I went long back in 2004 is a clear sign that it is over. Therefore, do not fall for the Cramer line of “everybody is so wrong.” The facts are that even if we are wrong now, there is nothing out there with patterns like the longs that I like to go long that have always produced huge gains for me. It isn’t like I just started trading yesterday. I have seen a ton of charts. And I have seen a lot of different market conditions. Things never change. Only the players and the securities.
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Recent Posts
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- Stocks Resume Selloff As Distribution Day Rattles Investors Who Bought Last Weeks LAME Rally
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