Another Wild Intraday Session Ends With Not Much Happening By The EOD; Cash Is Still King In This Low Volume Market
March 31, 2008
It is hard to continuously say the same thing over and over but it is true. There is nothing to do in this market other than to keep your trades small and your cash high. Especially, if you are a perma-bull as we are now finishing the month down for the fifth time in-a-row. This is much different from anything we saw from 2003 to November 2007.
I know a few traders that for some ungodly reason were bullish after today’s close. This was because they said the Fed has a new way of making sure the market has bottomed. Once again, the same market call but this time from different players with a different excuse. No matter how many people try this argument with me and no matter for what reason it is, I simply will not believe it until it is true. When I see the market making strong gains on strong volume with top stocks breaking out and moving higher (heck there doesn’t even have to be heavy volume on the indexes; I just need some HOT freaking charts, for God’s sake), then I will wrap my arms around this market just like the perma-bulls have been the entire way down.
The right thing to keep on doing is raising cash with stocks that we are cutting our losses on or taking profits on and to keep the new buys or shorts small until a trend is clear. Right now, the market has no clear trend as a low volume trading environment has now entered the stock market which could help build some nice bases. However, nothing is hinting at that what-so-ever as few NEW and FRESH stocks are forming bases after a previous uptrend in innovative companies with great fundamentals.
Instead, it is the same bear-market crap showing up in my scans that always show up when the market is in trouble. Medical, finance, and energy stocks always lead the way in bearish markets and here we are with our three usual bear market leaders. For those that still think we are going to bottom, you need to get your head examined, wake up, and take a look around at all the past-leading stocks. It is not good.
If you are a value player and you take a look at the DJIA’s p/e at 61, how can you buy stocks that are this expensive? You can’t unless you are insane. If you are a growth stock investor and you take a look at the GDP growth of our country combined with wages and inflation, how can you invest? You can’t unless you hate holding on to your money. This is simply a horrible environment for bulls and bears.
That might make you think that things are bad enough but a VIX at 25.61 and a put/call at .87 IS NOT bullish. Everyone might think the market is volatile now. But you are comparing it to what? 2004, 2005, and 2006 which were had the two least volatile years of my trading life. Only 188 stocks made 100% gains in 2005!! Worse, that trend stayed the same in 2006 and 2007 with only 219 and 212 making those kind of gains the next two years. 2004 produced 269 but even that is pathetic to what bull markets produce.
Some of you are crazy. You think you are somehow missing something by being in cash. You foolish investors have no freaking clue how to handle a bear market and receiving questions like this is pathetic. To not understand that there are less stocks making big gains in down market compared to up markets is freaking foolish. If you are that stupid and do not understand that, PLEASE stop reading me and never come back. I do not have not time for that crap (I received an email today from someone wondering why I can’t find the good stocks now). You simply can not find HUGE stock market winners in bear markets. The fact that I can find any that make huge gains is a miracle in a market like that.
Some of you newbies have no clue but I have been writing on the internet since 2005!!! at my blog. If you just go back to 2005 and 2006 (April 2006 to May 2006 to see the bulk of the gains as that is where the market topped), you can clearly see some of my huge past big winners in this SHITTY low volume market since 2003. GIGM, CVO, BOOM, KNOL, AAPL, ERS, AUY, TGC, SLW, BTUI, WIRE, MFLX, ASF, CBG, RATE, MNG, MRB, NXG, VGZ, TSCM, NVDA, and ZEUS and many others all produced 100% gains. Who else did that that you know during 2005-2007? Even at the end of 2007, we had a great chart in APPY. That was a 125% to 150% gain from September 2007 to late October 2007. So the reason “I am missing them” is because THEY DO NOT! EXIST. 
DUH! 
The fact is they do exist, they just do not exist right now. When this stupid sideways chop/bear market is over, there will be another bull market and it will unleash a ton of big winners. But instead of just getting 100% to 300% with a few 500% major winners, we can finally get our 1000% to 2500% gems that I WILL FIND BECAUSE I FOUND THEM IN 1999 and 2003. Back in 2001 there were only 357 stocks to rally 100% or more (most of that was due to the vicious oversold rally after that horrific day) but the next year in 2002 when the bear market put in the final touch to its downtrend, there were ONLY 127 and the funny thing is that about 80% of those made those gains from November to January.
What is important to remember is what happened the next year, in 2003, as the new bull market got underway. A whopping 931 stocks made at least a 100% gain. So as you can see trying to find a great stock when only 127 move that much compared to 931 is a much more difficult task. So far, in 2008, we have a whopping 13. At this rate we will only have 52 stocks up 100% this year. This is out of a universe of 7,000 to 8,000 stocks in between 2001 and 2008.
That little exercise there should help prove that it is much easier to hit the home runs in bull markets than it is during any other market. Since most of you NEVER know when we are in a bull, bear, or nothing market, it sure does help to know what you are in so you know when to go ALL-IN with your margin. I will know. Will you?
I also know that the IBD 100 has a D- for an Acc/Dis rating and that is PATHETIC with a capital P! These are our leading stocks and they are clearly being distributed. There is no reason to ever buy stocks until this index can at least hit a C. So all of you buying stocks now are making very foolish decision. The same can be said for those shorting stocks willy-nilly with no regard for a chart.
The good news about this market is that I know when it is best to take vacations. When the market is ripping higher like it was in late 1998, late 1999, and in 2003 you want to be very involved, awake, and long stocks in the bull market. But in a market where stocks are clearly out of favor and are being sold, it makes no sense to stick around and watch the damage. Instead take some time off to have fun, making sure you keep on top of your watchlist and index charts so that when the market does turn you can wake up and get back to work.
Eventually, this market will turn. However, until it actually does, trying to predict is is FOOLISH! Waiting, watching, and building your watchlist in this poor market environment is the smartest thing to do until we get a bunch of charts that look like my ‘past big winners’ showing up.
This is NOT to say that we will not see any longs if we go nowhere the next 10 years. What it does mean is that there will be very few. Only two CANSLIM quality perfect setups worked in 2007: AFSI and TESO. There was also one speculative that worked extremely well with a perfect chart: APPY. However, there were another 5 perfect to near-perfect charts that failed and those failures did not even come close to hurting the gains made by the winners. This is the power of this CANSLIM strategy. Good money is constantly poured into the best performing stocks while losses are dealt with immediately.
No matter what happens in this stock market, I am ready. If we rollover and breakdown (with or without volume) in the stock market, I will start to find stocks failing at key moving averages or breaking down below key areas on very heavy volume. If I can get these within a safe buy point (usually 5% within the pivot), then I will be more than happy to increase my short positions.
If the market bounces higher and volume starts to come-in in the form of accumulation days that then help create beautiful chart patterns in strong stocks with great fundamentals, I will have no problem going long stocks breaking out of or bouncing off of my favorite chart setups.
It was nice to see oil fall $4.04 to $101.58 today which is a LOT better than the $110 it hit not to long ago. That along with the other commodity charts looking like they are putting in significant tops is, I think, a longer-term bullish development as it helps move “safe” money into more “speculative” investments. it will not start immediately but getting money out of this sector into a more high-growth (like solar stocks) area is what will start to get me excited.
And the last thing I would like to mention before I go is SGP. I have been short SGP since 1/14, I wrote a column to RM.com readers on 2/1 telling them to avoid SGP as another possible Cramer blowup, and today I watched it collapse as a near 50% gain has been realized in less than three months. All the while, Cramer was telling you to buy. I told you to run from C, I told you to run from IMA (after I made a 100% gain), I told you to run from SGP, and I am telling you to run from NYX.
The CANSLIM strategy helped give me gains in IMA on the way up and helped keep me out of C, NYX, and IMA on the way down. My own study of past shorts from the “How To Make Money Selling Stocks Short” by O’Neil helped get me into SGP for a near 50% profit. The IBD 100 has returned 195% to the S&P 500’s 42.5% since May 2, 2003. The IBD 85-85 index has returned 133.7% to the S&P 500’s 2% since Jan. 1, 2001. How is Cramer’s Action Alert portfolio doing? I think I know.
Aloha from Maui where the surf is flat again and the whales are starting to say bye-bye to another great winter season of surf and whale watching. ALOHA!!
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You follow thi guy, you are going to loose money. Market up nicely, the bottomw as yesterday; go ahead and buy do not listen to him
Wendy. If you go to http://www.mauitrader.blogspot.com and go look at EVERY major turning point, you will see I am NEVER wrong. 2005 up and down, 2006 up and down, 2007 up and down. I have more 500% winners than ANYONE I HAVE EVER MET. So kiss my ass!!!
So I doubt I am wrong this time. And if I am, unlike you who will be caught looking like a freaking IDIOT!!! I will have turned gone bullish in the leaders, passed you up via returns for the year, and then will be on my way to buying a place on another island while your pathetic life wherever you are keeps on sucking.
Stop being such a donkey and go read my history at http://www.mauitrader.blogspot.com
Even if this is the bottom, I WILL CRUSH YOU WITH THE RETURNS I GET FROM BUYING TOP STOCK.
Wendy you are an idiot and you are the EXACT OPPOSITE of how EVERYONE should be trading.
This is the bottom? So what were the other 6 bottoms you called???????????????????????????????????????????????????
You WILL NEVER LOSE MONEY WITH ME!, IF YOU ALWAYS CUT YOUR LOSSES AND LET YOUR WINNERS RIDE
Comments like this just show you the pure ignorance some people have about the market. I don’t know how many people are making money following your advice, but I can tell you there are lots of people benefiting by taking Josh’s.
You’ve probably been calling a bottom since November and picking LOSERS all the way down.
Don’t swim against the current if you want to win the race.
Wendy…if we follow this guy? We are long in the market, making money…what evidence do you have?
You must have something? Or are you like a Liberal Slinging mud with no basis?
I am curious.
And what should we buy? the market.
typical stupid newbie crap!!!!!
Have you studied my ‘past big winners’ or seen all my HUGE winners from 04, 05, 06, 07, and 08???
Grow up!!!
I am not a newbie, i ahve been trading longer than you..Anyway I have to run to the Yankees Standium for the game betwwen Yankee and Toronto, I wish I have more time.
I can you discuss my stratergy if you want and it’s not based on canslim and I bet you I get better return than you
I do use telechart, anyway please stop the name calling
I have been shorting since last year october I am telling you this “might ” be the bottom
Nobody in wall street can call top or bottom and I am not trying
So far I am up 42% since Jan because I learn to read the market
Go Yankees
If you walk like a newbie, talk like a newbie, and smell like a newbie… then by God you must be a newbie
This is why i hate having this public. Idiots like wendy can just post here and post whatever BS they want.
If you have nothing CONSTRUCTIVE to say, stay away!!!!
Josh,
You are my inspiration. After reading 24 Essential Lessons and thinking I knew what I was doing I subscribed to IBD 3 yrs ago, and lost every time. Thought it couldn’t be done. I found your site as I was chasing TIE long to the bottom and you posted how you were short. I am a newbie and will learn from a pro. Read and re-read about the CANSLIM method, learn the charts, become a member. You have proven it works. Thank you for your patience.
Joshua Hayes you do not know me and calling me know.How is tupid ? I spent more time studing the market than you , trut me.
I have been trading for living 15 years know..ok
I think you are to bearish and too stupid
You do have some good point and calling top and bottom is hardest thing in wall street.
Moron things are turning and by the way I never sent you 1 email
I made $43000 today, if I was listenign to you, I would be on the sideline
Bull makes money,Bear makes money and Hog get slaughter.
By the way do not compare yourself to Cramer ( by the way I hate the guy), he made a lot of money you haven’t
He’s know around the globe you are not.I go one more and more
You are incorrect in the first sentence you make. Joshua has been trading for 18 years (http://www.bigwavetrading.com/about/) perhaps you should do at least a small amount of research before you make claims. I imagine you’re trading mirrors the same things.
If you agree that calling a top or bottom is the hardest thing to do then why are going doing it? Maybe we are at a bottom, maybe we aren’t, a smart person wouldn’t jump to conclusions and toss all their money in. “CASH IS KING”.
I made $10000000000 today listening to Joshua. See I can make BS claims with no backup too.
Anyone can go on TV and get famous. I could go yell and make terriable picks and maybe people will know my name. Doesn’t prove anything.
On account of all your terriable baseless and sometimes false comments I personally hold your comments with 0 weight.
Listen I made money on GS and leh today ok.I traded urs and byi too
Not need to lie..Good uck budd
I’ll tell you what… come here tomorrow after the close and I’ll tell you my picks for that day…
Did I mention I bought YHOO 5 seconds before the MSFT offer was announced and shored Nortel right before the scandal… see it’s easy
LOLOLOLOLOLOLOL
GS
LEH
BYI
URS
EVERYONE GO TAKE A LOOK AT THOSE CHARTS AND TELL ME IF THIS IS A SMART WOMAN!!!!
WOW!!!!!
UGLY UGLY UGLY CHARTS. SHE WOULD HAVE MADE A LOT MORE MONEY HAD THIS CRAZY LADY BEEN SHORT THE DOWNTRENDS AND JUST NOW COVERED. INSTEAD OF GOING LONG AGAIN FOR THE 5TH TIME IN THE PAST MONTH.
WTFG!!!! YOU FINALLY GOT ONE RIGHT!!!!
WOO HOOOOOOOOO
GET OUT OF HERE
I DONT CARE ABOUT YOU.
YOUR STUPID COMMENTS ARE NOT HELPFUL!!!!
TOO BEARISH???? I AM NEITHER A BULL NOR A BEAR, TWIT!!!
YOU ARE CLEARLY A FOOL AND STILL!!!!!!!!! HAVE NOT REVIEWED MY PAST WINNERS OR MY 2005-2207 RETURNS!!!!
http://www.bigwavetrading.com/category/investment-longs/past-big-winners-longs/
WENDY, YOU ARE AN IDIOT AND I PREFER YOU STAY AWAY FROM HERE.
I DON’T LIKE YOU.
CRAMER IS A LOSER. SOON HE WILL NOT BE KNOWN AND I WILL BE.
I HAVE ONLY BEEN AROUND ON THE NET ON THIS SITE FOR A YEAR BUT HAVE BEEN AROUND ON MAUI SINCE 2000 AND IN NYC SINCE 1998.
Joshua,
I have been following your analysis and studying your past winners in an effort to better educate myself and hopefully evolve into a smart investor.
Please disregard foolish posters as there are many out there that appreciate the insight you bring forth daily. Anybody who is a true CANSLIM student knows that you definitely know what you are talking about. Keep up the good work and I look forward to subscribing to your service in the near future.
Andrew
It is also obvious the idiot didn’t read that I only had 9% of my account short!!!!!!!!
and 70% in cash!!!!!
god she really is a moron.
her name is Sandy Wright and she is obviously always wrong.
She thinks i am short for God’s sake!!!!!! what a fool!!!!!!!!!!!!!!!!!!!!!!!
WHAT A MORON
IN MY COMMENTARY IT CLEARLY SAYS
9% SHORT
21% LONG
70% CASH
SHE IS AN IDIOT!!!!! SHE THOUGHT I WAS 100% SHORT.
WENDY, STAY THE OFF THIS SITE!!!!!!!!!!
sandy_wright67@yahoo.com
yeah, you never emailed me before!!!
how did i find this?
by the way funny your name is wendy yet your real name is sandy wright.
what are you hiding? besides the horrible way you trade. .