Trading Scared and with Emotions Burns Through your Capital
April 25, 2008 | Leave a Comment
In the past few days we’ve seen some nice runs in stocks and some stocks that have pulled back after gains. An example would be MTL, which we are long for those who are Big Wave Traders. Yesterday the stock was being hammered in the AM. A few members were a big frightened and had no clue what to do. Since we are not day traders it makes no sense for us to be emotional about moves intra-day. By the end of the day, MTL was down 8% but volume wasn’t overwhelming and BOP actually increased. The stock is maintaining its uptrend and has not broken down on large volume through its 50dma or 200dma. We do not panic, Jesse Livermore stated “More money is made waiting on stocks.”
This market is setting up for a big upside run. We do not want to be cutting the stocks that are making moves and rotating into laggards. Stick with your winners!
Sentiment Still Negative
April 17, 2008 | Leave a Comment
AAII and II sentiment numbers continue to show bearishness among market participants. Whether its the media and/or consumer sentiment, market participants are feeling the same way about the market. AAII saw Bulls at 30.37% and Bears at 48.69%. While II saw Bulls at 37.8% and Bears at 38.9%. II tends to be a more reliable indicator of Investor sentiment, but the AAII shows you the crowd is not very bullish.
Continue to follow price and volume, we saw some volume yesterday and charts are beginning to look better. This isn’t 2003 but we can deal with taking some gains here.
Market Speculator
Money is Made in the Wating Game
April 12, 2008 | Leave a Comment
Stocks are clearly not ready to break to the upside, nor downside. Friday’s painful % decline was not all that bad. GE’s dismal display of earnings had many on the street shaken. Although a GIANT, GE is not a leader in this market and we should be caring about leadership not who is the biggest. GE’s volume accounted for more than 1/4 of the NYSE volume, without NYSE volume would have been pathetic let alone down.
Thursday’s action was definitely a positive sign for the permabull/goldilocks crowd, volume surged while we had price gains. However, Friday’s action is showing that this market isn’t quite ready to break up/down. Jesse Livermore always stated that more money was made by waiting rather than doing. CASH continues to be KING, throwing a large amount of dollars at this market will only get your account to shrink.
We can certainly be taking small positions, we have been here at Big Wave Trading. However, we are keeping a lot of cash on hand so we can be ready for the next big bull run.
Stocks Show Some Life, as Volume Continues to Fade
April 3, 2008 | Leave a Comment
There is certainly a bullish tint on today’s tape, but the low volume continues to linger. Whether or not you believe we’ve ultimately have bottomed, you can not deny the fact that institutional support here is VERY WEAK. Until there is an indication of institutional support this rally will remain suspect.
I would like to see gains on heavier trade and low vol pull backs. Yesterday we got just that, but up volume days continue to be below the 50dma. This market needs many follow-throughs to confirm the action. This isn’t the time to be fully margined, this ain’t March 2003!
Stocks Poised for a Positive Close
March 31, 2008 | Leave a Comment
Stocks are acting like they have support going into the quarters end. The real issue here is with volume. As of 11:35 volume appears to be lower than the run rate on Friday. Not much support for the bulls here, institutional buyers are simply not stepping up to the plate to support this market.
If we continue to move higher and on continued lower volume it will spell trouble for the market. The lack of accumulation is not astounding nor is it surprising to me. This was and still is a classic bull market bounce. No volume and clearly driven by oversold, short covering conditions.
Tomorrow’s session should be more indicative of the action going forward. Lack of volume the past week of action is indicating to me that more selling is just over the horizon.
Stocks move higher without steam
March 25, 2008 | Leave a Comment
The collective yawn you hear is coming from today’s stock market. At 3:55pmEST volume looks to be lower by 10-15% across the board when compared to yesterday’s volume. This is definitely not the type of bullish action you would like to see in a confirmed market rally.
Mid-caps are leading the way along with the NYSE composite index. Boring markets are hard to guage, price action is bullish but with such a dry up in volume. It is hard to get any excitement out of today’s gains.
Dow Follows Through; Issues Remain
March 21, 2008 | 1 Comment
IBD has called Day 8 of the Dow Jones Industrial average a follow-through day for the market. This ultimately confirms the most recent rally attempt. It takes only one index to follow through to confirm a market rally regardless if any other index takes out its most recent low.
I am not as bullish in the short-term has Joshua however, I do believe we could see a rally. Ultimately, I do believe that this rally will fail at some point in the near future. New Highs are not turning around, New Lows continue to dominate and the number of stocks above their 200dma continues to be lower than stocks over their 20dma and 50dma. Ideally, you want to see more stocks above their 200dma. This would suggest that a long-term uptrend is in place.
Although we are in a confirmed market rally, there still remains the high risk of this rally failing. Cash is King and longs should be kept small.
Big Wave Trading Fantasy Baseball!
March 20, 2008 | 1 Comment
Big Wave Trading has set up a fantasy baseball league with a live draft!!! Its a few days away.
HURRY!!!!!!
League ID: # 51536
Password: stocks
http://baseball.fantasysports.yahoo.com/b1/register/joinprivateleague_league_select?.scrumb=
Just click on this link and enter the ID and password!
Best of luck.
Brokers and Mortgage Lenders Dominate Trading
March 19, 2008 | Leave a Comment
Are you excited that the group leading Tuesday trade was the beaten down stocks? Oh yeah, the leadership we do not WANT.
Volume and VIX continue to show that we may not have seen our ultimate lows. The drop in the VIX yesterday tells me the willingness for the market participants to believe we have bottomed. This is very dangerous and toss in a lower volume massive rally. It only spells trouble for those who throw their eggs into this market’s basket.
The Easter Bunny is not always so nice.
Market Speculator
Volume Not Following the Rally
March 12, 2008 | Leave a Comment
Volume is running lower than yesterday’s, @ 1:07pm EST pace. Ideally, accumulation will immediately begin after the first day of an attempted rally. At the moment this market is a complete bore! It would have been nice to see volume racing higher today to begin the bottoming process.
We aren’t seeing our bottom. Why? Look at some of these numbers:
New Highs (today): 46
New Lows (today): 202
VIX: 26.02
VXN: 28.80
New Highs continue to be dominated by New Lows and VIX and VXN continue to show the lack of fear at the recent lows. During market bottoms we’d see VIX and VXN race higher with New Highs crushing New Lows. We aren’t at the point yet.
Cash is King
