Another Wild Intraday Session Ends With Not Much Happening By The EOD; Cash Is Still King In This Low Volume Market
March 31, 2008 | 23 Comments
It is hard to continuously say the same thing over and over but it is true. There is nothing to do in this market other than to keep your trades small and your cash high. Especially, if you are a perma-bull as we are now finishing the month down for the fifth time in-a-row. This is much different from anything we saw from 2003 to November 2007.
I know a few traders that for some ungodly reason were bullish after today’s close. This was because they said the Fed has a new way of making sure the market has bottomed. Once again, the same market call but this time from different players with a different excuse. No matter how many people try this argument with me and no matter for what reason it is, I simply will not believe it until it is true. When I see the market making strong gains on strong volume with top stocks breaking out and moving higher (heck there doesn’t even have to be heavy volume on the indexes; I just need some HOT freaking charts, for God’s sake), then I will wrap my arms around this market just like the perma-bulls have been the entire way down.
The right thing to keep on doing is raising cash with stocks that we are cutting our losses on or taking profits on and to keep the new buys or shorts small until a trend is clear. Right now, the market has no clear trend as a low volume trading environment has now entered the stock market which could help build some nice bases. However, nothing is hinting at that what-so-ever as few NEW and FRESH stocks are forming bases after a previous uptrend in innovative companies with great fundamentals.
GOOD MORNING TO ME! Cramer Says Most Missed SGP. Then Why Was I Short From 1/14/2008…
March 31, 2008 | Leave a Comment
….for a now 42% gain in a little over two months? I will tell you why…THE CHART!!!
For those that are RealMoney subscribers and read my columns on Monday, Wednesday, and Friday, you were not surprised by this as I have shown you before by being long IMA for a 100% gain and then getting you out of IMA before swooning 50%.
During that time Cramer was telling you to buy.
Now we have my column from 2/1/2008 (please re-read this column, if you have time):
Schering-Plough (SGP - commentary - Cramer’s Take) broke down on very strong volume back in October, and since then, it has been nothing but hard selling. On Jan. 11, SGP failed right at the 50-day moving average, and shortly after was breaking down on huge distribution. If the trend is your friend, then this stock is your enemy.
So tonight when you hear Cramer say that EVERYONE missed it. Remember, just like IMA, when he was telling you to buy, I was telling you to short.
Stocks Poised for a Positive Close
March 31, 2008 | Leave a Comment
Stocks are acting like they have support going into the quarters end. The real issue here is with volume. As of 11:35 volume appears to be lower than the run rate on Friday. Not much support for the bulls here, institutional buyers are simply not stepping up to the plate to support this market.
If we continue to move higher and on continued lower volume it will spell trouble for the market. The lack of accumulation is not astounding nor is it surprising to me. This was and still is a classic bull market bounce. No volume and clearly driven by oversold, short covering conditions.
Tomorrow’s session should be more indicative of the action going forward. Lack of volume the past week of action is indicating to me that more selling is just over the horizon.
Stocks Reverse Hard Selling Off All Session Into The Close, Closing Near The LOD; Lower Volume Eases Selling Pressure But Some Leaders Selloff On Higher Volume
March 29, 2008 | 2 Comments
The morning got off to a good start as the indexes gapped higher and started off strong right out of the gate, with the Nasdaq leading the way higher with a 1% gain. After that, sadly for the bulls, it was nothing but a slightly choppy ride lower with the market selling off the entire way lower with the 1% gain in the Nassy turning into a .9% loss by the EOD. The DJIA closed near the session lows for the second straight session. This was not a bullish session, to say the least.
Despite the losses, there was one bit of good news that can be taken away from this session and that is that volume was lower across the board. In fact, Friday’s volume was the lowest turnover of 2008 and shows that institutional investors who make up over 75% of the volume in the stock market were not active at all. Still, you can’t get too excited about low volume pullbacks when they come after low volume rallies.
We did have one heavy volume rally on 3/20 when the DJIA had its follow-through day. However, since then we have been left with nothing but low volume volatile-intraday sessions that have left us at the same point we were at right before the two bullish days on 1/22 and 1/23. This is not good as it is not normal to see a market have a FTD and then not put out any big winners that are working right away or have any follow-through days to the follow-through day.
Another Boring Day Ends With Stocks Pulling Back On Lower Volume; God Help Us All If Tomorrow Is As Slow
March 28, 2008 | 2 Comments
I had a lot of errands that I had to run tonight and the funny thing is that the most important one still is unfinished. And you know what, sometimes that is just the way it goes. I could have been upset that I did not get it done but instead I decided I would cash in my chips and wait for another day.
That right there is exactly how I see the stock market right now. This is a market that looked like it was going to deliver us something good and instead it ended up having a closed sign on it and now we can not get what we want. Many traders want to enter this store and take the merchandise out of it and play with it but the market is closed to CANSLIM investors and there is still nothing I really want in the store anyways.
If that did not make any sense, because I am too tired maybe this will. Tomorrow I am going to go driving around this island for surf. The chances are that nothing is going to be out there. But I am still going to bring a shortboard and longboard and PRAY that something exist out there. If I drive around and there is nothing out there, do you think I am going to paddle out into a lake of flatness? Or let’s say it doesn’t even hit my knees, do I then take my shortboard out? OF COURSE NOT. When there is nothing, there is nothing. Trying to surf waves that are NOT there is stupid and kooky. You want to look like a freaking schmuck? Paddle out into Waikiki waves with your shortboard. Let me know how the “vibe” is.
A Weak Open Lingers All Boring Day Long As Stocks Close Lower On Lower Volume; ORCL Disappoints AH
March 26, 2008 | 7 Comments
It was an extremely boring day on wall street today as a pair of really negative economic reports failed to get the bears to take advantage of the macro backdrop. Considering durable goods announced by the Consumer Department fell 1.7% in February, crude oil bounced $4.68 to $105.90, and new home sales were the lowest since 1995 there was plenty of reasons for the market to take the gains and hammer them into oblivion.
But that didn’t happen. The market did fall on the day but the early morning losses found some buyers and after one more turn near the final hour stocks closed with minor losses, with the DJIA and SP 500 leading the way lower with a .9% loss. The good news, though, is that leading stocks, via the IBD 100, rallied .2% on the day and the SP 600 only lost .4%. So there was some relative strength in the leaders and the small-caps which is always what you want to see in a rally.
Too bad another thing you like to see is volume. Since normally heavy volume is good for rallies, it can’t be that great that we constantly rally on lower volume. However, when those low volume rallies are followed by lower volume pullbacks it is possible that in the future we could have a market rotate into a market where heavier volume comes from the combined low volume pullbacks and rallies. This is what happened post July 2002 to the October 2002 bottom.
Another Day Of Strong Gains For The Nassy, SP 600, And Leading IBD Indexes Comes On Lower Volume As A Possible Disturbing Trend Emerges
March 25, 2008 | 8 Comments
It was another strong day of gains with the Nassy leading the way higher with a .6% gain. However, the best index of the day was the IBD 100. For the second day in-a-row, the IBD 100 outperformed the general market indexes. Today it was a solid 1.9% gain which was much better than the rest of the indexes and yesterday it was a 3.1% gain which was .1% better than the Nassy. So everything looks pretty good with leading stocks leading the way right? Well, yes and no.
Right now things do look good in some stocks. There is no doubt that I am starting to find a lot more charts that have a lot of strong accumulation, green BOP, and strong price action on them. However, the tight and sound base patterns are still not there. If this market has bottomed and it is going to start a big bull market, it is going to be a while before it gets moving, simply because the patterns are a little sloppy. Some are tight but a lot are not.
There are multiple reasons for this. Some include a volatile VIX, some include the fact that the market has sold off a ton and then had a snap back rally in many financial issues, this all has left the market jittery and very hard to make money in. It does appear that that is changing as I had an EXCELLENT day today, thanks to one stock, and I still have around 65% cash. Seeing gains that are pretty good in a market that you are loaded up with cash can make you feel pretty good. However, some still think that you have to be all-in here to receive all the spoils that this market wants to give us.
Stocks move higher without steam
March 25, 2008 | Leave a Comment
The collective yawn you hear is coming from today’s stock market. At 3:55pmEST volume looks to be lower by 10-15% across the board when compared to yesterday’s volume. This is definitely not the type of bullish action you would like to see in a confirmed market rally.
Mid-caps are leading the way along with the NYSE composite index. Boring markets are hard to guage, price action is bullish but with such a dry up in volume. It is hard to get any excitement out of today’s gains.
Where Did All The Volume Go?; Huge Rally With Weak Close And Low Volume Is Not Bullish For The Market Long-Term
March 24, 2008 | Leave a Comment
It was beyond a great day for the stock market, once again, for the second day in-a-row, as the Nasdaq led the way higher with a 3% gain that had many market participants jumping for joy. Too bad all that jumping for joy was not celebrated alongside large institutional investors who decided to stay away from the market today as I guess they did not want to be part of the short-covering rally. And with volume coming in well below the 50 day volume average you can be sure that that is exactly what we saw today. It was just your usual bull bounce in an overall bearish market environment.
That bounce was given credit due to JPM buying BSC for $10 a share instead of $2. This whole thing sounds crooked to me and I will just leave the action in BSC to that. But, this news was given credit, on top of some good existing-home sales data, for today’s gains. Well, you know what news would have been better with today’s 3% gain? NO NEWS. It is a huge rally on large volume that comes with no news and a lot of stocks breaking out that gets me more exciting than any other news headline I could possibly see. It almost gets me as excited as the bottom callers who call a constant bottom in this market, are wrong 5 times before they are right once, and then when they get a tiny bounce dance in the streets that all is well.
I forgot what it was like to be involved in a stock market where price action is so rough yet so many “traders” can’t stand still and keep trading their pants off like it was a rip-roaring bull market. But here I am in one again for the first time since 2000-2002. It is incredible how not even ten years can go by and yet we have still forgotten all the lessons we should have learned there. The bottoms callers today sound just like the bottom callers then. They are so sure this is a bottom that the put/call has fallen to .80.
Problematic Follow-Through Day Is Not All It Appears To Be; We Have Gone NOWHERE In Two Months, Proving Cash Is King!
March 21, 2008 | 13 Comments
A lot of people have recently just gotten used to being in cash as the bear market has finally convinced some that the best side is the sidelines. But as soon as a lot of these people realize it is best to park their cash, all of a sudden we have the market following-through on its rally that started eight days ago on 3/11. That is when the DJIA made its lows, reversing off of them and closing higher at the HOD by the EOD. While every index undercut those lows on 3/17, the DJIA did not and instead held. This has now led to today’s 2.16% rally on very strong volume. A weekly chart of the DJIA since 3/11 is very bullish. However, when we take a step back and look at where the index is coming from, it isn’t that impressive yet.
But it is important to pay attention to the market right now as things are lining up for at least a powerful short-term rally. When we look at the put/call ratio we can see that on a huge up day that it jumped to 1.12 which is a very high level of fear on such a bullish day. That tells me that market players expect this market to move lower on the short-term. Too bad these guys are almost always wrong. Therefore, the extremely bearish bets on such a strong day is a bullish item short-term.
