Getting back to the market, I would say that today was the “official” first day of the 2009 year as Friday’s session came after a night of drunken insanity by most that deal on Broad and Wall. However, we were here spotting potential longs that might breakout soon. Good thing I work while others mess off. The working paid off and we have three very nice longs and one very good short selection. With the mixed trend and some good stock picking skills it should turn out to be a very fun market as both our longs AND shorts are working.

Recently, everything we have gone long has moved higher, while old shorts continue to hold well below resistance and new shorts actually fell today instead of rising like most recent shorts have. So our 32 small short positions are all in the clear and our 12 longs with about 3 being of OK size are doing very well. We don’t have a loser in the longs and everything has worked that we have touched this month. As long as this keeps going now that only bodes well for us 10x over when a real bull market starts or when the bear starts another leg down. Either way, as you can tell I AM READY. Unlike the talking biased billboards on CNBC. There you will only get a bull side or a bear side and you can be sure those positions are biased based on the holdings of the interviewee.

Those that do not prepare for this market to fail or prepare for this market to run are going to find themselves wondering what to do next when their biased views turn out wrong. And let me tell you, I have seen some interesting 2009 predictions that range from the market up 25% to the market down 50%. People are all over the map. But no matter what, I can guarantee that those that think the market will be up will say, if the market is down, that they were still right and something was wrong with the market. However, when you finish down 40% for the year like Jim Cramer, which so many watch like mindless zombies (yes we can, yes we can, yes we can….boyaah; robots!), you are still wrong not right.

The only way to be right in the market is if you are making money. And when it comes to day to day returns, I could CARE LESS about what you made today! What I want to know is what you made the past 3 months, the past 6 months, the past 12 months, the past 24, and the past 36 months. That is what really counts. Do you think I am going to trust my money to someone who beats it big one day out of the year and brags yet misses every other day of the year? I don’t think so.

This market is still rallying on lower volume but there is an apparent increase in volume and today it was to the downside. However, even if today is a technical distribution day by the books with all indexes down .25% or more, it would seem that the increase in volume was a bad thing today. Too bad people can’t get past the actual price move for the day and the actual price of the index they are watching on CNN or MSNBC.

If they would look past the prices you could see that volume was indeed up today but volume was still well below the 50 day volume average. Now the weighting of the average line is dropping since we have rallied on lower volume the whole way the past month. This could lead to the market’s volume jumping above average pretty soon thus telling us that the big institutional money is coming back to work in the market. If this volume jumps you can be sure I will go from bearish-overall-but-short-term-bullish to BULLISH. Why? Because we do have some nice charts setting up.

Now do not get me wrong, even after a month of rallying off the November lows, we do have some nice charts that are popping up A*** A*** E*** M*** and a few others have the price, volume, and BOP action that I love when going long a stock. However, it is totally up to the market if it wants me to go up 100% to 400% fully long or go down 100% to 400% fully short. To not be prepared for a bull market or a bear market here is foolish. The last way you can look at this market is as a bull or bear market. It is mixed.

So for now, I continue to be a bull short-term, a bull sub-intermediate term, a bear intermediate term, and a bear long-term. This means that there will be some good recent longs like our ANCI up 51% since June and CSKI up 32% since December 12th. Besides those two beautiful longs, I have another 10 longs that are all moving higher showing gains since we went long and another 32 shorts that continue to act well in perfect downtrends. They are either not breaking above the 50 day moving average on high volume or they are not closing above the 200 day moving average since their big gains.

To sum it up, my long-term shorts continue to tell me that in the future we will hit resistance and turn to new lows. If this wasn’t the case or will soon not be the case, then I will get about 10 full covers and then another 22 soon enough. By then I could be long as many as 20 stocks. But hopefully by then there will be more perfect looking stocks like HIL in 2003/HRZ 2006.

Either way, I am patient and know when to pick my spots and if I miss them another chance will come around. Do you know what the most bullish thing I saw today on a DOWN day…there were 25 new 52-week highs to 14 new 52-week lows. Hallelujah!! Do you know what I find odd? That the investors intelligence survey actually has the same amount of bulls and bears at 38.5% each. Short term it looks bullish and feels bullish but has the crowd jumped on this rally too soon with a future that looks to be headed for more troubled signs. Earnings are down seven quarters already and estimates are being lowered. That can’t be good for the economy long term.

Anyways it is amazing the crowd and professionals turned bullish so fast after a LOW VOLUME rally with LEADING stocks lagging the beaten down turds that lost tons of value. The leading stocks we are long like ANCI 51% gain, QCOR 35% gain, and CSKI 32% gain all have one thing in common. What is it? If you guessed they are all related to the medical arena you nailed it. And one of the fastest growing groups on the left side of the Investors Business Daily 197 industry group list. As you can see Medical-related stocks are flying up the list. Pretty soon, at the rate the Medical stocks are growing, we will soon see Medical stocks dominate the whole black box of the top 20 industry groups.

If you don’t remember, somewhere from May to August, almost the entire top 20 industry groups were Medical stocks. That shows you how much we love to stay healthy and make our lives better for us and everyone around us, even in a horrible bear market. Thanks to Doctor malpractice insurance, unnecessary lawsuits, and overuse of our medical system you can bet even in a down market Medical stocks will lead at some point. Some things never change.

top longs/(shorts) w/ total returns UP today: ANCI 51% CSKI 32% (CYT 57% CPRT 20% CASY 20% SPG 38% PLCE 21% CAJ 29% CETV 74%)

I guess this method works for short-term traders that have USUALLY poor results over the long term. But from someone coming from my end (a market historian going back to 1880) I believe that my analysis is all I need to believe that this rally has not a snowballs chance in Hell of succeeding for more than a few months.

The biggest problem I saw today were people actually bragging about a 3% gain today, after they lost 30% to 50% last year. Uhm, hello, (pardon the french) douche-bag, you are still down 27% to 47% the past 12 months. Nice job (sarcasm heavy). The real investors took shorts before September and went a little long off the November lows and are looking to go short when the market rallies back to the 200 DMA’s of these indexes.

Now some of you have told me that the 2005 rally and 2006 rally started on low volume. Yes, that is true. However, can’t you see that we were in a CONSTANT uptrend from October 2002 and that the low volume rallies followed low volume selloffs that were natural pullbacks in a long uptrend. The simple fact is, going back to 1880 on the DJ, you can not find one major long-term selloff that was followed by a low volume rally that put in a real bottom for a bull market to come out of.

In fact, the only low volume follow-through days I have found that have worked are like the ones in 2005 and 2006. They are ONLY coming from previous uptrends on long-term time frames. Long-term downtrends that have low volume rallies from the DAWN OF TIME has led to a further selloff.

So what is it going to take for me to get bullish? Duh. The same thing it has always taken: “hot” stock charts in top speculative and in top CANSLIM stocks. Both need to be setting up beautiful bases with low volume pullbacks, high volume rallies, and green BOP. Not only do we need bases, we need major volume on the indexes on the uptrend to give us the true support that is needed to keep stocks rallying.

This does not mean that we have to wait for the market to get above both the 50 and 200 DMA before we go long. All we need to do is see a real follow-through day with strong volume that clearly shows institutional investors are ready to get into this market. Subscribers know that I still don’t see any beautiful accumulated stocks out there besides two (M*** and A***). In the 2002-2003 bottom process at least 20-30 stocks were setting up with proper volume and BOP characteristics. This still isn’t the case.

The also thing that I have noticed is skipping from some people’s minds is that they do not understand why you can not have the gains in 2008 like we did in 2003. Well, sheesh, let’s look at a simple stat. Stocks over 100% for the year 2008 vs. the year 2003. In 2008 there were ONLY 22 stocks over 100% with the best stock EBS up 416%. In 2003 there were 898 (that remain; it was over 1,000) that were up 100% or more. How many were up over the best stock of 2008? 115 stocks. How many stocks were up over 500% in 2008: zero. How many were up in 2003 over 500%: 82 (that still exist; it was over 95). And obviously you now know nothing was up 500% so nothing was up 1000%. How many were up 1,000% in 2003: 12 (there were 15 in 2003 before some delistings).

This clearly shows that if any of you thought you could produce the same returns as I did in 2003, you simple do not know market history. 22 stocks to 1000, 0 stocks to 95, and 0 stocks to 15 when we look at 100%, 500%, and 1000% returns. So if you don’t get why 2008 could not create the 2003 gains you simply have no clue about how the market works and when and where you should invest.

At the same time (I have not looked yet) we can compare the amount of stocks down 50% in 2003 to stocks down 50% in 2008 and believe you will clearly see being short was right this year and stupid in 2003.

I am still not sure why some of you that are here focus so much on the daily action. This is not another lame daytrading site that shows up for three years then closes. This is a real active investor that knows how to make the big money when it sets up. When it is not there, I am not a dumb-a** and know better than to force a trade just to keep up with a few people on one day. Everyone that beat me today with their gains, had horrible 2008s. Meanwhile I have capital gains taxes I will be paying for 2008 and have TONS of subscribers up over 10% for the year. So for those of you cocky daytraders that are reading this…I would LOVE to see your financial statements. I am pretty sure I will see a 30% to 50% loss for 2008 followed by a 3% gain for today. Congratulations! Ugh.

Personally, I don’t care about any rally off the lows when it has below average volume almost EVERY SINGLE day. If we do not come back on Monday through Friday with strong gains on strong volume there is no way I will be thinking of going long anything in size. The difference between a $1000 investment and a $100,000 investment is COMPLETELY in the chart. There is not a single freaking chart out there that is worth $500,000 much less $100,000. I will continue to keep my longs/shorts during this range bound market the past two months that hold resistance/support levels. But new longs/shorts will continue to be small until one of these two scenarios happen.

One: either the stock market will stop rallying on low volume and will start to rally on heavy volume which then starts to build more and more charts with beautiful correct bases. Two: the low volume rally continues and sucks in all the suckers who have no idea how to read a weekly or a monthly chart (some don’t even know what a daily chart looks like–LAME) and volume. They will buy stocks on low volume that are beaten up as bargains thinking they have a steal of a deal. Well, for those that do this, I want you to watch interviews on CNBC and in the WSJ about MSFT, DELL, INTC, CSCO, JDSU, and QCOM. Back then in 2000 to 2002 and even when the 2003 rally got started, everyone was recommending these past loser laggards as longs. Here we are six years later and I believe EVERY SINGLE ONE is down over 50% from their highs in 2000. Great call (sarcasm)!

Those that invested in those OLD leaders lost getting long SINA, SOHU, NTES, SSYS, GRMN, USNA, EPIC, SIGM, HIL, FMDAY, IST, GNSS, LMLP, HRZ, AFSI, APPY, PDO, TASR, and DGLY which all returned huge returns over anything out there. TASR broke out nine months AFTER the bottom and went on to run 2,400% in nine months. So in nine months I made 2,400%, while the “geniuses” who nailed the bottom ended that run with a 20% gain from their laggards that produced minor gains.

I don’t know about you but when the next rally comes I don’t want to go long GOOG, BIDU, RIMM, AAPL, or any other PAST big leader. These stocks are all too big and I have NO interest in any of them anymore except to short every low volume rally in these stocks till they make their way to the teens. What goes up and then moves in a parabolic fashion usually leads to a full retracement of previous gains.

If you want to be the best and get long the Past Big Winners that I have been blessed to hold onto, you will need to learn how the market really works. Not how CNBC and the Wall Street Journal tell you they way it should work. It might need to work that way. But the real money by the best investors of wall street all-time come from going long new “hot” innovative companies that have stocks breaking out of perfect to near-perfect chart patterns with the stock having strong to growing fundamentals.

Remember, for all of you guys with a 3% gain today, big deal. I have a 52% gain in ANCI in six months for one long and a 74% gain in SDA from a short in four months. My TASR 2,390% gain in nine months didn’t come in one day so why are you daytrading? Just be patient, keep that cash heavy, and unless you can get in and flip out with 20% gains there is NO reason to be getting heavily long in any stock. My hottest holding is up 21% in less than a month and continues to have max green BOP in it as it climbs higher. If you know this stock and/or are a subscriber, you may study it to see what we need to see before we go long. However, AIPC is the perfect current example of how a new purchase should act the whole way it moves up. AIPC 6/18 move to now is loaded with green to max green BOP. AIPC in June is what you want to see when you go HUGE into a position. It is a breakout like that on max green BOP with RS and Moneystream hitting new highs when you want to put 20%+ in one position. However, right now, we have to wait for something like that June/August ANCI setup and AIPC 6/18 setup.

Getting the big gains takes patience. But if you don’t know why holding cash and leaving with a 0% flatline instead of a 40% loss followed by a 3% move in one day is a good way to invest well then you are not going to be involved in the stock market much longer. Those patterns of EPIC, HRZ, AFSI, TESO, TASR, LMLP, GNSS, MRVC, PDO, DGLY, and FMDAY will show up again and instead of having my money tied up in some BS municipal bond fund, I will wait for the next “perfect” setup like AIPC on 6/18.

I wonder how many OTCBB stocks might have looked like that or might look like that now???? Too bad I will never know thanks to the greatest software out there for under $500 being so far behind the curve on keeping up with the times. How much can it cost to add OTCBB. So what if it is scammy. As long as it builds the charts that I KNOW lead to huge 100% to 1000% gains, we can make big money. AIPC is a lesson for us that we are in fact missing great longs in other countries that setup in the patterns that I see before HUGE gains come. So thank you Telechart for having a great product but a VERY LAME stock exchange service. OTCBB and Toronto stocks should be on this system, bottom line.

My bottom line is have a wonderful weekend and I will see you on Monday. Unless you are in the chat room or forums. Then I will see you every moment I am not shopping, surfing, or relaxing on the beach.

top longs/(shorts) w/ total returns UP today: (SDA 74% SPG 36% CASY 19%)

VIDEO ONE, TWO, AND THREE (REVIEW OF 2008) WILL BE AVAILABLE ON THE GOLD FORUMS THIS WEEKEND IN THEIR FULL BEAUTIFUL SIZE. THE FREE YOUTUBE VERSION IS BELOW.

Aloha!

I think everyone, by now, already knows how I feel about the rally, the overall market, the volume, and the charts that are out there in quality stocks. However, there are still mistakes that I even make that causes me a little bit of angst.

I think the best bet is to be honest with everyone and myself and do a little self-analysis of me and my trading in 2008 to best get to the heart of why I had two accounts close down for the year out of five that I am running. Three of these accounts are mine, two of them are not. Why were the two other accounts down while I was up in all of my personal accounts? The answer was simple. The market.

Last night I reviewed both accounts to see what I did so wrong that led to the losses. What I found out is exactly what I expected. This was the first year that ZERO “perfect” charts showed up at all in the second half of the year. Even in 2000, 2001, and 2002 there were nice stocks with near perfect patterns that seemed to make it easier to buy than this year. This year we saw a death of momentum and that definitely caused some pain.

By far, this year, the best two longs came VERY EARLY in PDO and DGLY. Longs like ANCI (then it was XSI) and QCOR helped a lot in taking us out on the year on a good note in those accounts. However, by Telechart not having access to OTCBB stocks we were skunked from a possible huge winner that we would still be long. That stock is AIPC. AIPC broke out in June 18, 2008 and gained 125% in six months and would have completely turned BOTH accounts to the plus column.

How can I be so sure that I would have gone long this stock? For those of you that have not taken the time to study my past big winners there are a few things that happen in the best stocks before they go on to make big runs. First the price must breakout from a long base or bounce off support in a long base, then it must be on higher volume, in fact much higher volume, then BOP needs to be green to max green in the base and either go max green if the entire base is not perfect with green BOP or rise to a very high level of green to max green BOP, and finally the RS line and moneystream line need to hit new highs.

Since 1996 (when I got lucky buying breakouts–better to be lucky than good) to 1997, I did not use this setup. But in 1998 I received Telechart and believed soon I had this setup started. By early 1999 it was complete and has been used EVERY YEAR EVER since. And it still works: ANCI AIPC PDO DGLY and maybe we can throw CSKI in there. Last year AFSI, TESO, and APPY worked. While that doesn’t seem like a lot of perfect charts, it wasn’t. It was a CLEAR HINT of an impending top coming. However, thankfully to our portfolios, stocks like FSLR and DRYS were just a few of the CANSLIM stocks that produced big gains during our final year of a FIVE-YEAR bull market.

So, if I scored those gains, what killed me in 2008? What caused me to lose 13%? One answer: ACM. ACM bounced off the 50 DMA, with HUGE volume and max green BOP with the RS and moneystream line hitting new highs well before price. It was a “perfect” setup and had every making of AFSI and HRZ from 2007 and 2006. However, ACM initially worked, then failed. ACM was setting up just like every other previous monster but starting in 2007 (first one was PWEI in 2006) more of my “perfect” setups failed than worked. Still the success to error margin was VERY favorable. This year it wasn’t.

The two accounts were given to me in October and November of 2007 respectively. As you know by now, during that time, the market fell 55% at one point on the SP 600. However, my account never got below 13% and 4% for the two new investors.

The main problem was being too light on DGLY and PDO and then seeing them work beautifully and with ACM STARTING to setup I began to believe the market might be ready to turn. Even though volume did not confirm it on the indexes, the stocks in those indexes still had some runners. Despite the leaders ALL TOPPING, I somehow thought the market might have one more big move in it before the fall. I was wrong and luckily went short in my own accounts but the new investors both asked me to not short and I gave them my word I would not short (as it is more risky). However, using 4-to-1 margin is just as risky on longs.

That was proven on ACM. As DGLY, PDO, and a few others were working, I wanted to make sure if there was a run I could score a big gain in their account on what I saw as possibly the last little rally we would get. Sadly ACM turned into a 7%, 8%, and 9% loss from my three purchases. While this was not bad for my accounts as I was short from November to January and starting to see signs of reshorting, I still thought ACM would work. I was wrong.

The small losses were on very large positions in these two accounts thus wiping out the OK gains they were initially having. The good news is the best growth fund was down 24% this year. My WORST fund lost 13%. Not too bad. They are not happy. But when I show them what could have been IF THEY LET ME SHORT and what could have been if I ran their account like Jim Cramer (Action Alert Port -38% this year).

Thankfully, they understand and I have shown them my own figures in a bull market and have retained both accounts. They are family (so don’t think I am taking any more right now) and they know me. I detailed to them why they have losses and where it went wrong. I showed them the chart of ACM and compared it to others and showed them the other winners that had similar patterns. They, like me, know that when the market turns up, these patterns will work again.

We already are proving that with the new longs we have taken. We have gone from 3 to 10 longs in December and they have all worked. In fact, we took ASEI long but I cut my FINAL loss before it closed below the 50 DMA in anticipation the 50 DMA of the stock market was going to halt it in its tracks and send it falling. I mean AXYS and ISYS breakouts failed miserably. Would it have been a surprise if ASEI did too? Of course not. So I did get out to save my butt from possible ISYS or AXYS losses (which we did not suffer, thanks to our cut loss sytem in CANSLIM) that hit investors that did not properly, like they ALWAYS should, cut their losses.

If I still had ASEI, we would be long 11 stocks and all 11 would be looking wonderful. At the same time, BEFORE the big selloff that hit in September to November, I am still short every single short I took except for one. After the November rally, I had some recent shorts shake us out and the rest that are still working have moved back near their short entry point. But the most important shorts–the shorts that I have gains over 40% in–are all still telling me to hold on. The only full cover signal I got in a September short was ATHR and the very next day it was back below the 50 DMA closing near the LOD. So I should still be short every short from May to September.

This tells me that this rally is nothing but a bear market rally. However, it has a chance to continue much longer as my leading stocks still all look very good and the two new recent longs have both worked immediately. This means, on the short term, things look good for the future.

However, on the long term, the fact that I have not had more than ONE full cover signal in 27 shorts is not a good sign for a significant bottom. If you want to see what a REAL bottom that LEADS to a REAL bull market looks like go back and review the move off the lows in 1999, 2002, and 2003 which are the most recent starts to strong bull markets. You can see that after some nasty selling, selling then turned into low volume selling, and was then followed by big burst of accumulation during the initial move of the start of a new uptrend.

Every index in 2002, and going into March 17, 2003, had a low volume selloff with the price of the market drifting down. Then they hit bottom and reverse on HUGE volume with BIG price gains. Big price gains without volume is a HUGE RED FLAG that something is not right with the rally. The past two days have been very nice but when you look at the volume you should clearly be able to tell that ONLY retail traders are involved in this uptrend. The big boys are either waiting for a confirmation of the “potential” bottom or they are just waiting for higher prices to start another sell campaign.

Right now, the way the volume looks, the big boys are looking to sell into higher prices and are standing back letting the “hopeful” (see: delusional) retailers trade the market higher for them to begin their operations. Why do I think this? Simple! Low volume rally, heavier volume selloff preceded this, no perfect chart patterns that look like AIPC/XSI in June or DGLY/PDO earlier this year, and 97% of my shorts that I took before the big swoon have given not a SINGLE signal to fully cover for “for-sure” price gains.

This market in the long term looks very sick. However, if you refuse to see the forest and instead focus on the tree it appears to be a very strong oak. Too bad that tree is hallow with investors on the inside. Until we see big volume surges in the indexes on the uptrend, the potential that this market will fail is VERY HIGH.

I hope everyone had a safe and Happy New Year. Let’s see what Wall Street does on Friday.

PS: How did I make money in my three accounts? It’s called shorting. Have you seen my returns in my short picks recently? If you haven’t you should go back through the past five days of daily market commentary posting and check it out. Come the next downtrend, it should be the same thing. The only problem this year was I did not load up because it fell apart REAL FAST. Maybe this is the bear rally that allows us to find “sweet spots” to take some “near-perfect” to “perfect” short trades.

Either way the market moves, I’ll be there. Thirteen years in this business almost down, 70 more to go. GOD WILLING!! I do have MS and one day I might have to talk to my computer to post charts. Hopefully, by then, I have some good personnel that can do my work for me. For a nice paycheck, of course. Hopefully that is 60-70 years away. HAPPY NEW YEAR EVERYONE!!!!!!! For all the new signups on this site: WELCOME ABOARD!!!!!!!!! You have taken a MAJOR first step in actually learning how Wall-Street works. The folks on Wall and Broad don’t have your best interest in mind. They have their pocket book in mind. They are not there for YOU. I am HERE for YOU. I love my “haterz” as much as I love my friends. Great luck everyone!! Here is to a GREAT 2009!!!!!! Let’s go get ‘em!

THE FREE YOUTUBE VIDEO OF PART ONE OF THE MARKET WRAP IS AVAILABLE BELOW. PART ONE, TWO, AND THREE ARE AVAILABLE IN FULL SIZE ON THE GOLD FORUMS.

top longs/(shorts) w/ total returns UP today: ANCI 52% QCOR 43% (AAPL 47% POT 54% TITN 35%)

However, before anyone gets “too for-sure” of themselves and go out there calling a bottom I would like to take your attention BACK to 2002 and 2003. What did the rallies of October 2002 and March 2003, which WERE REAL bottoms, have that this rally does not have? If you answered volume, you are right. If you answered nice stocks, you are right. If you answered stock setting up in “hot” based, you are right. If you said…well you get the point. This rally off these lows, with these charts are NOTHING like the rallies of either October 2002 or March 2003. So for those that keep using those dates as reference points please check your charts.

Right now, the leading industry is airlines and I am not sure how that can be the “innovative” fresh new leading industry that is required to lead us out of bear markets. However, I am wise enough to know to be long the leading stocks in the leading industries of a market uptrend and that is what I am going to do.

I am not going to tell everyone the top 10 industry groups as I believe you should have to do a little leg work on your own. But I can tell you where to find them. If you have a subscription to IBD go to section B and find the industry groups. Go through the top 10 industry groups and go find the top 5 stocks in each industry group. If they all look strong, pick the strongest and go long. I am long a couple of leading stocks in leading industries right now and feel very happy with my current situation.

I may only have 10 longs right now but you can be sure every single one is a leader in its respective industry right now based on either price and fundamentals or just price performance. Why be long a laggard when there are so many leaders out there that can make you real money.

For those of you that think the new leaders that go up 1,000% to 10,000% are going to come from AAPL, RIMM, GOOG, BIDU, or CROX I have some sad news to tell you all. Don’t you all remember the year 2000? Don’t you remember everyone saying MSFT, INTC, JDSU, QCOM, and CSCO were all going to come back and be huge winners from 2000 on to infinity. Well, I don’t know if you have seen CSCO, MSFT, DELL, INTC, JDSU, or QCOM recently but since 2000 all of these are down over 50%. How has that dividend treated you?

Too bad those that were stuck in these never learned their lesson that buying yesterday’s all-stars is not very wise when they are about ready to enter the Hall-of-Fame. Sadly, too many buy yesterday’s all-stars thinking they are going to get yesterday’s returns. The future is always in the new companies and will always be. For those stuck in the past with AAPL, you only ensure that when the next REAL LEADER shows up, you will not be in the stock messing it up for all of us.

The stock market wrap up video one and video two are available on the Gold Forums. Video one small YouTube version will be available when my video technician gets it on YouTube. Have a great night. Happy New Years!

So before we go on with the rest of the commentary, I want to apologize for the late post and the short video two. Subscribers know that I bust my tail every day to make sure that you get the high quality service that you deserve in a tough market. Well today my second video was definitely not the video that I originally wanted to publish. So thank you to my subscribers for enjoying a short video two tonight. Hopefully that error will not be repeated by my computer for a while.

As for the free YouTube video. We uploaded it first to YouTube and somehow it was rejected. After a second upload the voice was messed up. Now the third upload is going up and hopefully it works fine. If not, I promise the problems will be fixed by tomorrow.

The good news for all of you out there that are looking for anything in-depth and insightful after today’s session have more waiting to do.

Very impressive bullish moves in stocks like RIC and NWPX has me gaining a more and more confident level of bullishness with the metals stocks. Not only I do I love the way some of the gold/silver longs are setting up off their recent lows, I also like the way Platinum, Silver, and Gold look on the futures charts. But besides these metal stocks I really do not have a lot of love for most of the other leading sectors.

Now, I did go over around 150 stocks that appeared to be attempting strong bottoms or attempting to build right side of bases and though there is some industries that stick out. The fact remains that many of these stocks have ton of work to do and need to have their price actions calm down before setting up in a proper price, volume, and BOP pattern.

The good news is, like I said before, that the gold/silver stocks continue to have beautiful setups with price and volume and some of the nice small-caps have green to max green BOP all over the chart recently. Hopefully in about a month or two, the 50 day moving average will be over the 200 day moving average and all of the max green BOP will be leading to a stock making a nice flat base on low volume that leads to a heavier volume breakout.

On the flip side of the long side, the shorts that remain in my portfolio look like they are ready for another possible leg down and the lack of big reversals on huge volume indicate to me that staying short the stocks I took short before the big selloff started in September is still the right play. Even though few longs or shorts are showing up, one thing stays consistent and that is that the shorts that I am still holding appear to be headed lower.

Overall today, it is hard to gain a real clear picture of the market as it is basically moving sideways the past month to two months. During that time some longs have done well but my new shorts have not. But like I said before the shorts I took before the selloff are still holding their patterns quite clearly. So I don’t see any reason to change my stance of staying long my recent longs, staying short my long-term shorts, and staying heavily in cash. This is of course until the trend changes and we either start moving up or down on strong volume. Low volume well below the 50 day volume average, like we have now, with the tight price action is the markets way of saying it is “taking a break.”

While the market does that make sure you study my Past Big Winners on this website and to go to the Investors Business Daily University and take their online courses to make sure that you are ready for the next bull market. We might be in a bear market for a while but eventually one day we will turn. When that day comes I will definitely be ready for it and would love to have you ready also.

Have a great morning and hopefully the market can produce us some more NWPX kind of moves before this New Year’s holiday short week is over. Aloha.

top shorts with total returns UP today: IPHS 19% K 15% CYT 62% CPRT 25% GGB 60% SPW 65% CASY 24% ARB 75% SPG 40% OKE 37% CAJ 32% SBAC 54% RDK 18% LLL 25% PLCE 27% AMX 44% RIMM 60% CEDC 65%

I would assume the very low volume was the result of wall street just wanting to take a very long extended vacation here at the end of the year after the year we just had. However, I also believe a lack of funds that are out there are obviously a cause of the slow trading.

Even though the market was up on Wednesday and Friday on extremely low volume it wasn’t that big of a deal as for the entire week all the indexes finished in the red. Now this is not a bearish development, it is in fact a bullish move.

A down week on lower volume with tight price action and bullish tails (Nasdaq shows it the best) are bullish. What we want to see now to have a real possibility of a bottom is up weeks on stronger volume and down weeks on lower volume. Right now we have volume pulling back overall the past two months compared to the huge selloff that preceded this attempted bounce.

The volume during the selloff was so much that for us to actually have a capitulation bottom we would have needed to seen a very big down day that reversed intraday either closing up or closing slightly down after being down over 5%. We had a wild day on 11/20 where the market finished down 7% which was followed the next day with the market up 6% on higher volume (using the NYSE for the example). Some might have thought this was a capitulation (two) day. However, the volume in October was MUCH larger and even larger in September. So how was that a capitulation day? It wasn’t.

Could it have been a bottom? Sure. But to be a bottom that we are for sure about we should be seeing a few things right now. First, we should be seeing a market rising on higher volume on the up weeks and volume then declining on the down weeks, as we move higher. It started off OK with higher volume on the up weeks followed by lower volume on the down weeks. But by late November the up weeks on strong volume ended. And it continues to fall as we move on in these holiday shortened weeks.

What is this telling us? Not much. It is telling us that if we do have a bottom, we still do not have the volume on the upside that is required to be a FOR SURE bottom. We wouldn’t need a TON of upside volume had there been a real capitulation day but sadly without the volume being higher than September or October it was not a capitulation day. But if it would have been, volume up or not, we would have the foundation for a real bottom in the indexes.

Right now, we don’t have a capitulation day or huge volume up weeks. We have a mediocre rally that has about 200 stocks looking like they MAY have put in a bottom. Some of those are very pretty but sadly only 2-3 are loaded with max green BOP and huge accumulation. So for those of you that wan’t to say now is similar to December 2002, you are so wrong it isn’t funny.

First, the volume on the downside, that led to the rally at the end of the year, came on very low volume. Then the volume off the low volume lows was very heavy. Second, leading stocks such as internet-ISP group had “hot” stocks like NTES, SINA, and SOHU setting up and breaking out. Then by December, as you can see in my Past Big Winners, stocks like GRMN, UNTD, JCOM, ERES, USNA, and many others were rallying on max green BOP, strong volume, and breaking out of VERY SOUND price patterns. Right now, I am sad to say, we don’t have that. So I can not join EVERYONE on CNBC and the message boards in calling a bottom.

Your biggest clue that we have not probably seen a bottom is the fact that everyone on every message board and everyone on CNBC (besides Schiff and the other usuals) says that we have seen a bottom and are repeating the EXACT SAME THING i heard in 2000. People are talking about RIMM, BIDU, GOOG, and especially AAPL just like they were about DELL, MSFT, INTC, and CSCO in 2000. I guarantee these once great leaders from 03-07 will turn out just like the old leaders from 95-99. History always repeats itself. Always.

Everyone that is a member of this site has done very well this year, compared to the “professionals” and I want you all to be proud of yourselves. I am VERY PROUD of you all. Now in case we have a bottom coming soon in the market, which I doubt with all the horrible economic numbers out there, I have made five videos going over around 200 stocks that are building “bottoming” patterns. These stocks have the characteristics that I have seen in all of my Past Big Winners.

The sad truth, however, is that 90% of these will probably fail before the 50 can setup above the 200 and the price pattern can setup in a correct base to buy. Still the 10% that we will probably see again we will recognize and be more confident in going long since we have seen it and found it off its lows. Using the knowledge that we remember it from when it was “possibly bottoming,” with the information that we gathered when it was setting up in a base (fundamental and technical), we can then go long without hesitating when the breakout or bounce does occur.

There is a reason for everything that I do and even though this took a long time to make (the videos) it was worth it to help teach all of you what you want to see as the initial signs of a stock possibly bottoming.

I know I have scans that catch the stocks before the breakouts, while they are in the base, and on the breakout, but it is very important to teach you what they will look like when they possibly bottom.

I hope everyone had a VERY MERRY CHRISTMAS!!! I will see everyone on Monday and see some of you this weekend. Aloha, Merry Christmas, Happy Chanukah, and Happy Holidays everyone!!!!!!

top longs/(shorts) with total returns up today: QCOR 33% (CEDC 63% RIMM 58% CAJ 32% ARB 73% PLCE 24%)

VIDEO ONE, TWO, THREE, FOUR, FIVE, AND SIX ARE AVAILABLE ON THE GOLD FORUMS (2-6 GOES OVER ABOUT 200 STOCKS WITH THE BEST CHART PATTERNS THAT ARE POSSIBLY BUILDING A BOTTOM OR A NICE RIGHT SIDE OF A BASE) IN THEIR BEAUTIFUL FULL SIZE. THE FREE SMALL VIDEO ONE IS AVAILABLE BELOW.

Video one on the general market:

It should be obvious to most why this is the case but sadly after I watched Cramer’s mad money tonight on CNBC I am sad to say that I don’t think most get it. A selloff on lower volume indicates that big institutional investors were not interested in dumping stocks in a weak tape. Instead the lower volume indicates it was just weak retail holders selling and not the work of well-funded institutions.

If we would have seen a rally on lower volume today, it would have been safe to assume that the big boys stepped away and let the retail crowd bid prices higher. Fortunately, that was not the case. This now allows us to possibly setup in a more bullish situation.

If we continue to sell on lower volume as this week and the holiday shortened next week comes around, it could set us up for a higher volume rally whenever most investors come back from their Christmas/Chanukah/New Years vacation. If this would happen it would have us setup in a much better accumulation/distribution position than compared to a lower volume rally during the holidays.

If you go back and look throughout history the worst January selloffs are preceded by lower volume holiday rallies. So the good news is that we have lowered our chances of a nasty January simply by not having a big rally during the holidays.

Now, if we take off tomorrow and continue Friday through the rest of the week, my intermediate term bullishness will quickly die. Also a quick way to kill my potential bullish scenario is for us to come back from Christmas and then immediately selloff on higher volume. That would actually be a doulbe whammy as the lower volume selloff at first gets your “hopes” up for a rally and then the rally actually not happening then kills your ego as you see a potential bullish situation die.

However, if you stay flexible and prepare yourself for a resolution up or down or even to more sideways movement, you can be ready for anything. And to be honest this is how all of the greatest traders operate. They are all ready for a resolution up, down, or not at all.

This can be seen in my trading. Even though I am expecting a bit of a better setup to lead to a potential short term bear-market rally, I am still going over my short scans in case something shows up. That happened today. Even though I have gone from four longs to eight longs and have fully covered four shorts the past month-and-a-half, I still was able to spot a potentially very lucrative short today. Therefore, I am going short this stock tomorrow morning, while I still hold some longs.

Even though the market is going sideways, I am using my past history to play the strongest longs to the upside and the weakest stocks to the downside. I will not be taken out of my winning shorts or winning longs, simply because the market moves against them on low volume. I need real selling to knock me out or a violation of my cut loss area. If I am good enough, even in a sideways market, my longs will make money and my shorts will make money.

When I look at the long term, I can see a real bull market coming maybe in 2010. But for the next year, I still see way too much damage RIGHT NOW to want to cover my winning shorts. If my long term short winners like RIMM, AAPL, POT, MOS, ARB, CETV, CEDC, SDA, and many others were giving me big price gains over the 50 day moving average with green BOP and HUGE volume or were closing over the 200 day moving average period, I would definitely cover my full short and get ready for a new bull.

However, all I see is potential bottoms. I don’t see the right side of bases of leading stocks in leading sectors being built, left-and-right. Instead I can only find a few leading stocks in a few leading sectors that don’t seem to last on the top of the list very long. When I start having my scans go from 1-20 stocks per scan a day to 10-200 stocks per day then we can start talking about going long stocks for 500% to 2500% gains in 6 months to a year. Until my scans, that pick up leading stocks before they breakout to make massive gains, start getting active with beautiful chart patterns, there is no way I can give up my long-term shorts that are profitable.

I need a clear “get out of dodge” signal in my shorts before I get rid of them. At the same time I am going to have to see A LOT of stocks build the right price, volume, and BOP patterns before I get bullish again. From October 1999 to March 2000, I WAS A RAGING BULL!!! From March 2000-October 2002 I WAS A RAGING BEAR!! From October 2002-May 2006 I WAS A RAGING BULL!!! From May 2006-October 2006 I was a minor bear. From October 2006-October 2007 I was a very cautious bull. From October 2007 to January 2008 I was a bear. From January 2008 to May 2008 I was a hopeful bull but a realistic bear. And from May 2008 to now I have been A RAGING BEAR!!! I still have no reason to end my bearish bias and I still have very few “hot, perfect, or near-perfect” charts.

However, in an amazing turn of events, there is one long that is in three scans that has beautiful max green BOP, strong accumulation, and excellent price action. The only problem is that the stock is still too early and needs a proper base lasting at least 5-weeks if it is a flat base. But, heck, the stock is so “hot” that even if it only goes sideways for five days and then breaks out I will still take it. That should help you understand how badly I want to be a bull. I am not a bear just to be a bear. I am a bear because the stock market is still in a very big downtrend and shorts are making me money and keeping me WELL AHEAD OF THE PACK.

I can’t wait till another 2003 comes! Sadly, for that to happen, the government will need to cut taxes on capital gains and income. I doubt that is going to happen. In fact it appears they will let the Bush tax cuts, that CLEARLY LED TO THE RALLY IN 2003, sunset when they come up. I wouldn’t expect a 1999 either. I don’t think we will see stocks that lose $10.00 per share every quarter to trade at $200 ever again in our lifetime. So I am still waiting for our next bull market like 2003. However, from where I sit from a free market standpoint I can tell you right now until we start making things again, stop spending money like drunken whores in Washington DC (look at California!!!), reform the tax code, and/or cut taxes on income and capital gains, I just can’t see a bullish future for our markets.

For those that don’t understand history or charts, it was not the New Deal that brought us out of the Great Depression. It was World War II. Go look at a chart of the DJIA and lay over it a list of historical events during the 1928-1965 stock market. Clarity and true wisdom are truly the greatest gifts from God to man.

Knowing the past is the reason why I will be investing in the stock market in the future. Knowledge of truth is DEFINITELY power. Greed isn’t power. True knowledge and wisdom is.

top shorts with total returns that are UP today: CETV 76% CEDC 62% SBAC 52% OKE 38% LLL 24% CASY 20% APD 51% GGB 59% CAJ 32% AMX 44% CEO 32% K 17% SDA 76%

THERE WILL BE NO COMMENTARY OR VIDEOS AFTER TOMORROW’S HALF-DAY SESSION AND ON CHRISTMAS DAY. I WILL POST LONGS AND SHORTS TOMORROW, UPDATE THE GOLD FORUMS, AND WILL BE IN THE CHAT ROOM. NORMAL POSTING WILL RESUME ON FRIDAY.

MERRY CHRISTMAS!!!! EVERYONE!!!

That rally the last hour gave all the indexes little tails on their daily chart patterns and the little tail with a lower volume selloff can almost be called a “constructive” session. Why is this? Because it is obviously better to selloff on lower volume than to selloff on higher volume.

Now, I do know that a lot of people want a Christmas rally so they can end the year on a positive note but I must say that a selloff on lower volume during these next two weeks might be a bullish situation for this market.

The lower volume selloff during the Christmas and New Years holiday week might help stocks build bases that some stocks have been building since their November lows. These bases then may help the market make a move to the upside. This is why a lower volume pullback would actually be a good thing for me to see right now, imo.

If during this low volume pullback, I continue to find some stocks setting up in nice price and volume patterns this might be bullish for a possible uptrend to follow the holiday season. While I understand that charts do not look good out there in the long term and intermediate time frame, a short term rally would not be completely out of the cards as we have had almost non-stop selling all year. In fact, the last time I went long a stock that produced a gain almost 100% was XSI (now ANCI) back in June.

Now, had Telechart2007 had access to OTCBB stocks we could have also gone long AIPC as it set up and broke out of a beautiful cup with high handle pattern on June 18th. This breakout with beautiful price, volume, and max green BOP produced a 124% gain by the top of the current move on December 12th. This stock would have joined our other 8 longs in becoming our 9th and best long since June.

Sadly, Telechart will probably never offer these stocks so we will have to continue to wait for one of the NYSE, Nasdaq, and AMEX stocks to setup in the pattern of AIPC on 6/18. I am sure we will see that but when we will see that I do not know. The good news is that these extremely bullish patterns show up when you least expect it.

However, the truth is for them to setup you normally need a long bear market to allow the patterns to fully develop. In a very volatile market with skittish traders trading stocks like they were baseball cards back in the 1980s you will not get many solid patterns that hold up. However, after a while the dead wait leaves and those gambling daytraders stop trading and leave the game. Then order gets restored and we get 2003. If those of you do not remember 2003, you need to go to my Past Big Winners section under my Longs and study the patterns that setup in 2002/2003 (HIL, TASR, EGHT, SIGM, USNA, FMDAY, and many others). These stocks all setup in beautiful patterns similar to AIPC and ANCI in June and all of these stocks produced very large gains due to a market that was no longer popular to flippers.

The gamblers, weak shareholders, and get-rich-quick crowd that showed up in early 2000 finally left in 2002. Hopefully the gamblers that showed up in 2007 will leave soon thus leaving only us serious investors to manage the beautiful longs that will be produced by a market that will overshoot itself too much to the downside.

This is not going to happen tomorrow but if you remember that low volume pullbacks and heavy volume gains are a very good thing in the market and you remember that nice calm and very very green chart patterns prelude a very big uptrend you will have put yourself ahead of the majority of the crowd out there trying to invest.

I know it is very tough right now to make big money in the market. But if you remember that the BIG money is made in the big uptrends and downtrends, you will learn that markets that go sideways, like this one the past few months, are markets where either your shorts reload for another round of big losses or your longs base out for a potential attack on new highs. Sometimes you don’t know which way a market will resolve but you will always have clues.

Right now, it is mixed. I still have 34 shorts with 24 of them being “big winners” producing over 25% gains in under nine months. But I had 38 shorts a few weeks ago. The fact that I still have so many big winners holding indicates to me that on the long term we are probably still going much lower. At the same time the fact that I have gone from 38 shorts to 34 now and have gone from 4 longs to 8 longs during that exact same time tells me that on a 1-3 month time frame we are probably looking at a bear-market bounce.

Why not a new bull market? First off, I still have ZERO perfect charts setting up (examples of perfect charts include LMLP 99, HIL 03, IST 04, HRZ 06, AFSI 07) telling me it will be time to get VERY long soon. Second off, I have had ZERO shorts up over 55% give me FULL covers. I had one stock up 50% give me a full cover but it quickly (the very next day) went back into a clear downtrend and had me upset that I covered it. Without any hot charts setting up and any long-term shorts giving me full cover signals there is NO REASON to get bullish and call a bottom.

However, the fact that I have gone from 38 to 34 shorts and from 4 to 8 longs with three of my four newest longs all up NICELY in a VERY SHORT time (21% in six days, 8% in three days, 8% in four days) tells me that we should expect more of a rally on the sub-intermediate to intermediate term. Just don’t go thinking that November was the ultimate lows yet. There is absolutely NO evidence of that yet.

As I have it, the long-term trend is down, the intermediate trend is down, the sub-intermediate trend is lateral, and the short-term uptrend is slightly up.

When my video technician has the free market wrap video up I will post it online and if you are a Gold or Platinum member you can go to the Gold forums and watch part one, two, and three. Part two goes over the longs and shorts in the scans and part three looks at the top sectors in the market right now.

Merry Christmas!!! Be ready for some very low volume sessions the rest of the week.

Remember, there are only nine more days to receive the 25% off holiday deal for a monthly or yearly subscription. This deal will not happen for at least another 12 months, and that is only if other financial websites are doing this, so make sure you take advantage of it now. When this market turns you want to make sure you are going long what I go long so that you may also benefit in the huge gains (see Past Big Winners) that we will have in the next uptrend. One good long, like xxxx up 21% in six days, or well timed short, like ARB up 74% in three months, can pay for the annual subscription within weeks to months.

top shorts w/ total returns that are up today: K 15% CASY 19% LLL 23% OKE 38% APD 50% RDK 17% AMX 43% CETV 76% TITN 42% PLCE 28% CYT 62% CEO 30% CPRT 25% RIMM 58% SDA 75% ARB 74% AAPL 46% SBAC 52% CEDC 62% GGB 58% SPW 67% SPG 39% MOS 64% POT 59%

About the only real positive that I could find with today’s action was that there were more stocks in my long scans than there have been in a long time and that raises my confidence level a little bit that maybe we could get a bear market bounce sometime soon. This bounce is too lame for it to be an official bounce in my book. Unless you like gambling and can get lucky and buy HSNI at the exact bottom and get a 250% return in nine days. However, if you got that stock, I am sure you were burned by the other 99 out of 100 you attempted a move like that on.

The sad fact remains that this market is not looking that great. The stocks that reside in the IBD 100 and IBD 85-85 are basically void of any “hot” chart pattern. Nothing is setting up in anything that has me extremely excited and ready to go long. Instead the few longs I get from leading stocks in leading industries have a tough time making headway and once they are up 20% have usually seen the most of their run. This is not the action of a healthy market. In a healthy market you will get 20% gains in a few weeks, a consolidation, and then another run. However, this market has not been very nice to breakouts.

Recently that has changed as two of my three new longs the past week were up 9% and 10% today. This kind of bullish price action with the green BOP increasing gives me hope that this bounce can last longer than just a few weeks. If this bounce can last longer I should have a few longs that should return some very nice gains. And to be honest, that would be an amazing thing for us growth stock/CANSLIM investors that have been waiting a long time for leading stocks to work.

Now, not to say there hasn’t been any leading stocks. There has been. The only problem is that it was on the OTCBB. AIPC on Telechart clearly broke out on 6/18 and 8/7. Had OTCBB stocks been in the system this stock would have been a CLEAR long with that price, volume, and max green BOP action. However, since Telechart does not have these stocks, I missed a 124% gain and a 98% gain on both CLEAR buy signals. This is not the first time an OTCBB stock has built a great chart to produce big gains.

Back in 2006 FRPT was listed on the Nasdaq and soon after Telechart grabbed the OTCBB data. Sure enough, price-volume-max green BOP were loaded on this chart. From 9/5/06 to 5/30/07 FRPT stayed in a steady uptrend above the 50 and 200 DMA producing a 335% gain in under nine months. Back in 2006-2007 it was not that big of a deal as longs ranging from GIGM to HRZ to AFSI all showed up during that time.

But this year it has been a barren wasteland of nice charts as ACM on 6/27 was the last “hot” chart to setup in a “near-perfect to perfect” setup. ACM failed and since then NOTHING has come close to looking like AIPC did on 6/18. So if anyone is reading this that has any kind of sympathy for us active investors that like to produce 100% to 3,000% winners, please go to the Worden User Forum and join me and others in requesting charts for OTCBB and Chinese companies. In fact I would like every stock on every stock exchange to be placed on Telechart. I am sure they could do this and I would be more than willing to pay the extra fees. So please everyone help me petition for Chinese, OTCBB, India, and Latin America charts.

I am sure Worden will do nothing. But it can’t hurt to ask. Maybe one day he will wake up and realize the value in such a service. It is a global market now and the USA sure isn’t a haven to the worlds newest and most innovative companies anymore. We need access to more markets.

Anyways, back to this market. right now we have a market that is not showing us much. When we go back to the top in October 2007 we are definitely in a long-term downtrend. That is why I have 24 out of my 34 shorts from before the major selloff that started in September. All of those stocks are up over 15% during this time with the best of them up over 75% for me. So being short is obviously the right play for the long-term. This trend is also still in effect from the summer of 2008 so the intermediate trend is down to confirming the holding of these shorts.

As for the sub-intermediate trend, we are definitely lateral as the SP 500 has moved a whopping -1.26% from October 10th to December 19th and the Nasdaq has moved higher a whole .8% from October 24th to December 19th. This lateral trading range has caused me to go long and short a few stocks with mixed results. The good news is that the stocks that are working during that time are producing gains larger than the losses. So even with the poor recent record due to the trading range market, my new longs and shorts have not really caused me any problems.

On the short-term the trend is definitely up and this is confirmed by my recent longs moving up 10% and 9% today with my new long on Wednesday moving up almost 7% on Thursday. These quick gains right off the bat show me that going long is right for now. However, unless these charts continue to build on their current gains with more gains on heavy accumulation with green to max green BOP there is no guarantee that we can hold these gains with the weak volume in the indexes on this uptrend.

If this uptrend was moving higher with volume well above the 50 day volume average and we could take out the 50 day moving average and hold above it convincingly then I would be much more bullish with our current situation. However, it appears to me this uptrend is on low volume and with a couple of days of distribution it might not be long till we move lower.

So the best bet is to continue to be heavily cash, take some profits quickly when we have them and remember in the long term our methodology will always beat the market. That is why we have gains in our long term shorts like these top shorts w/ their total returns UP today: CYT 61% OKE 37% CEO 28% SDA 74% AMX 40% APD 49% SBAC 49% CEDC 59% POT 55% MOS 60% CETV 76% CASY 19% PLCE 26%. Not only did those shorts do well but don’t forget my three new longs: 10%, 9%, and almost 7% right after going long. This market is not for the weak and only the very skilled experienced investors are going to come out of this market with more money than when they entered.

I am just happy to be on that short list of people. I don’t know many up this year but all of my current subscribers can happily let you know, via their own personal returns, that this year has not been a bad year for us. When you compare it to the 1999 and 2003 years where you can return well over 1000% if you move from one HUGE winner to the other, this year isn’t that good at all. However, if you compare our returns to those of Bernard Madoff, Bill Miller, Ken Heebner, Jim Cramer, and every other mutual fund out there this year, this year has been an amazing year!

When you cut your losses, go with the trend of the market, and stay extremely disciplined in your methodology it is almost impossible to go broke no matter how bad of a market environment you are in.

Don’t forget, there are only 12 days left to take advantage of our 25% offer. I will not be running another deal until next Christmas and I will only run the deal if every other financial website runs one. I really want to get you ready for the next bull market and teach you how to make a ton of money in the stock market without EVER having to listen to another “guru” on CNBC for the rest of your life. Look at those returns in my Past Big Winners and look at the returns I am producing now. If you have losses for the year, don’t you think you owe it to yourself to see what you are doing wrong?

Happy Chanukah! and Merry CHRISTmas!!!! everyone. Next week is a holiday-shortened week and boy oh boy can we use it. Aloha, have a great weekend, and I will have the free small youtube video up before Sunday. Gold and Platinum subscribers can watch full size version of market wrap video one, two, and three on the Gold Forums.

Instead it appears the trading range the market has been in the past two months will continue to trod along until the market actually decides to make a decision one way or the other from the 50 day moving average.

When we look at individual stocks in our scans and look at leading industries we can see that the market is not real healthy and while some education, small banks, medical, and metal related stocks are doing well recently the fact remains that this market has a lot of resistance to deal with and will probably be tough to deal with in the short-term.

This is why I must caution everyone from calling a bottom. If we had a volume, we HONESTLY would have some high quality fundamentally strong stocks setting up in beautiful green bases on my charting software. The fact that my scans continue to be completely void of any high quality stock with nice charts and that my long-term shorts continue to work perfectly and not give me full cover signals is a clear signal that the downside is not fully in check yet.

Even more proof of this is that I had a short that was taken in September that gave me a full cover signal yesterday. However, today, it re-reverses on even higher volume and now is back to being a clear short. So in other words I covered a short that gave me a full cover signal and now it is back to being a clear short again. So the fact that even when the first full cover signal on a long-term short was given it still did not lead to the stock rising. Instead today it was back to selling off on higher volume. Do I regret covering all of it now? YES! Still another 35 shorts tell me that I am in good position.

We did have a new long yesterday and it did produce for us a gain over 5% today but this is a leading stock in a leading industry. The airlines and education stocks have two clear leaders in those two groups and I am happily long both. However, if they decide to rollover, I will not wait and ask questions. I will instead act and get out of the leading stocks in the leading industry groups. So far they are holding in there with gains but anything is possible in this market.

The fact is that on the short-term the trend is up, the sub-intermediate term is sideways, the intermediate term is down, and the long term trend is definitely very down. For those that do not fully grasp the severity of this downturn I want you to realize that we have fallen harder and faster than even the great depression. I guess we will see if we lose 90% like that market did. The way the data looks it sure would not surprise me.

Luckily, I never have to worry about guessing which way the market will go as I have learned to use a combination of fundamentals and technicals to know if I should be bullish or bearish. Right now, the charts say to stay bearish and a few charts hint that they want to rally but not really. The fact these charts are not super bullish and working right away on huge accumulation is a big red flag.

This market is definitely not out of the water and today was a very dull day with the lack of any follow-through to the recent gains. I have to stress this over and over, ONCE AGAIN, cash is king! There will be a time to get very long on full margin when those beautiful charts like AIPC (from June to now) start showing up everywhere. But until then, you can be sure the safest and surest play, unless you are a daytrading this volatile market, is to be heavily long cash. If you can’t stand being patient and have to play the market, you can go to my Gold forums and play my ETF recommendations.

Just because I do not take my long/short recommendations in ETFs doesn’t mean you shouldn’t either. i would actually be having a much better year had I followed my own ETF recommendations. I am sure if beautiful charts don’t show up any time soon, and new shorts do not build proper setups, that I will soon be going long/short ETFs.

All I have to say is Thank GOD for CANSLIM. The money made in 1999, 2003-2007 by being long the strongest stocks in the strongest sectors has allowed me to stay patiently in cash this year as we wait for the best short/long setups to setup. The only regret I have is that I did not load up on my shorts like RIMM, AAPL, and a few other key stocks that are now up over 65%+ when they setup in their very bearish patterns. I really thought we would have more time and better setups to short. However, this market fell apart so fast there was nothing I could do.

Stay positive, continue to stay VERY DISCIPLINED, and remember this too shall pass. Part one and part two of my stock market wrap up videos are available on the Gold forums in full size. Part one free Youtube version will be ready as soon as my video technician has it up! Have a great day/night! Aloha!