The Second Quarter Ends with a Thud as Indexes Notch a Day of Distribution
June 30, 2009 | Comments Off
The second quarter ended in bleak fashion as institutional investors were busy selling holdings. A drop in consumer confidence didn’t help stocks as higher oil prices and economic uncertainity were major factors for the drop. There wasn’t many places to hide on Tuesday, except for leading stocks. The NYSE indexes suffered heavy volume selling throughout much of the day only to see late day support. Over on the NASDAQ volume was subdued for much of the day until the last 5 minutes when a rush of volume hit the NASDAQ. Quarter end window dressing was nowhere to be found on Tuesday. With the quarter end behind the market and earnings season upon us it’ll be important to see the market see some accumulation.
As it stands now the Dow Jones Industrial average is leading the way with 5 distribution days. Although 5 is a high number the Dow is a lagging index and its distribution days are minor not major ones. The S&P 500 has seen 4 distribution days but like the Dow its distribution days are minor. What I am focused on is the leading index which happens to be the NASDAQ and it only has 2 days worth of distribution. Remember, it is quite normal to see distribution show its face when the market has made an uptrend. We’ll need to see the big institutional players step up and begin operating on the long side buying up quality growth stocks.
Stocks Pullback on Lower Volume, but a Few Leaders Keep this Uptrend Intact
June 29, 2009 | Comments Off
Small caps suffer the Russell Rebalance hangover while the S&P 500, Dow Jones Industrial, and NASDAQ enjoy gains on lower volume. Volume fell sharply from Friday’s inflated levels and was even lower than Thursday’s level. Monday’s action did resemble typical window dressing action the market experiences at quarter’s end. Leaders were mixed, but the positive action outweighed the negative action. The leaders that were down did find support at key moving averages. Dealing with Friday’s Russell Rebalance the market held up relatively well with key leaders showing strength.
One day does not make a difference and more than likely Monday’s shouldn’t sway you to the bullish nor bearish side. Taking the 50,000 foot view the market continues to be in an uptrend with decent leadership. This is what we are dealing with at the moment; it isn’t the best looking rally, but its what we have. Often times rationalizing moves is a way for those who are not on top of the market to make an excuse for missing out on gains. Taking a step back and viewing the larger picture will help you gain a better perspective of what is happening in the market.
As far as short-term over-bought conditions we simply aren’t there yet. The McClellan Oscillator is indicating we are at the mid-point between oversold and overbought. In addition, the number of stocks over their 50dma is only 51%. A month ago the number of stocks over their 50dma was 83%. It’ll take another run at the most recent high quickly to send this market into overbought conditions. A more constructive move would be to see this market drift slightly lower for the remainder of the week while we consolidate the gains recently observed by the market.
Friday Produced Gains Greater Than The Whole Year Combined; Sometimes The Market Will Shake You Out. You Better Stay On Top Of Your Charts Or You Will Pay The Price.
June 28, 2009 | Comments Off
After Monday’s session it appeared the market was D.O.A. However, even though I cut losses in all stocks not showing me gains or cut back in stocks with gains that I had not taken any profits on, it doesn’t mean that I just go “dark.” Jesus Christ, you can’t do that in this market! What are some people thinking? Scary. Anyways, by Thursday, every single Platinum member, along with me, realized a MAJOR BULLISH REVERSAL occurred. Hence we had 20 new longs for Friday. 18 of the 20 were up. The two that were down, one is a full sell and one is a part sell and we will move those small losses into stocks that might setup like the next CHLN, CHBT, or ISTA for me. Even I messed up big this week. I went long heavy CHLN last Friday and by this Friday the position was up $30,000. The only problem. I sold it all Tuesday morning. Guess what? IT HAPPENS! Stop crying, I say, and wake up. By getting myself back in the game I did not miss all the CLEAR buy signals on Thursday and that led to some huge!!! gains like the excellent long in CHBT. That’s right everyone, my biggest CHINESE long of Friday was completely filled and a nice 56% one day gain was realized. Will I be taking profits? NOT ALL but obviously I will sell 50%. I have been doing this since 1996 for a living and think it is funny that people that do not do this for a living still try to think that they can be “smarter than the market.” Sadly, you are telling and making it clear to the world that you are not a smart person. A smart investor realizes the market is crazy and understands he can never turn his back on the market or else you end up selling and not buying back. By the way, my PAST BIG WINNERS that show my best stocks with the best patterns that were my biggest/best positions will show you quite a few times that those perfect charts gave us “buy signals” before the “perfect buy signal.” According to some “non-Platinum (I notice I never have problems with my Platinum guys…I wonder why???? Duh they have direct access to me)” members it is obviously a sin to sell a stock and buy it all back. Really? If you think that I am pretty sure you will NEVER hold a TASR your ENTIRE life. Stinking thinking like that is just sad and will not make you a winner in the stock market. Also realizing technical analysis is a windsock and not a crystal ball. A really wish some of my Silver/Free members would use more common sense and spend more time studying past big winners. I really do receive some HORRIBLE emails that my Platinum and Gold members WOULD NEVER send. Why? They are dialed in. I hope you all realize this site is for people that really want to do this for a living. Which is hard, by the way. I get it. Do you? I hope so or else you are going to have a DAMN HARD time making money in this market where our government has infiltrated. I will be posting my top returns when I finish my scans early Sunday. Check out my gains and tell me if the people you are following or if your own trading can hold itself up to the methodology that I use which involves NO EMOTIONS (unless I am dealing with newbie Silver members–rolling eyes). “Explain yourself.” I just did. Sheesh. Some of you guys need to learn some manners, also. Aloha from Maui where I am sure I had a much better weekend than most. Great surf, great scenery, and finally some HUGE profits from the stock market. Perfect harmony. Life is great and so are the gains coming from China. Zai jian and ALOHA!
32!!! New Long Positions And 18!!! Stocks I Am Adding To My Exising Long Positions For Monday’s Stock Market Session (THIS IS A NEW RECORD THAT EVEN SURPASES THE MOST LONGS IN ONE DAY SET IN 2003 [29])
Stocks Advance in Heavier Trade but Well Below Average
June 25, 2009 | Comments Off
Stocks started the day in the red when jobless claims rose higher than expected. Final first quarter GDP was released showing a drop of 5.5% rather than a loss of 5.7%. It was the jobless claims that spooked traders at the opening bell. The red quickly turned to green as stocks found support and were bid higher thoughout much of the morning. Volume ran higher than Wednesday’s trade but remained well below average daily volume. Once again, it appears the big institutional players are simply sitting on the sidelines and continue to wait for an opportunity to get back into the market. Thursday’s action is not the type of day that would get you extremely bullish, but it was a positive development for the market as a whole.
It was nice to see leading stocks bounce higher than the major market averages. Again, like the major composite indexes volume in the leaders was higher than Wednesday but below average daily volume. Ideally, we’d like to see volume rush into leaders with price outperformance. Instead, we are simply getting weaker than normal volume with positive price action. Do not intrepret this as BEARISH movement it simply signalling we won’t see powerful moves higher. Remember, the leaders are acting relatively well with many finding support at the 50dma showing strength not weakness.
Volume Slips Across the Board as the NASDAQ and S&P 500 End Higher
June 24, 2009 | Comments Off
The market shrugged off news from the FOMC meeting as well as the 5 year Treasury auction today. However, the big institutional money stayed on the sidelines as volume slid from Tuesday’s action. Ben Bernanke and the FOMC decided to “do nothing,” favoring the status quo over “change.” Initial reaction from the market was negative but it did find its footing. There were a few tense moments where the market did look like it was about to crater, but support came to the rescue. Lacking volume, this market continues to look more on the weak side than the strong side.
Big stock leadership did not overwhelm the market with great price and volume action today. Although, some leadership did recover at key moving averages. They were few and far between, but still there. What is concerning is the lack of conviction on upside moves these big stocks have. Today we saw far too many big stock leaders move higher in price but in lower trade. This type of action is letting us know there isn’t conviction to the upside and the path of least resistance for these stocks is beginning to turn lower. The big stocks are very good indicators of what is to come for the market and if they decide to run lower our market swill follow their lead.
Once again the market will be paying attention to the 7 year auction to be held Thursday. This time the attention might not be as keen as it was with the two year auction held on Tuesday. Traders are now conditioned to think the 7 year auction will go off without a hitch as the two year and 5 year notes were successful auctions. Although it will be interesting to watch the market reaction, it is nothing we are going to be basing buy and sell decisions off of.
Stocks Play Waiting Game As Fed Meets; End Mixed in Lighter Trade
June 23, 2009 | Comments Off
The long awaited $40bn 2 year Treasury Note auction happened and was deemed to be a success. Stocks didn’t pay much attention to the news and continued their lackluster trade which began from the get-go. Volume ran lower for much of the day suggesting insitutions mainly stayed out of the market’s way on Tuesday. Not too many traders are willing to step in front of Wednesday’s Federal Reserve Statement as well as another Treasury auction; this time $37Bn 5 year notes. Tuesday’s market action was not particularly bearish but it was not positive by any stretch of the immagination.
In the scans I run today was the first time in a long time I have seen a dramatic decrease in the amount of fundamental sound growth companies. The significant drop is quite worrisome as many leading stocks have been breaking down. Although they could be forming bases they certainly aren’t signalling strength at this point in time. The lack of strength from leading stocks is quite concerning and is spelling some trouble for stocks ahead.
Given the weakness in leading stocks, we aren’t heavily shorting this market. If we get a correction it may set up bases in stronger growth companies. This isn’t late September of 2008 where it was clear you should get heavily short. At this time, we are at a crossroads where there is a possibility of much lower equity prices. However, we aren’t seeing signals that would clue us to get short heavily. We certainly are testing the short waters and will look to continue down that path if the market continues to send signals it is the right side to be on.
Commodities and Technology Crumble Weakening Leadership and the Overall Market
June 22, 2009 | Comments Off
By Market Speculator
Once again Crude Oil took a major blow Monday as well as other commodity prices. The IMF revised its growth causing panic in the World Recovery thesis. Technology stocks also took a tumble Monday as investors were fleeing technology names. Stocks were simply sold today as sellers wanted to cut loose at all costs. Closing at the lows of the day is a signal that sellers are in full control. Leadership has been showing weakness for the past two weaks and is finally beginning to weaken further at an alarming rate. Very nasty action today on the indexes as the market is now in correction mode.
Big stock leadership is always a great barometer for the market. Big insitutional players love the liquidity and low beta these stocks have. The price and volume action of these stocks are very important because it displays the mentality of the big institutional player. We have seen the big stock leadership crack a bit last week but that crack widen today. Two big stocks that have performed well in this market uptrend put in very ugly days. Gold and Platinum subscribers are aware of the ones I am referring to as I posted in our forums about the stocks. This is not that time to be fighting the market trend here, do not be a hero.
The Dow Jones Industrial Average Slips with Crude Oil While the NASDAQ Remains the Leading Index
June 21, 2009 | Comments Off
by Market Speculator
Friday saw a quadriple witching day pushing volume well above Thursday’s level. The Dow Jones Industrial Average had slipped lower closing just short of a distribution day. Over on the NASDAQ, the composite index witness a day of accumulation. However, during the session the indexes were not able to hold the opening move. Sellers took over after the morning frenzy of option traders closing/rolling their positions. Only the NASDAQ was able to close above in its upper range for the day, but barely closing above its upper range. More importantly, leading stocks once again showed strength many of the leaders saw positive action. It is clear the NASDAQ is the leading major index and has positioned itself to continue it’s move higher.
We are certainly seeing a lot of positive action in leading stocks. There is also very nice action in a few big cap stocks. Institutions love playing large liquid stocks and we are certainly seeing the accumulation by the big boys. At Big Wave Trading, we are saying on top of these leading stocks and taking advantage of the gains they are showing us. Leadership is the number one factor to take a look at when reviewing the entire market. They will light the path the market will take.
Volume Eases Across the Board as NYSE Indexes Ended Higher
June 18, 2009 | Comments Off
by Market Speculator
Thursday’s stock market was quite a bore, even with the Philadelphia Fed reading came above the expected number. The reading showed contraction but far less than expected, suggesting things aren’t as bad as they may appear. Stocks took notice and jumped higher, but could not hold the highs. From the highs stocks bounced around in lackluster fashion. News from the treasury market still isn’t good the Treasury Department announced its largest ever auction. Bond prices fell as investors once again are fleeing the treasury market, not in fear of inflation but the massive amount of supply coming on the market. The market took little notice and continued its lackluster trade. Overall, the market was taking a breathier as options are set to expiry tomorrow.
On the positive side the NASDAQ was able to consolidate its gains from Wednesday’s session. On the other hand the S&P 500 rose on lighter volume suggesting buying action on the index wasn’t supported by institutional players. Remember, we need to see volume coming into stocks to show strength with a move higher. Without volume, the move quite possibly could turn out to be a headfake. Clearly the NASDAQ is much better behaved and the leading major index.
Banks Weigh on the S&P and Dow while The Nasdaq Enjoyed a Day of Gains
June 17, 2009 | Comments Off
By Market Speculator
Two banks, Morgan Stanley and Goldman Sachs were able to repay the government but the move did little to assist the Banks as they weighed heavily on stocks. Late day selling knocked stocks off their highs across the board but the NASDAQ composite was able to hang onto decent gains. Volume was higher across the board as the NYSE indexes were able to escape a 3rd straight day of distribution. A positive sign from the day was the ability for the leaders to hold key moving averages rather than the selling they have been experiencing over the past few days. Over the next few days will be important for the market as it will foreshadow the type of market we’ll be experiencing.
It shouldn’t come as a surprise the market has found itself with a headwind. We are in our 14th week from an attempted rally and it is quite normal for mutual funds and other institutions to lock in profits. More than likely, what we’ll begin to see is the junk-off-the-bottom will begin to fade. A few things can occur: the market rolls over or the market begins another uptrend with quality growth stocks emerging as the leaders. Quality growth stocks are essential for an uptrend to have longevity. At the moment, the market certainly has run out of steam for the time being. We will need to see quality growth stocks as leadership otherwise we will roll back over.
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