Half-Day Session Ends Like Most Holiday Half-Days End; Stocks Rise On Extremely Low Volume
November 28, 2008 | Comments Off
There isn’t much to say here either than I said on Friday we would have a week long holiday lower volume each day rally. That came and passed like clockwork. I had no clue the gains would be so huge in such a short amount of time but in this market you get used to anything and everything.
About the only thing that never changes the past few months has been the news. The news has been downright extremely negative and the negativity has reached a point that it is effecting me and might be having a negative impact in my trading.
I am not used to being a professional investor with a paid website. I am not used to having others be in my trades and see the same thing I see. Now many of you can see exactly what I see and I wonder if that is dangerous or if it is just the signs of the times of the market we are in.
I am sure when the market changes to a real bullish uptrend–and not this short-term short-squeezing lower volume each day rally we have now–we will see everything working again, like it should. However, for now things are a bit crazy and that has everyone a little sketchy despite the holiday season.
Christmas Special
November 28, 2008 | Comments Off
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Big Wave Trading wishes everyone a safe and Happy Holiday Season! Merry Christmas!
Stocks Put In A Very Bullish Session Across The Board With One Big Problem: No Volume
November 26, 2008 | Comments Off
Stocks put in a very impressive drive higher as another round of short-squeezing hit investors who were a little too heavily short coming into today. The reason why I would call this another short-squeeze rally is that, once again, volume has fallen on a day where the market rallies an extreme amount.
If you are playing the indexes on an intraday or very short term basis, the volume is not important and all you will need to focus on is the price action. Then you either move with the trend and/or use support and resistance on price charts to implement your methodology. However, when it comes to wanting to build stock/option positions over a period of time and reap the huge rewards that come to those who invest with those, you need to see volume expand on the rallies and retreat on the pullbacks before you can feel confident to go all-in long with full margin.
Until we find volume showing up on the rallies on the indexes, with pullbacks showing lower volume, and then while that happens see leading stocks at the top of the industry group list leading with the individual leading stocks in those sectors setting up and/or breaking out, there is no reason for active-investors who have a track record of making money on the long side in bull markets to go long.
Major Market Indexes End Mixed As Volume Declines As We Head For The Thanksgiving Holiday
November 25, 2008 | Comments Off
Today was a mixed session for the indexes but I have to admit that underneath it all there were actually some short-term bullish developments. Now, before you get too excited, remember, we are in a very hardcore downtrend and our shorts from May-now have paid off extremely well. The bottom pickers have been destroyed and the “value” trap bag-holders tell you that in the future it will be higher. Yeah, right, Scott Rothbart. You are about as helpful as nothing to mom and pops. Thanks for helping make them go broke with your investment strategy. Try not attacking RevShark next time for his wise advice.
Oops, went off on another rant. LOL. Anyways, the bottom line is that the “value” trap guys have been wrong all year long and as you can see via mutual funds and 99.99% of them being lower for the year this advice has decimated peoples accounts. The great news, for those that are a bit more active in their money management, have done very well by following the advice of this site and a few other gems or by reading the technical picture of the market correctly on your charts.
No Suprises Here As Another Typical Lower Volume Short-Covering Holiday Session Ends With The Market Putting In Huge Gains
November 24, 2008 | Comments Off
Wow. What a great two days we have had. Or so it seems from the outside to the neophyte. But to the experienced professional it was clear what we had here was your typical low volume short covering pre-Thanksgiving rally.
I might have said it here this Friday or not but I told my chat room that I expected us to rally all week long, this week, with volume contracting every day. So far we have started that right. We will see if this continues tomorrow with another up session on lower volume. As this rally goes along and gets closer to the 50 day moving average, we should see it put it smaller and smaller gains. If this happens, not only would I not be surprised at all but I will be preparing to take this market back to the short side if it does fail at either the key 50 or 200 day moving average.
The only real surprise would either be us closing lower for the week, which seems unlikely after today–but in this market anything is possible. The other surprise would completely be if we continued to gather steam on this rally and were soon taking out the 50 day moving average on strong volume. However, I would not count on that with the lack of leaders in this market.
Stocks Produce A Beautiful Rally On Mixed Volume; Yesterday Was Not Capitulation As There Was Not Enough Volume Or Fear
November 22, 2008 | Comments Off
Friday was indeed a very bullish session and the good news to some market players was that volume was higher on the NYSE and almost at the same level as it was on the Nasdaq from Thursday. The other good news to some was the fact that most of the indexes made up all the losses from the day before. This all seems bullish on the short term but I think it is wise to look at the big picture before jumping to any conclusions.
First off, I don’t want to poo-poo on the rally we had Friday as I will admit I am just happy to see more green with a pickup in volume. However, we have to be realistic and look at history as our guide for the now and future. If we study history we will see that the best bull markets do not start with a powerful day one. No, instead, history shows that most day ones are a quiet new low, reversal, and then a higher up day.
Where the big gains come is normally on day two of the rally or on the Follow-Through Day. The fact that we rallied so hard after such a big down day shows me that this market is not making a low and in fact is still extremely confused. The fact that volume was lower on the tech heavy Nasdaq proves that institutional investors were not stepping all over each other to load up on stocks. But the higher volume on the NYSE did indicate that big investors did find some bargains with the NYSE/SP stocks.
Stocks Continue The Selloff With Volume Finally Picking Up On The Selling
November 20, 2008 | Comments Off
Today can be called nothing other than nasty as most of the indexes made round trips back to either six-year or eleven-year lows, following a nasty selloff that came on very heavy volume. Volume picked up on every exchange as finally some signs of panic selling hit the market.
This selling took the markets off around 5% to 6% and a lot of stocks were just walloped. Now while I have continued to talk about the nasty downtrend this market is in and how well my shorts have been doing: top short holdings and total returns: IPHS 44% POT 65% GGB 72% SBAC 66% CYT 69% MOS 74% CETV 89% CPRT 28% AZO 24% RDK 17% AMX 49% PLCE 38% CAJ 34% SPG 52% CEO 51% AAPL 50% ENB 24% K 18% ARB 67% AMSG 20% SPW 77% RIMM 58% LLL 37% CEDC 65% APD 55% OKE 46% SDA 80% TITN 59% PAA 28%). I don’t believe I have seen the market in such a bleak condition in a long time and think I need to tell you about the lack of bullish items out there.
To start it all off only 3% of stocks in the market are above the 200 day moving average and to make it worse only 4% of those stocks are above their 50 day moving averages. I personally have never seen numbers this low on both indexes. If I have, I can not remember it. To top that off, the amount of stocks hitting a new 52-week high compared to stocks hitting a new 52-week low really showed some extreme readings today. Now while we have had 4,700 new lows at one point just last month which signaled over half the market making new lows, there were still more than just one stock hitting new highs. Today, however, there was only one stock that hit a new high and there were 2,300+ stocks hitting new 52-week lows. This is just an incredible number.
The Recent Rally Attempt Is Dead As Three Of Four Major Stock Market Indexes Make New 52-Week Lows
November 19, 2008 | Comments Off
It was a brutal day if you were a falling knife catcher as the market took those impatient bulls who believed the lows were in out and beat them silly with a 6.5% loss on the Nasdaq, a 6.6% loss on the NYSE, and a 6.1% loss on the SP 500. The losses were made even more damaging by the fact that they hit new lows from the recent rally attempt and volume picked up giving the market a very heavy distribution day.
This distribution day adds to the pressure the market is facing as each and every day passes. The market in terms of the Nasdaq and Nasdaq 100 are now down over 51% from the October 2007 highs. These losses have been extremely damaging to the psychology of many market players and has done some major damage to individuals portfolios.
This sad news is made even more sad knowing that the market does not appear to be near a low–at least as far as the market is currently concerned. This is obvious to me via the volume that is coming across the board on the indexes.
Bullish Intraday Reversal On Higher Volume Sets Us Up For A Relief Rally
November 18, 2008 | Comments Off
I don’t know how long this rally attempt will last or if it will even last. What I do know is how to prepare for either a market that is about to rally or prepare for a market that is going to go right back to its usual downtrend before we know it.
Right now, the market is in a very long term downtrend but on the short term, after the market reset its rally attempt on Thursday, things have been looking a little better each day. On Thursday the entire market staged a bullish reversal and ended up closing higher on stronger volume. After a lower volume session on Friday followed by an even lower volume session on Monday, today came with another bullish reversal and pick up in volume.
While this is good on the short-term it still is not an “all clear” sign that the market’s downtrend is over. Instead what we have is a market that is putting in its second up day on day four of the rally attempt. This now puts the market in a situation where we can look for a follow-through day.
Stock Market Indexes Start The Week Off With A Low Volume Selloff; All Indexes Are Holding Thursday’s Lows
November 17, 2008 | Comments Off
Stocks did what they have been doing for the entire past thirteen months and that was finishing with a lower close. This weak close was made worse in that it was yet another volatile late day move. This time it was a rollover to the downside with the indexes finishing right near their lows-of-the-day.
This very weak close was very nasty to see but some consolation can be taken with the low volume that came with the selling. That lower volume was the second straight day of a lower volume pullback that has come since the reset of the rally attempt on Thursday.
On Thursday the market dipped to new lows on a few indexes that reset the previous rally attempt. However, by the close, the market reversed to a very bullish close on much higher volume. That put market players who have been watching this selling for thirteen months now in a better mood.
The pullback the past two days have made some pretty upset that the market can’t hold onto the gains. However, these people refuse to look close enough to even understand that it is on lower volume and that there is a chance that we could rally and move higher for God knows how long.
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