A Day Full Of Extreme Moves Up And Down, Intraday, Ends With Stocks Mixed And Nearly Unchanged On Lower Volume

September 10, 2007

Nothing happened today that changed the analysis of any of the indexes, after last week. The biggest feature of today’s trading definitely had to be the wild price moves in both directions. After the sellers unleashed their wrath in the morning, buyers stepped in from the retail side and bid stocks higher almost all the way into the close. However, in the last hour stocks paired back some of those gains which caused the indexes to close mixed. However, the bullish case was made for stocks as all the indexes held well off the morning lows.

Though this market has not bottomed, new longs are not breaking down and some are still holding on to some nice gains. But if some of our nice stocks start turning tail, we must not be ashamed to admit we are wrong here and cut losses. I seriously doubt some of our winners will turn around but you must remember ANYTHING CAN HAPPEN. Saying that, however, when you look at the chart of RIMM and see all that green all over it, or you look at BIDU moving ever so higher, or AAPL bouncing right off its 50 day moving average on strong volume and putting in its 3rd bullish intraday reversal, it does become hard to get too bearish here.

Especially considering how much bearishness I continue to hear out there. Every time I put on CNBC at the gym ALL I EVER hear about is the upcoming recession and/or the subprime damage that is going to spread to every corner of the market. Well, excuse me Mr. Contrarian but last time I checked when everyone was bearish I am supposed to be bullish. Even though I don’t have to be a RAVING MAD LUNATIC bull (Cramer), I still must respect the trend since August 16 and leading stocks and remain with my bullish bias.

At the same time, I still think it is the best bet to keep cash very heavy. There are about three stocks with chart patterns that are strong enough to have produced some big gains by now. However, they have not. And that, to me, is a clear signal that this market is not ready to run to the sky. Take this, along with my shorts doing very well and you have a mixed market that is rewarding good stock picking.

There is not much else to talk about and I went into detail on all my longs and shorts tonight and recommend that you read those carefully and study those charts to see if you can see what I can see. When you have markets that move so much intraday and close flat, you know you are basically dealing with COMPLETE NOISE and NOTHING else. There is NOTHING profound to be found in this market. This is a random stock picking market. Choose wisely.

Aloha and I will see you in the chat room!!!

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