Here Is The Video From Today’s Market up (Market Wrap Up From Author_Ego (John Ward)–Give him a TON of thanks as I could not get this done tonight without his help. Thank you John!!

September 22, 2008

Well, if you were hoping for another wild ride on Monday, guess what, you were not disappointed. This market continues its schizophrenic behavior, my friends. An example of this is the Banks-Super Regional group. On Friday, 33% of the stocks in this group had hit a new 52-week high; on Monday, the group was down almost 11%. Forget about the reasons why, it just is what it is. Truth be told, if you’d slept through the past week, you’re probably much better off – for all the volatility, the Dow as of today was up a meager 0.9%; the S&P 500, 1.21%; the NYSE, 3.10%; meanwhile, the Nasdaq was down 0.04%. News wires will one day be full of apocalyptic headlines, optimistic and exuberant the next. For the CANSLIM trader, however, headlines should mean next to nothing. Only one thing should matter: what is the market saying?

Well, folks, it’s simply this: we find ourselves this morning at day four of the rally. We’ve had enormous gains on record volume and now a low volume though not insignificant failure at the 50 day moving average, which so happens to be trending down and is, of course, trending below the 200 day moving average. The Put/Call stands at 0.91. There were 39 New Highs to 97 New Lows. Take these facts for what they are. Will we get a day soon where we’re up over 2% on powerful volume? That’s anybody’s guess. However, what we haven’t had so far is this: new leadership. Where are the young, innovative companies with new products and explosive earnings that are forming proper bases and breaking out on strong volume? A quick glance at IBD’s leading indices (the IBD 85-85, IBD 100 and New America Index) will answer this question. All of these indexes are trapped beneath their 50 day moving averages and, lo and behold, their 50 day moving averages are below their 200 day moving averages. And these are the leading stocks in the market! This does not a bullish tale tell.

What’s out there right now is a whole lot of choppy and V-shaped bases, bases that are too short or noisy, and, worse of all, bases that are forming after downtrends. This doesn’t mean we give up on them, mind you. Far from it. If you read Monday’s “Investor’s Corner” in Investor’s Business Daily , in fact, there was this little nugget:

“Keep in mind that new stocks can rise modestly and retreat in a bear market, creating an unimpressive record, IBD’s founder and chairman, William O’Neil, wrote in “How to Make Money in Stocks.”

“When the next bull market begins,” he said, “a few of these forgotten newcomers will sneak back up unnoticed, form base patterns, and suddenly take off and double or triple in price.”

As Brian pointed out last night: some of the most impressive single-day advances occur during bear markets (vide, the Nasdaq on January 3rd, 2001: up more than 14% on record volume, yet the index went on to fall another 50+% before it bottomed). Will 9/18-19 add to this inglorious history? Only time will tell.

What we are singing now is a familiar tune: “Cash is king, cash is king, cash…is…king.” Don’t be an idiot. Protect your capital. Ignore market “news.” Never mind the why and focus on the what –in other words, don’t try to figure out why stocks are doing this or that, only concern yourself with what they are actually doing. Act like a professional, in other words. Trust me, this bear will break more than a few before it’s all said and done. So don’t be a casualty because you got bored. Ask yourself: “Do I have a love of the game, or do I just want to make money?” Starting preparing now, then, because our bull market is coming. We know neither the time nor the place, but it’s coming. About that you can be sure.

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