A FLat To Down AND VERY BORING Week Comes To A Close Leaving Us Praying For A Real Trend To Actively Invest
July 13, 2008
It was a down week for stocks and even though I gave the market only a side glimpse as I watched the overall stocks within the market–I know the trend is already sideways to down, it was quite clear that the few really nice charts that were left are starting to die like they have done so well of doing this year and that (something that could become more bullish later on) many of the big-cap oil, steel, metal, and chemical stocks all showed signs of possibly topping. Even if they have not topped, the fact is many of these have been running since 2001, 2002, and 2003. So if you are thinking of buying a new breakout, try to look at a longer-term weekly arithmetic chart before you go long that shorter-term intraday 60-minute logarithmic chart breakout. A little history and perspective will save you a fortune in learning cost, in the long-run.
Truth be told if some of you are finding this market frustrating it is because you refuse to STOP LISTENING to the talking douche-bags on CNBC. These fools make it so that you are constantly confused. If you just put your trust in someone who has a long term track record of beating the market (I DON’T CARE WHO IT IS AS LONG AS IT IS NOT a yelling madman on CNBC) over the long-term markets of the 80s, 90s, and 00s. A lot of people did well in the eighties and nineties but are now doing HORRIBLE in the double-zero’s. These people should not be listened to unless they have told you to either stop trading or to have reduced your holdings considerably recently. If they have not and are telling you to load up on stocks, I am not sure I can say that you should be listening to that person.
While I believe in buying panic, I don’t think we have real panic out there in price and volume and that can clearly be seen by a VIX around 25. If the VIX was at 40 and I saw a put/call around 1.6, I could say maybe buying stocks for those that do when blood is on the street could. But for now I don’t see that panic to buy stocks. I do think people’s exaggerations about how bad things are is overdone but the quality of the longs and the supply/demand patterns that show up in top quality longs before a bull market simply is not there.
The only thing that is there seems to me is a lot of frustration. Listen the market recently tried to setup and give us some longs to play with but that did not happen. That just confirms we are more range bound. However, when I casually read or hear anything about the market in the media it sounds like the worst is happening. I can’t wait till the market actually crashes and the VIX with the market can confirm what these jokesters are saying. I mean I am sure there are some of you, right now, that know where the futures are. LOL. Dude, if you are trading using my methodology you don’t need to know the futures. Freaking loosen up that tie bro. Luckily, for me, everyday I invest in surf-shorts. So when the next bull market of the 90’s that made so many “geniuses” comes again and I take control of the market and produce the huge winners that 1999 and 2003 produced left and right then I can be truly vindicated ON A REALTIME level that watching the market too hard is stupid. Especially in a downtrending to choppy market. It is so stupid to psychoanalyze this market I do not know where to even start.
I mean sheesh in 2003, we already had 450 stocks up 100%. This year we have ONLY 65 right now. I am not sure why or how some of you do not understand why it is so hard to pick the winners this year. This simple statistic clearly tells me why it is so hard now. The fact is is that I found all 450 back then and found your 65 right now. Nothing gets by my simple scans. No stock can make a huge run and get by me. NOTHING.
Besides there also only being 65 stocks up 100% this year, there are only 20 that are up 200% since the start of the year. In 2003, BEFORE THE BULL MARKET WAS CLOSE TO BEING FINISHED IN JANUARY 2004, there were already 164 stocks up over 200%. That is almost three times more than are up 100% this year. So the reason “why I have not found TASR this year” is because there is no TASR this year. When the next TASR sets up in the pattern that you see in my ‘Past Big Winners’ and not only shows me that beautiful chart pattern but shows me those EPS/sales growth again, I will, once again, be very long the next TASR.
What is so hard to figure out about this and why do some people not understand that a raging bull market is basically EASY for me to make money in (over 80% accuracy in 99 and 03) compared to non-raging years. The fact that I continuously beat the market even in tough time proves that this methodology is still superior to the “sky is falling” crowd we hear on TV every day now. And to be honest that is all I ever hear. No matter what time of the day it is, no matter where I go, or no matter who I have not talked to in Maui or seen in weeks to years, they all ask the same question. “When is this market going to crash?” If they don’t ask that they ask an even more weirder question and ask me “when is the recession going to be over and when will stocks rise again?”
Now I know it has not been a great year at all but the fact that I have produced some winners, have a small victory in my accounts so far this year (even though my gf and friends speculative accounts are in fact down 3 and 1% this year compared to the Nassy being down 16%) with a 10% gain, this has still been a pathetic year.
I am encouraged by the fact that I see everyone everywhere recommending to buy oil stocks. Along with some “soothsayers” that I have been following for over ten-years that are now treated like gods. Some have heard some recent buy recommendation from big oil stock promoters not realizing that weekly arithmetic charts going back to 2001 clearly show that you are not only late to the party but you are anywhere from 100% to 5000% late on some of these. Remember, people, you first want the market to be in an uptrend before you go buying. Second, you have to realize that if you are a fund manager if you have been long a stock for a while and you have a big gain and you want to dump it you need the most “dumb money” you can find out there. CNBC fits that role perfectly. Watch that in this market, if you watch CNBC. If you don’t watch CNBC, congratulations!!! You can actually think for yourself, you probably use charts somehow to help you invest in the stock market, and I guarantee you have a better return than those that do. That is my final plee to stop watching “the sky is falling crowd.”
They are finally IN LOVE WITH OIL stocks and so if those fall, along with chemicals and metals, which are also becoming media darlings, maybe we can have a real bull. All I know is that before we are going to have winners that actually look like 1999 and 2003 charts that work, we are going to have to flush the excess in the commodities market. I believe that is starting. But I have believed in a commodity flush before and was proven wrong. However, I am persistent and this time all the charts are moving around wildly on HUGE volume (this is known as churning in my line of work) and the fact I am already short some large-caps in this environment shows that something must be wrong. I don’t get short stocks unless they are setting up in HISTORICALLY HIGH ODD patterns. I have read the book and studied the charts OVER-and-OVER, from WON’s “How to Make Money Selling Stocks Short.” I am starting to see some of these patterns and that with a lack of my “HOT HOT HOT HOT HOT” max green BOP charts in either CANSLIM or totally speculative but hot industries is a sign to stay in cash and FOR ME TO start to get short.
For most, shorting is not a game to try to even to do. But for those experienced, if these beloved big-cap oil, chemical, and all other type of commodities continue to breakdown on heavy volume. You know what to do on the low volume rallies.
on the sentiment front, while the VIX may suck around the 25 (27.49 to be exact-I know my numbers; we just don’t have to be exact in this realm of conversation) area but the fact that bulls dropped to 27% and bears rose to 47% this week, from last week’s already falling numbers, is another good thing for us “waiting to be bulls.” That with the extremely high 14 NYSE short-interest ratio sure is going to be fun if the VIX can give us some real fear in the market. Then charts like DGLY will make you rich like PDO did and charts like AEHR and ACM can at least act like DGLY did. For now, I’ll take what I can get. And that isn’t much.
At least the Mets are winning again!!!!! They are winning a lot and their streak is hot!!!! Nine-in-a-row baby!!!! Mike Pelfrey. Great time for an all-star break. Not!
Aloha from Maui, where the Mets are over 6,000 miles away yet are still right in my heart where they will forever be; corny but true. Go Mets Go! and please, God, soon, go market go! Just give me some CANSLIM or “Hot” charts.
Comments
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Random public thoughts:
For a rare moment in my life, I think it is good that someone intervened here in the case of FRE and FNM..too big. I think it had to be done. It is simply too important psychological (no matter how ignorant the possible consumer is) to let them go illiquid. $5.3 trillion is a lot of debt…I am glad I don’t have that kind of problem. Debt is not good folks. NO matter what kind it is. Even if it is owed to you there is no guarantee you will get it back.
My daily lesson: if you give money (“loan”) it to a friend, pretend and imagine that you will never get that money back. Remember, we are not FNM or FRE.
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Sometimes I say short term trading is smart in this market. When I say short term I don’t mean as short term as daytrading. More like a swing trading style of buying lows selling highs in trending stocks. I think an intraday chart of the indexes on Friday show that making money is not a smooth steady process. It is a lucky “cover you but and get long or get short for the quick drop and cover as the stock will soon be rising again” It is just too nutty to be fully inveted on 7% margin rates 4 to 1 right now. Easy reminder: look at trend of current market past six months? Does the trend look similar to the late 2002 to early 2003 trend? I don’t think so. The trend is NOT up and there are clearly not more up days on HUGE VOLUME compared to down days on very low volume. March to May 2003 is so beautiful and the amount of charts that had green to max green BOP with huge volume accumulation was so amazing then. I seriously can not wait for a bear to ravage this market so we can start fresh from a new bullish perspective.
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Just because we are oversold doesn’t mean we can not get more oversold. Some of the worst selling happens in low volume oversold markets. It is weird but it can happen.
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why are people still trying to GUESS the bottom. Don’t we remember the JERKS@!!!!! like Sandy/Wendy who told me I was going broke and that everyone that read me would soon be missing out on a great bull market…well I wonder how that “must buy” of LEH is working out now. I know LEH sure must be hurting if you don’t cut your losses. I never buy stocks in downtrends for reason like that or ABK, PMI, IMB, or any of the other stocks down 90% plus the past year related to the mortgage problems.
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Earnings season is starting this week. OMG. This should be fun. If you are VERY long a stock that has been in an uptrend for a long time and it makes a run going into earnings please make sure that you look to take some profits in. Also do NOT LOAD UP ON A STOCK BEFORE EARNINGS, in this stupid crazy mixed market environment. Why put the odds against you?????????????? 95% of the time I go insanely out of my way to make sure history has ensured that my trade has a very high chance of working.
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It is going to be a busy week starting Monday. REMEMBER DO NOT BUY THE EARNINGS BS. KEEP YOUR CASH LEVEL HIGH
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After a nasty little selloff (almost 20%) from the November top a LOT of ppl think that we have sold off and are “inexpensive.” We will see how much that changes after earnings are announced but with stocks selling off INTO the earnings announcemnts I have an assumption things could get ugly.
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Oil is now in a range bound wild intraday movment area also down to $144 again from up to $147. Same volatility that is associated with most tops (long or intermediate–you never know until hindsight)
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WE NEED TO DRILL FOR MORE OIL!!!! YOU WANT PRICES TO DROP: Announce we are building 10 more refiners, we are opening ALL available land that can be explored and is known to have recoverable oil, lower taxes to oil companies that go drilling, and pay tax payers some of the profits from that oil. Watch oil drop $10 to $20 overnight. Don’t hurt the speculators idiots!!!! Find a way to get them out. The speculators know the enviro nuts and their money is going to keep oil locked up. It isn’t their trading stopping oil from falling. Why do so many believe the extremely liberal media so much????????????
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Where I go when I get staph from surfing our dirty Hawaii waters, the market blows, or the surf is flat (and ESPECIALLY WHEN ALL THREE ARE UPON US): http://www.surfline.com/home/index.cfm
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wow higher gas prices could cut auto deaths up to 1,000 a month. Enviro nuts must think the car manufactures have “blood on their hands.” Way to save th world nut jobs. I like these people but politically (hippieish kind of people) the ignorance is intollerable. Just like their hate for facts and charts. I am surprised at how many liberals I have making money off this site. Just because I HATE the left policies doesn’t mean I hate the person. BUT WHY DOES THE LEFT ALWAYS try to make it LOOK like that? I don’t hate anyone unless they attack me…then the gloves are off…I love MMA and believe it is intelligent to know how to fight correctly. Being able to save your life from a life-and-death situation is something us Americans take for granted.
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Online ads are even slowing down.
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I see that we are expected to spend even MORE money on clothing, shoes, apparel, and computers…maybe 2009 is the year for retail, computer, and other growth stocks. Maybe it will be time for the banks to come back around also. Just something to ponder while we save our money from the possible carnage.
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I still hate BKE and BRKR. But EZPW will probably be a stock I profile on the websites this week.
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I sure am having a hard time finding almost any funds up 100% over the last five-years right now, minus CGM Focus, of course. If the greatest mutual funds, like Columbia Common Stock Z have turned $20k into $14k and other funds like AIM Charter have gone from $20k to $15k the past five years…don’t be too upset if you are not doing too well either. Like I said, for the first time, I STARTED OFF LUCKY BY BUYING BREAKOUTS IN 96 and 97 also, I have racked up losses in two smaller accounts. Small losses but losses none-the-less. However, If I ever have a fund I now know why more go mutual fund. They don’t have to make money to keep making money. They just raise the fees. As for hedge funds they must perform or else they don’t have a job for very long. Eventually, one day, my surfing days will be over and I will open a hedge fund..why a hedge..because I KNOW I CAN MAKE MONEY. I will not have to nickel and dime everyone. I will just do what I do so well. And with a team helping me, the returns should be better as they keep me from making a few silly risky trades.
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this market is CLEARLY lacking leadership as the number of stocks in the IBD Your Weekly Review and CANSLIM Select are contracting fast! That is, along with the shape of the bases tells me that it is time to just wait and keep that cash riding until DGLY and PDO bases show up everywhere.
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IBD 100 index vs SP 500 index from May 2, 2003 to July 4, 2008 has the IBD index CRUSHING!!!!! the Spoos 219% to 35.8%. How has your port done? Do you know how well Cramer’s Action Alert port has done? Not nearly as well as the IBD indexes.
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For everyone that THINKS (but the facts are very clear that we are not anywhere near cheap) that we are we are going to be seeing at a cheap p/e ratio on the DJIA with an 89.9 reading. However, this is much better than when on May 29, 2008 it sported a 102 p/e ratio. How ridiculous is that?. It is all those banks and their poor numbers.
This is one thing we don’t stress enough here (no we do, just being sarcastic) is the fact that EVERYONE should be heading over to the .com site and reviewing all the previous BIG WINNERS. Study those patterns, burn them into your head.
No questions asked…just go there NOW!
http://www.bigwavetrading.com/category/investment-longs/past-big-winners-longs/