A Welcome Rally Greets Investors Ahead Of The New Year; Before You Get Too Bullish Look At The Volume
December 30, 2008 | Comments Off
Today was a very positive day for the stock market indexes with the SP 600 rallying the most with a 3.7% gain. The Nasdaq, SP 500, SP 600, and DJIA all made it over their 50 day moving averages which helps now give them a little bit of support if this rally can catch any legs.
However, before anyone gets “too for-sure” of themselves and go out there calling a bottom I would like to take your attention BACK to 2002 and 2003. What did the rallies of October 2002 and March 2003, which WERE REAL bottoms, have that this rally does not have? If you answered volume, you are right. If you answered nice stocks, you are right. If you answered stock setting up in “hot” based, you are right. If you said…well you get the point. This rally off these lows, with these charts are NOTHING like the rallies of either October 2002 or March 2003. So for those that keep using those dates as reference points please check your charts.
Right now, the leading industry is airlines and I am not sure how that can be the “innovative” fresh new leading industry that is required to lead us out of bear markets. However, I am wise enough to know to be long the leading stocks in the leading industries of a market uptrend and that is what I am going to do.
A Selloff Hits The Market But Low Volume And A Bullish Late Day Reversal Leaves The Damage At A Minimum
December 30, 2008 | Comments Off
Have you ever had one of those days? You know a day where everything starts off well and then before you know it everything is falling apart. Well, today was a day like that for me as my computer decided to pull a couple of “frozen” moves that prevented me from getting my full video two done properly.
So before we go on with the rest of the commentary, I want to apologize for the late post and the short video two. Subscribers know that I bust my tail every day to make sure that you get the high quality service that you deserve in a tough market. Well today my second video was definitely not the video that I originally wanted to publish. So thank you to my subscribers for enjoying a short video two tonight. Hopefully that error will not be repeated by my computer for a while.
As for the free YouTube video. We uploaded it first to YouTube and somehow it was rejected. After a second upload the voice was messed up. Now the third upload is going up and hopefully it works fine. If not, I promise the problems will be fixed by tomorrow.
Stocks Stall On A Very Quiet Post-Christmas Session
December 27, 2008 | Comments Off
I have been around the stock market now for almost 13 years and I must say that I do not quite remember a Friday so slow after a Christmas holiday. I am used to seeing lower volume every session after Christmas but not quite this quiet.
I would assume the very low volume was the result of wall street just wanting to take a very long extended vacation here at the end of the year after the year we just had. However, I also believe a lack of funds that are out there are obviously a cause of the slow trading.
Even though the market was up on Wednesday and Friday on extremely low volume it wasn’t that big of a deal as for the entire week all the indexes finished in the red. Now this is not a bearish development, it is in fact a bullish move.
A down week on lower volume with tight price action and bullish tails (Nasdaq shows it the best) are bullish. What we want to see now to have a real possibility of a bottom is up weeks on stronger volume and down weeks on lower volume. Right now we have volume pulling back overall the past two months compared to the huge selloff that preceded this attempted bounce.
Another Low Volume Selloff Greets Investors Ahead Of Christmas; Better To Sell On Low Volume Than Rise On Low Volume
December 23, 2008 | Comments Off
Today was another pre-Christmas session as volume came in even lower than the day before. The good news is that with the low volume came lower prices. How is that good news? Easy. It is much more bullish to see stocks fall on low volume than it is to watch them fall on higher volume. At the opposite end it is also better to see low volume selloffs than it is to see low volume rallies.
It should be obvious to most why this is the case but sadly after I watched Cramer’s mad money tonight on CNBC I am sad to say that I don’t think most get it. A selloff on lower volume indicates that big institutional investors were not interested in dumping stocks in a weak tape. Instead the lower volume indicates it was just weak retail holders selling and not the work of well-funded institutions.
If we would have seen a rally on lower volume today, it would have been safe to assume that the big boys stepped away and let the retail crowd bid prices higher. Fortunately, that was not the case. This now allows us to possibly setup in a more bullish situation.
Low-Volume Pre-Christmas Session Ends With Stocks Lower But Well Off Their Intraday Lows
December 22, 2008 | Comments Off
Today was a very dull session and that was a given by just looking at the volume. However, despite the low volume, stocks still sold off almost all day long as most indexes finished down around 1% to 2%. The good news is that stocks found some support during the last hour and they were able to rally off the lows thus giving respectable closes.
That rally the last hour gave all the indexes little tails on their daily chart patterns and the little tail with a lower volume selloff can almost be called a “constructive” session. Why is this? Because it is obviously better to selloff on lower volume than to selloff on higher volume.
Now, I do know that a lot of people want a Christmas rally so they can end the year on a positive note but I must say that a selloff on lower volume during these next two weeks might be a bullish situation for this market.
Stock Market Indexes End Mixed As Quadruple-Witching Options Expiration Sends Volume Higher
December 19, 2008 | Comments Off
Stocks started off strong but as the day wore on indexes pulled back with some finishing higher and some finishing lower. The one bright spot out of all of the indexes was the SP 600 which rose 1.6%. The IBD 100 and DJIA fell .3% leading the way lower. The loss on the DJIA was the second distribution day since the rally attempt started and the IBD 100 is not only lagging all the indexes in this uptrend but it has not even taken out the 50 day moving average. When this is the case it makes it hard to be real excited about today’s action.
About the only real positive that I could find with today’s action was that there were more stocks in my long scans than there have been in a long time and that raises my confidence level a little bit that maybe we could get a bear market bounce sometime soon. This bounce is too lame for it to be an official bounce in my book. Unless you like gambling and can get lucky and buy HSNI at the exact bottom and get a 250% return in nine days. However, if you got that stock, I am sure you were burned by the other 99 out of 100 you attempted a move like that on.
The sad fact remains that this market is not looking that great. The stocks that reside in the IBD 100 and IBD 85-85 are basically void of any “hot” chart pattern. Nothing is setting up in anything that has me extremely excited and ready to go long. Instead the few longs I get from leading stocks in leading industries have a tough time making headway and once they are up 20% have usually seen the most of their run. This is not the action of a healthy market. In a healthy market you will get 20% gains in a few weeks, a consolidation, and then another run. However, this market has not been very nice to breakouts.
Major Market Indexes Continue To Struggle Around The 50 Day Moving Averages On Mixed Volume
December 18, 2008 | Comments Off
Today was a bearish and dull session that saw stocks fail to take advantage of the recent takeover of the 50 day moving average. The fact that stocks can’t really mount much of an advance after getting above this crucial line indicates to me that the market might not be ready to turn into an intermediate trend uptrend.
Instead it appears the trading range the market has been in the past two months will continue to trod along until the market actually decides to make a decision one way or the other from the 50 day moving average.
When we look at individual stocks in our scans and look at leading industries we can see that the market is not real healthy and while some education, small banks, medical, and metal related stocks are doing well recently the fact remains that this market has a lot of resistance to deal with and will probably be tough to deal with in the short-term.
This is why I must caution everyone from calling a bottom. If we had a volume, we HONESTLY would have some high quality fundamentally strong stocks setting up in beautiful green bases on my charting software. The fact that my scans continue to be completely void of any high quality stock with nice charts and that my long-term shorts continue to work perfectly and not give me full cover signals is a clear signal that the downside is not fully in check yet.
Stocks Hang Around In A Tight Trading Range Consolidating The Gains Of Yesterday On Lower Volume
December 17, 2008 | Comments Off
Today was a pretty boring session for those that stare at their computer screens all day as major stock indexes stayed in a tight volatile range as most pulled back around 1% on lower volume. This was taken to mean two different things for two different class of traders.
The bulls championed today’s action because they were able to hold onto the gains after retaking the 50 day moving average. However, on the other end, I heard bears say that the inability of the market to rally further on the gains shows lack of confidence and confirmation on yesterday’s gains.
I on the other hand have no opinion and take the market for what it was today. A tight ranged inside day (basically an inside day. A few indexes went a little outside yesterday’s price range) on lower volume. It was neither bullish or bearish. It just was what it was.
Now, there was one thing that happened today that has not happened yet during this entire downtrend. While many people tried to play super-hero by calling bottoms in September and October, I stayed with the downtrend and thus made good money on some very solid shorts. Since then the market has gone range bound from 10/15 to 12/17 on the SP 500 with that index falling just .38%. That tight movement the past two weeks has made it hard to take new longs or new shorts.
Ben Unleashes A Bullish Rally Sending The Major Market Indexes Over Their 50 Day Moving Averages; If This Is A New Bull Market And Not A Bear Rally, Where Is The Volume??
December 16, 2008 | Comments Off
It has been an extremely busy day in the chat room and I produced three videos tonight with the third one focusing on the best gold and silver stocks that appear to be building bottoms and making right sides of bases. The length that it took to make these three videos with all the conversation in the Gold Forums and Chat Room means that I am just going to keep this short tonight.
The market had a WONDERFUL rally today due to the huge rate cut. However, I want to remind everyone that when the Fed RAISES rates it is telling you “the economy is hot and we need to cool it down.” This means usually that stocks are rising and on fire. When the Fed cut rates it usually means that they are saying “things are REALLY bad and a .25 basis point will not be enough so we need to go deeper since the data is so ugly.”
Since we have eyes we can see how ugly the market has been. But the fact that after all this carnage they are still SLASHING rates is a HUGE red flag to me to be ready for more lows. This also worries me about the dollar and believe that fear is being realized via the accumulation in the UDN and the distribution in the UUP.
Late Day Rally Saves The Market From An Ugly Close But Stock Indexes Still Finish Lower On Lower Volume
December 15, 2008 | Comments Off
Today’s action was not that exciting as no real big news item came out today to bring any dramatic action to the tape. However, quiet pullbacks when a market has been moving higher in the short term is always a welcome thing to see if you are a bull. However, if you are a bear then you are comforted by the fact that the indexes are still unable to get above the 50 day moving average. Either way we look at it, right now, the indexes are not doing that much.
Instead the indexes continue to meander around this trading range that it has been in from the September to December period. This sideways movement has made it both difficult for longs and shorts to really take any positions recently and gain any kind of significant worthwhile reward. However, with the market coming up on a holiday shortened week next week, you would think that the path of least resistance would be up. At least for now.
If that were to happen and we would take out the 50 day moving average in a manner like that, I am sure a lot of technicians will jump the gun way to quick and declare the bear market over. Folks, can you do me a favor? Go look at the downtrend in 2008 on the NYSE and Nasdaq and ask me what happened every time you bought the index above the 50 DMA alone, with the 200 DMA ahead of it.
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Recent Posts
- Market Sells Off On Slightly Higher Volume But A Nice Last Hour Rally Saves The Market From A Real Distribution Day
- Is It Healthy When A Market Rallies On Low Volume After A 50% Selloff? Of Course Not
- The Market Welcomes The New Year With A Mini-Bang Of Its Own; While Its Nice To See Green, It Would Be Even Nicer To See Volume
- A Welcome Rally Greets Investors Ahead Of The New Year; Before You Get Too Bullish Look At The Volume
- A Selloff Hits The Market But Low Volume And A Bullish Late Day Reversal Leaves The Damage At A Minimum
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