Another Horrible Session Leaves Bears Dancing And Bulls Trying To Find Their Head Which Was Cut Off By Those Dancing Bears; Look For A Bounce But Nothing More As Market Is Getting Oversold
January 17, 2008
Pick any of today’s headlines and all you will see is carnage. In fact, I can not remember such a horrible news day since 2001. When it came to a string of poor headlines it simply doesn’t get much worse than seeing the housing starts fell 14% to levels not seen in sixteen years. That is insane! That was just one of the problems as the others were just as bad. The Philly Fed Factory index fell to -20.9 its lowest level since October 2001 after the 9/11 attacks. And not only did MER severely disappoint with the worst earnings ever but ABK fell 52% proving that buying falling knifes, bargains, can’t pass up, and value stocks is just a FOOLS game in a bear market. WAKE UP YOU JOHNY-COME-LATELY BULLS!!!!!!!!!!!!!!!! THE TREND HAS CHANGED. ALL OF THEM: SHORT, SUB-INT, INT, AND LONG. THEY ARE ALL DOWN!!!!!!!!!! WAKE UP!!!!! DONT BE AN ARROGANT FOOL…..WILLPS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
The SP 600 is now down 21% from the highs in October to now, officially putting this market in a bear market. Being down 20% is the threshold and the fact that this index led us up and is now leading us down below the 20% mark should wake you up to the fact that this market is junk and should be avoided at all cost.
Included in this small cap mess is the top IBD indexes. Both the New America and 100 index show that the Acc/Dis rating has fallen to the worst level possible of an E. Not only that but every single major market index has at least a D-. This is one ugly market and I do not know about you but I have done very well–but not NEARLY as well as I should have. The rest of you, however, appear to be doing wonderful as I have heard many of you mention you have NEVER made money like this before. Congrats! If you thought the gains were good, you are right. Shorts, when they work, produce a lot of gains fast.
But just wait till this bear market is over and gives way to TASR and TZOO stocks. When that happens, you will not make money as fast but the gains will be much bigger. However, by constantly rotating from the best shorts to the next best shorts you can make a lot of money similar to a longer-term bullish holding.
If you are looking for those longs, you probably wont have to wait too much longer as we are very oversold and our due for an oversold–and nothing more–rally. Many things are FINALLY starting to line up in that favor. Rather it is the exponential moves a lot of shorts are making it is the recent sentiment gauges that are finally starting to show the FIRST whiffs of fear in the selling that we have seen off the market highs.
The investors intelligence survey came out yesterday with the bulls coming in at 45.6% and bears at 26.7%. Now, while this was a good move it is still no where near where it needs to be to confirm a real bottom. At a real bottom you get 35% bulls and 40% bears. We are no where near this. In fact there were more bears and less bulls during the August bottom which we are now WELL BELOW. This is very disturbing and if you are thinking of going long here you should check the numbers to show you how FOOLISH you are for wanting to buy stocks that have pulled back to “bargain” LOLOL levels here. Keep buying those dips in a bear market and it wont be long till we are singing a farewell song.
Besides the investors intelligence survey clearly telling us that the crowd is STILL bullish despite all of this massive selling, the VIX has finally started to move!!!!! YIPEE!!!!! Hurray!!!! wooooo wowoooooo. The VIX popped a WHOPPING 16.7% to 28.46 which is STILL well below the old highs in August of 37.50. Until we touch 37.50, don’t even THINK of calling for a bottom. You can look for oversold bounces but there is no way in H-E-double hockey sticks that the indexes are going to put in a real bottom with a VIX lower than where it was in August and with all these stocks breaking down in absolutely every single sector. You name a sector, it has been taken out to the woodshed.
Look at all of the leaders from 2002 to now: China, solar, oil, steel, technology, shippers, ag, chemical, and gold bullion. They are all cracking like a crook under the interrogation lights. You can buy all the bargains you want in these BROKEN stocks that are selling off on HUGE DISTRIBUTION. You can play this AMATEUR!!!! game, if you want. But when the next bull market comes while you gain a PATHETIC 25% in five years in your LOST leader turned LOSER (like DRYS will be), we will be going long the next TASR and TZOO. So enjoy your 25% gain in five years. We will enjoy our 1000% gain in one year and following 500% winners the next. The new bulls ALWAYS unleash new leaders. Not the same old RIMM, BIDU, TNH, or DRYS. They will be new names YOU HAVE NEVER HEARD OF BEFORE or names you are just starting to hear. One thing will be in common though: they will all probably be under eight years old from their IPO.
Some of you, however, may never “get it.” And that is fine. However, I suggest you throw your ignorant ego away and start learning HISTORY AND WHAT HAS PROVEN TO WORK. I don’t use the CANSLIM method for no reason. The greatest stocks are ALWAYS found before their biggest moves using the strategy I use. You should never miss a HUGE winner EVER. That is unless you are not paying attention; then you could miss them all.
Cash is king, boys and girls, until we get a follow-through day with a ton of high-quality $20 or higher, 100k shares avg daily, with max green BOP all over it stocks that are breaking out of perfect round well-formed bases. Once we see this, then we can change our bear suits for bull suits. But until these nice charts show up, my paws will continue to swipe lower at these once great leading stocks from the 2002-2007 bull market. The bull is done…get over it.
Aloha, God bless, and I will see you in the chat room in the AM.
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15 Comments »
oh no! not the way to get recognized on my first day back! so I’ll prove my bearishness here and now. I’m going to - Short CNX on the rally after it breaks above the 50 day briefly during tomorrows lil rally, yes I will, and SGR also same scenario on the rally. Or you could short FWLT, have you ever shorted a split? It’d be interesting. But I refuse to short DRYS. And I like CPST and SIMG (long! based on fundamentals and technicals) but won’t keep them. Now. =]
Will are you smarter than the market? There is a ton of distribution in that chart…where is the buying interest? CPST and SIMG wtf?
Glad you are with us now so we can help you out.
Josh,
My cardinal rule for this market is, “Whatever you do, don’t go long.” I think I can pick shorts pretty well (FSLR, FLR, SKF), but I’m counting on you to tell me when the bear market is over. Which book is best to learn the indicators for a bottom?
Hey Owen, it would probably be William J. O’neils books combined with some good wise lessons from reminisces.
Josh is good at picking the tops and bottoms because he knows how to read sentiment and charts. He has done this for years. Sure, distribution days, VIX, Put/Call will help but they are nothing without the chart reading…. which will come with practice
Josh - “start learning HISTORY AND WHAT HAS PROVEN TO WORK”
Thank you Yoni
I have a book section. They will all help you learn to spot bottoms but my protege is correct. It is How To Make Money In Stocks by William J. O’Neil.
Spec - I just like those stocks based on what I see as inevitable success of their businesses, and they fact they were holding above where I bought them pretty well, until I sold them, which I did. Still don’t have any positions but I’m looking for CNX SGR to short when the rally develops. I’ll keep watching them on the back burner for sure.
CANSLIM CANSLIM CANSLIM
2005: LOS ANGELES — In the latest independent study that compares over 50 top investing strategies, Investor’s Business Daily’s CAN SLIM methodology continued to outperform. CAN SLIM returned a compounded growth rate of 849.1%, versus the S&P 500 gain of 22.8% in real-time results from January 1998 through June 30, 2005. CAN SLIM was also named the best growth performing strategy so far this year. Studies are conducted by the American Association of Individual Investors (AAII), and are available at http://www.aaii.com.
……by the time 2007 came around….
O’Neil’s CAN SLIM
Return
YTD: 30.4%
Total: 1521.7%
if you are not getting these kind of returns, will, don’t you think maybe YOU should learn what historically has PROVEN to be the best way to make a TON of money.
and also your SIMG and CPST is pure SHIT!!!! Don’t buy stocks under $10. You get what you pay for.
Mercedes, diamonds, anything that is worth anything cost a lot of money.
Never short DRYS…that is ignorant. Thanks for showing everyone HOW NOT TO THINK
you love CPST and SIMG long term…..LOLOLOL you sound like every other donkey who believes in the hope that their shit company will come back around. These stocks are dead!!!
Everyone else, but the “genius” WIllPS, should stay FAR away.
Stick with a winning system: CANSLIM
stay away from loser newbie traders.!!!! with ignorant opinions.
LEARN WHAT WORKS BEFORE OPENING YOUR MOUTH.
You are unbelieveably foolish, Will
“what you see” DOESN”T MEAN SHIT TO WALL STREET.
You are going broke buying shit like that! Have fun!
Why don’t you learn history? Why are you buying stocks below the 50 day moving average? What a losing and pathetic system.
You will NEVER outperform anyone here, trading like that.
Will, I dont think you should make another trade for a minimum of 365 days. You are the most dangerous newbie I have ever seen and I am disappointed more of my mature and experienced readers do not give you a lashing.
Instead….they are just waiting for you to go broke. I am trying to save you. But people that are going to kill themselves anyway….maybe I shouldn’t try.
I am wasting my time because I know you either will NOT go here or you will go here and not focus or pay attention.
But anyways WILLPS go here and scroll down to the growth strategies and why don’t you see for yourself how DOMINATE this strategy is.
Or do you like being a GIGANTIC FOOL?
http://www.aaii.com/stockscreens/performance.cfm
Driehaus 9-yr return is 152%
Foolish Small Cap 8 9-yr return 480%
IBD stable 70 9-yr return 183%
Investware Quality Growth 9-yr return 73%
Return on Equity 9-yr return 346.7%
CANSLIM revised 3rd edition 9-yr return 743%!!!!!!!
CANSLIM original 9-yr return 1,521%!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
SIMG since IPO return -78%
CPST since IPO return -98%
GREAT STOCKS YOU FOUND THERE WILLPS. WHAT A JOKE!!!!
EBAY is up 2000% from its IPO
that is the difference between a diamond (EBAY) and crap (CPST SIMG). To zero before 10 on both!
btw, there are two strategies that beat CANSLIM but they are growth/value:
Strategy Price Change
YTD* 2006 2005 2004 2003 2002 2001 2000 1999 1998 Total
O’Shaughnessy - Tiny Titans 2.2 35.2 7.5 45.8 154.8 51.9 84.1 -6.6 53.8 38.1 2960.9%!!!!!!!!!!!!!!!!
Zweig 20.7 18.6 27.8 49.5 88.8 16.9 57.9 46.2 17.1 54.5 2418.5%!!!!!!!!!!!!!!!!!!
O’Neil’s CAN SLIM 30.4 29.5 24.1 -3.8 79.0 20.5 54.4 38.0 36.6 28.2 1521.7%!!!!!!!!!!!!!!!!!!!!!!!!!!
Those are the top 3: 2,961%, 2,418%, and 1,522% are the top three returns out of 55 strategies research every year since 1998
This discussion made me take a look at the charts of CPST and SIMG. Holy Crap! WTF? Why would anyone in their right mind have this junk on a watch list, let alone actually own any of it?
Because WillPS is an arrogant self-absorbed newbie who is trying to show us how much of a genius he is by trying to pick something that will one day “listen to him and be worth a lot of money.”
We have tried to tell him before how silly he is but watching his “prediction (LOL)” fail will be a costly lesson. And if he doesn’t have money invested in them, then why do you make those kind of predictions. Do you think anyone will remember even two months from now? Well they will… they will remember the new guy who thought he could predict the future, just like all the other people who failed in the market.
WillPS will go broke or he will wake up to how all of the greatest traders traded. I hope it is the ladder and not the former.
To say something ALSO as “I will never short DRYS” is just another example of a completely NEWBIE thought. There is no such thing as a stock that can or can not be shorted that trades over $10 a share.
I hope DRYS goes to $3 SIMPLY to prove you how foolish your “predictions”–we call them delusional visions–are.
He probably should “refuse to short DRYS,” as he’s already missed the entire move from $130 down to $50…
very very true. no kidding huh? I am SURE he was saying to buy it at 110 120 and 130 and said to buy it the whole way down to 50. How come now he would never short it? Because you missed the FIRST move. Trust me, there is more hurt coming. This stock is BROKEN. Bye-bye DRYS and bye-bye irrational self-absorbed history depraved traders.