Nasdaq Suffers An Immediate Distribution Day Casting Doubts On This Rally
October 21, 2008 | Comments Off
There really is not a whole lot to say about today’s market action other than this isn’t the most bullish thing you want to see after a market putting in around a follow-through day. Normally after a strong follow-through day, you will normally see another up day or a low volume pullback. It is not good to see an immediate distribution day. However, the good news is that stocks held up relatively well and after hours YHOO and AAPL had very good price action. These stocks are still well below their downtrending 50 and 200 day moving averages and until they can get back above those lines I doubt these stocks will be going anywhere any time soon. I will remain short in some of my positions as they are still below the 50 and 200 DMA and I still have large profits in these stocks.
Not much happened today as it was a pretty tight session that left me with ZERO longs and ZERO short. The price is still WAY below the 50 and 200 day moving average which is not bullish and should not have anyone that is a CANSLIM or intelligent investors going long this market. I did take a new long this morning and am enjoy a 3.2% gain compared to the markets 5% loss on the Nasdaq. This is what happens when you buy leading stocks. Not only will you kill the market in bull markets by buying the best stocks with top fundamentals breakout of hot chart patterns.
Mike Modelski
October 21, 2008 | Leave a Comment
Hi Joshua
I just finished reading your article in Stocks and Commodities magazine. It was a fascinating read and I enjoyed it very much. I loved that you have the brains to figure out a good system, one that works for you and that you have the discipline to stick with it.Keep up the good work.Don’t let the negative people that are out there get to you. Just delete their comments without even reading them, life is just too short. Don’t let any losers out there mess with your upbeat positive attitude!Anyways, thanks again for being interviewed by S&C Magazine.Mike in Dearborn MichiganPS we woke up to 39 degree weather this morning
Glenn
October 21, 2008 | Leave a Comment
I just wanted to say thank you for your daily commentary. I think you are right on with the market. As a trader of 1 year, I really appreciate it. I hope to soon become a member.Thanks again,Glenn
Extremely Big Short-Squeeze Lifts The Market Higher; Lower Volume Plus Big Price Gains Equals Short-Squeeze
October 20, 2008 | Comments Off
I don’t know what is going on with a lot of people out there but I have received some horrible comments from that horrible woman Sandy Wright who told me to go long bank stocks back in March. Listen Sandy, I am over it! If I would have listened to you back in March, I would be broke. So your comments are NOT welcomed.
As for Frank. He is just an idiot. If you don’t understand that I went short in July, August, and September and now have gains between 30% and 65%, then there is nothing I can say that will ever help you. If you were actually a subscriber and actually could see when I covered, you would know that I have taken over 50% of my profits in my shorts!!! I am still short from July-September. I still have VERY LARGE GAINS and will not take my FINAL gains until a close OVER the 50 day moving average.
Some of you just don’t understand how to make the BIG MONEY in the stock market. I do NOT play for a stupid oversold bounce. I position myself for 50% to 99% gains on shorts and position myself for 100% to 2500% gains on the long side. Now, I have listed almost every single one of the longs that I have ever held that became big winners from 1999-2008 on the long side. Not only have I done that to help PEOPLE (so many are so ungrateful) but I have listed my returns on my current shorts in here so that I may help people learn how to short correctly.
Big Intraday Gains Turn Into A Bearish Close As Stock Market Indexes Lose All Of The Gains Closing In The Red
October 18, 2008 | 3 Comments
I am going to make this weekend’s market commentary a short one because it gets old, for me, saying the same thing over and over and over and over. Right now, with the market continuing to give me short candidates and not long candidates, the same thing that I have been saying since this downtrend started still applies. The trend is down and thus the correct way to play this market is still on the short side.
The funny thing is is that some people actually want to buy stocks here. The problem with that is what? What stock is out there that you want to buy so bad that you feel you have to buy it now? MSFT? DELL? YHOO? EBAY? No, let me guess…GOOG, AAPL, RIMM, and BIDU. Am I right? It doesn’t matter. The fact that you will waste your time with these PAST LEADERS proves to me that your returns will be very weak EVEN IF THIS IS THE BOTTOM. Why is that? Because PAST leaders are never the NEW leaders of the next true bull market.
Instead of WASTING your time and money on these OLD leaders, you would serve yourself much better by building a watchlist of stocks that hold up well in this market and sport some accumulation while the distribution hits this market. The truth about getting the huge returns in the market comes from being patient and waiting for stocks to come to you. Not in you going out and buying a “bargain” which almost always ends up being a “trap.” Instead of buying the trash that this market has dumped on us, you would do yourself A HUGE FAVOR by waiting for a proper price pattern with strong accumulation to setup. Once this leading stocks sets up in a strong chart pattern, the smart thing to do would be to wait for a breakout and buy the stock as it breaks out. If you chase it, however, this method will not do you any good. You have to buy it within a safe area past the breakout (usually below 10%) pivot point or you will have to wait for a low volume pullback to the pivot point area or 50 day moving average.
Market Stages A Follow-Through Day But The Lack Of Leadership And Nice Charts Suggest It Will Fail
October 16, 2008 | 12 Comments
Today might have been a follow-through day but the fact that ZERO nice charts and ZERO nice CANSLIM stocks exist tell me that this is not a FTD I have to worry about being left behind. Also, take in to consideration I had ZERO full covers out of my shorts and there is a lot of problems to be worried about if you are a perma-bull in a bear market.
A lot of people are very excited to see the market up today. While I am very happy that we are not crashing further to new lows, the fact that there are no longs for me to take tonight with zero shorts that need to be covered. If today’s follow-through day was for real, then not only would I have new longs to take but I would be seeing a lot of stocks setting up in bases. Right now, you can’t find a single chart that still has a tight pattern after the brutal thrashing the market has received the past two months.
If I had a lot of new longs or had a lot of full covers in my shorts then I would be more than happy to turn into a bull. Remember, stocks can go up as much as they want but shorts can only go down 99.99%. You can’t get more than a 99.9% return on a short. So obviously I LOVE to be long. For some odd reason a lot of people missed the true bull market of 2003 to 2006 and instead showed up in 2007 and 2008 which was the last leg up and the start of a new downtrend. This has caused many to be very impatient in this market environment.
I Told You So; Never EVER Fight The Trend Of The Overall Market–Which Is DOWN By The Way
October 15, 2008 | 5 Comments
Well I would like to say that I am shocked that the market reversed all the gains from Monday but anyone that reads this knows better. Not only was I not shocked but I basically “told you so.”
The stock market resumed its downtrend on Wednesday as it only took two days to destroy the gains from a record Monday. One thing that people must not have learned from the 2000-2002 bear market due to ignorance is that the biggest up days USUALLY occur in bear markets. If you get rid of the 1987 turn, you can pretty much see that the top 10 biggest up days on the SP, DJIA, and Nasdaq have almost all occurred in a bear market. This fact did not escape me and after the big up day on Monday I told my subscribers that the stocks in my scan on Monday looked WORSE THAN THEY DID ON FRIDAY! This was my tell that this was just a bounce and not the start of a new bull market.
I do not know what in the heck people were thinking but so many people went out to buy stocks on Tuesday morning that I am almost happy that today happened. I am happy because the people that bought stocks on Tuesday morning are the same people that just sold out after losing 35%+ in the current downtrend. These people need to learn that the market is not “a game” and that there are real rules to follow if you want to be a CONSISTENT winner and not a ONE TIME LUCKY GAMBLER like SO MANY are out there.
Nasdaq Throws Up A Distribution Day Immediately…That Is Not Bullish
October 14, 2008 | 5 Comments
Well a lot of people were for sure that we would be up 5% or 7%, if not more, were sure upset to see us close lower on higher volume. That had to sting the perma-bulls who are really nothing but TRAPPED LONGS. Too bad that if they would have taken the time to study how the actual market works they might have gone to cash at the appropriate time. Instead of being upset that you “missed” the 11% up day, you should be thanking GOD HIMSELF that you are cash and avoiding this market. Only the biggest and most arrogant person would dare be long this market in the face of everything that we are witnessing in the credit and housing markets. It is stunning that people can see the ugly action in the market and still TRICK people into thinking “it is a buy of a lifetime.” It sure is! It will take a lifetime before you see a 100% return ever again if you buy stocks here.
Most people simply do not know or understand that the market is not safe to go long here. The fact that the government is stepping into the market should have EVERYONE worried. I simply can not see how the worst is over when I have 25 short positions and 3 long positions with 0 possible future longs setting up. The fact that I had only one full cover out of 25 shorts the past three days tell me that the trend is still down. The fact that I have absolutely ZERO max green BOP filled, heavily accumulated, tight pattern building stocks with ZERO CANSLIM stocks setting up in proper bases is my tell that the trend is still down. Remember, I am a trend investor. So if the trend was UP, I would not have ANY shorts and I would have 1-50 longs. The fact that I have only 3 longs with NOTHING! setting up should make everyone very worried on the intermediate to semi-long term.
Even If The Market Has Bottomed, It Is Way Too Early To Go Long Stocks; Lower Volume Shows Institutions Lack Faith In Bounce
October 14, 2008 | Leave a Comment
We will see how this plays out but I have to tell you something it is pretty hard to have an up 11% day and yet have more UGLY charts than we had on Friday. But today did it. That was easily evidenced by my long scans which had almost the identical stocks in it as on Friday. Too bad the stocks, after today, look worse via BOP going from max green to yellow, the RS line moving lower, or the price action was just too V-ish. No matter what, something was wrong with EVERY long candidate.
Now, I am not saying these looked great on Friday. But after the Friday close I had a lot more future long candidates than I did after today’s close. Those who are a Gold or Platinum subscriber can go to the forums and watch my part two to clearly see the longs scans in action. After going over that video you will be able to clearly see what is wrong. Remember, if you think these great big winners show up much later, you are wrong. During the 2002 lows, I had more stocks with NICE and CALM chart patterns than I did at any other time of the 2000-2002 bear market. That was a hint it was almost over. When the market started to weaken after some of those gains in 2002, there were even more stocks that started to show up OR actually broke out. Pretty soon we had the March 2003 FTD and I had more BEAUTIFUL MAX GREEN BOP and heavily accumulated longs than I knew what to do with.
What made it even better was as the rally went along the amount of beautiful charts increased. That was how you knew the bottom was coming, was in, and was over. Right now we are no where near that. I have scans that find stocks basing before they breakout and go on their biggest runs. Those scans have gone BLANK! as nothing meets the criteria that I look for when going long stocks.
A Big Intraday Reversal Sends Stocks Well Off Their Lows Of The Session; The VIX Hits A 21-Year High
October 11, 2008 | 11 Comments
Wow. That perfectly explains the action the past week in the stock market. There is no doubt that the past week was the weakest week any of us have seen in our lifetimes. That can best be seen in the SP 500 which fell 18.2% this week easily beating its old record in the week of the crash in 1987 when it lost 12.2%. So as can be seen this was easily one of the worst weeks any of us have ever seen.
The worst index this week of major importance was the NYSE which lost a whopping 19.5% in one week! That is by far the worst drop, as the Nasdaq only fell 15.3%. These kind of huge drops did nothing to convince anyone that the bailout bill was a good idea and proof of that fear was easily registered in the VIX.
The VIX hit a shocking 76.94 intraday on Friday. That was the highest level since 10/20/1987 when the VIX hit 172. This extremely high level on the VIX is something most of us have never seen as most of us were not investing full-time or doing this for income back in 1987. This extremely high level has a lot of people believing that Friday must have been the volume. Especially since volume came in the heaviest ever on the Nasdaq expanding by 41% from Thursday’s levels. Volume expanded around 50% on the NYSE. Even though my charting service Telechart does not show record volume, IBD shows that volume on the NYSE was a new high for at least 2008.
