A Really Strong Rally Loses Some Steam Into The Close But Still All Indexes Closed Higher On Higher Volume Which Is Always Nice To See; Leaders Are Lagging But Our Longs Are Still Doing Very Well

March 31, 2009

It was a very bullish session from the open to the highs of the day. However, before the market could end at the highs, it decided to have a pretty big pullback into the close. The good news is that stocks still finished higher than where they opened and compared to the day before all still put in a 1%+ gain on volume higher than the day before. I don’t think you can ask for more, after two nasty days of selling. The good news behind the selling was the below average volume on the selloff. That is always a positive.

More of a positive during the pullback and after today’s up session are the stocks we are watching to go long. Besides one long that we have that we need to fully sell with a small loss, the rest of the stocks we are long still look anywhere from good to great (which is a HUGE change over the past 1 1/2 years) and there are a lot of stocks setting up in nice bases in speculative names and CANSLIM quality names.

That makes this current uptrend the NICEST uptrend, so far, since the selloff started in October 2007 (never forget I made the “sell all your mutual funds/stocks” warning in November 2007) and that is a great positive for our methodology which focuses on holding stocks for the full BIG WAVE of an uptrend or downtrend. We are looking for doubles to home runs, not singles, sorry. That means swing trading and intraday trading are not something that I specialize in because neither one of those strategies can give you the kind of gains that I produced in market uptrends with the downtrends combined. I am sure by the time I am 40 (another 10 years) things will be going very well for me. That is unless the economy collapses, then it will not be good for anyone.

However, if that happens, I have a contingency plan, and can not stress how important it is that EVERY YOUNG INVESTOR READING THIS SITE should have one. My plan is, from now on (well from a little while ago), is to invest 80% of my money in the stock market while 20% goes into silver and gold bullion on a quarterly or monthly basis. I know we have a LOT of really pretty charts trying to begin what could be beautiful setups but that still doesn’t change my mind that I want to be in bullion.

I have no faith in our government and the writing to Socialism is written ALL OVER THE FREAKING WALL. In fact, according to IBD, the ONLY individuals NOT worried about Socialism are those that call themselves “hard-core Democrats” which the TIPP poll now classifies as Socialist Democrats. So unless you LOVE Obama and the Democrat party, you are probably a little worried about the future right now. Don’t stress. I am too. However, all you need to do is put a little bit of your funds into the metals. If you study nations where their paper (toilet-paper) money becomes worthless you will see the price of Gold rises by hundreds-of-thousands of percentage points. So only 20% in Gold, if all hell breaks loose, will give me plenty of money to get the heck out of this country if that happens.

I like to think that that is WORST scenario thinking and not what will happen. Instead what I would really LOVE to see happen is for the US Dollar to keep rallying and for the “nice and pretty” charts setting up now to breakout or bounce on heavy volume. If that would happen, all of those past big winners, along with the other 100+ stocks I have held for 100% gains that I have not listed on the ‘past big winners’ page (you can view some of those at mauitrader.blogspot.com in the year 2005, 2006, and 2007 as I post the top longs/shorts every weekend at the end of post. All you have to do is a little searching. The proof is right there in black and white.).

If this market can continue to rally and pullback on lower volume, I would assume, like the last 14 years of me doing this, that all of those pretty charts will continue to build with some of them becoming “perfect-setups” (which are extremely rare) that will allow us to have the opportunity to make those big gains that stocks in 1999 and 2002-2005 offered us.

If the market rolls over on strong volume, then we have 32 shorts THAT ARE STILL IN A CLEAR DOWNTREND WITH NO SIGNS OF ACCUMULATION, we can make money on, while at the same time looking for new possible shorts like STRA. That short would be JUICY if the market and that stock rolled over. However, I would like to avoid that from happening and instead would love to see my longs like AIPC and ANCI (up 40% and 70% already) continue to move higher, along with the other longs that I own that have beautiful charts. One of them was up over 10% after-hours, so we are on a great start. Let’s hope this market doesn’t get April Fools fever and rip the carpet out from under us any time soon. It is nice to possibly make the BIG money in longs again.

Have a great April Fool’s Day and remember to protect your computer from Conficker C. Great luck and ALOHA!

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