Late-Day Bullish Reversal Off The Lows Keeps Stocks From Hitting New February Lows; Volume Remains Below Average, For A Full Second Week In-A-Row
February 22, 2008
What looked like was going to be the session before a possible breakdown turned into a bullish reversal by the close, after word of a bailout of the bond insurer ABK. Now, I am not here to discuss the ethic of CNBC of this news and to be honest I could really care less as I think watching CNBC is a waste of time (I just tried to watch it again, recently, and that lasted 30 days). So if you were watching your charts intraday, the spike looked the same as it did on CNBC. It really doesn’t matter what the news announcement was and anyone that thinks that this changes anything must not remember the last time CNBC did this last month. LOL. Different players, same game, with CNBC. You are best to just turn it off.
By the closing bell, somehow all the indexes, based on that rumor, turned what was looking like pretty nasty losses into .8% gains on the DJ and SP 500. It was simply stunning but not quite convincing. How so? I tell you what intraday spikes that CAN be explained are lame. If we would have gotten this spike, on heavy volume, and there would have been NO news, I would be very bullish on the market. Instead, I still have the same apathy towards being long or short here as the market is coiling tighter and tighter showing very little conviction.
Obviously, as subscribers know being long some top gold, steel, and oil stocks, there are some hot sectors out there in this poor market. But besides these select few, along with the usual defensive, medical stocks, there is nothing else moving out of nice sound, round, properly formed bases. They are all choppy, too deep, or have been built with huge volume on the selloff and low volume on the rally. This is not bullish for the long term. But, it could be bullish on the short term. In fact the market is coiling, like I said, into a triangle pattern that I believe quite a few on RealMoney have also pointed out (I only read a few people and I was really busy today so I am not sure how many besides Helene mentioned it) and that obviously could be bullish or bearish.
However, since the pattern has a high history of continuing in the direction the pattern was formed, I would guess that this thing is going to break lower. That is confirmed to me by the lack of real leadership besides defensive stocks and the non-ability of the market to hold onto any kind of strong gains whatsoever. After any little strong rally, this market gets slapped lower and that is just not the way stocks act in bullish situations.
This is the kind of market that makes a lot of people very insecure and a lot of others ready to throw in the towel. This is why I have been saying over and over for the longest of time that cash is king. If I am not making money in this market, I doubt anyone else is either, because I have been around a VERY long time and have seen my returns in bad markets beat others before. This is relatively new but it is completely a function of the market. This has nothing to do with someones personal style or strategy. It is simply the market being very volatile and only rewarding the daytraders that buy the dips and sell the rips which is a style very few can use effectively.
In this market, NOTHING is for sure, and for all of you that read RealMoney and see the crap these kids are arguing about on Columnist Conversation (I think I am younger than 3/4 of them, sadly) a lot of people are not doing very well and I guess the next step is defending your style and insulting others. They have even pulled me into this game but I have always thought the “bottom-dippers” to be foolish. I remember in 1998 only a couple years after I started how I was already making comments to those buying new lows how stupid their strategy was. After studying that all the biggest stocks at one point or another had to make a new 52-week high for a first time, it became clear to me buying new highs on strong volume was the way to go. And early on after trying to bottom fish a few times and having those results PALE in comparison to going long QCOM and JDSU which were breaking out to new highs.
I remember being a subscriber to Townsend’s RTIII and calling the trading desk once and getting a guy who asked me about my style. I told him I buy new highs and he told me he buys new lows. I immediately remember reading how most stocks went higher that hit new highs and visa verca for new lows. After that statement, he said, “good luck buying new highs, you are going to lose your money. If you ever want any advice my name is blah blah blah.” As you can assume I never called that person again and I wonder how buying the new 52-week lows in 1998 was doing for him in 2000. And by the time 2002 came around I wonder if he was still around to “bottom-fish” the weakest stocks after so many assumed failed attempts.
I personally don’t care what you use, I am simply showing you the style that will give you THE BIGGEST AND SAFEST RETURNS WITH A CONSISTENT AND PROPER WAY TO PREVENT MAJOR LOSSES IN YOUR PORTFOLIO. O’Neil has studied the best stocks of every year of every decade going back to 1945 (I think; if not, it is around there) and the exact same patterns showed up over and over. That is how he came up with CANSLIM. When we compare the CANSLIM records and then look at the early traders of Wyckoff, Baruch, and Livermore it becomes clear that the way they cut losses, bought breakout in the most expensive and highest quality stocks, and went to cash or went short in bear markets confirms that the best traders use a form of this system.
No matter what, though, I think common sense tells you that if you have a way to grab an 80,000% in CSCO and possibly get that in the future that you need to know how CSCO did that. What is funny to me is that all the TA and FA guys on RealMoney seem to be short term. There are some very long-term players there like Cramer and his picks. But when I go over his past records, I find very few 100% winners and do not find ANY 500% gainers. Yet by checking out 1999 and 2003 (BOTH INSANE BULL MARKETS; we will get another one soon) you can see that most of my best looking longs with strong fundamentals gave us MINIMUM 300% gains and some of the best did 1000% to 4000%. Why can’t anyone grab these? It seems like I am the only one that has huge returns and the funny thing with that is that I combine fundamentals with technicals when it comes to buying and loading up on my longs.
I am not sure why they are so one way or the other. Like I have said before that would be like a doctor only using either X-ray’s or instruments. The best doctors use both!
And when I use both, I know that fundamentals are ALWAYS the BEST at the top. Stocks top and selloff BEFORE the fundamentals do. Normally after some of history’s biggest winners have topped, huge fundamentals roll in for a couple of quarters afterwards. It usually isn’t until much later that the full problem is revealed.
But there is a macro way of checking on fundamentals and that is by a nations GDP. As the trend of a nation’s GDP goes so goes its stock market. So if we look at the value of our Dollar, our debt, our GDP growth, jobless numbers, and CPI data it becomes very clear that the macro picture is very bearish. So when we have all of this, combined with a nasty GDP and downtrending stock market, I am not sure why people are so fancy on earnings right now. By next quarter, you will more-than-likely learn why so many stocks have topped and are now trending down.
This is why I don’t EVER care why a market rallied or fell. I only care that it is. I can NOT make money by learning why it fell or rallied. I can only make money by acting on the upward and downward movement of the security based on unknown information. When you are long stocks in an uptrend and short stocks in a downtrend, it usually doesn’t matter what the news is anyways. The strength of the trend if it is up will turn good and bad news into good. The same goes in a downtrend when bad news and good news will both be taken as bad.
Since 3 out of 4 stocks follow the general trend of the market and that trend is down, since the November top, the smartest thing it seems, in the intermediate term, is to focus on stocks that are rallying on low volume back to the 50 or 200 day moving average. When those past leaders get there, if they reverse on stronger volume, you know that you should be getting short these once beloved leaders.
One of those leaders that everyone talks about is DRYS. DRYS has a special spot in my heart thanks to a former-subscriber (I gave him the boot) from a couple to a few months back. WillPS back in December started to let me know how cheap DRYS had become and how it would be foolish to not buy it. The numbers were just too good and the stock was going to 100.
Obviously, during that time, I was no longer bullish on DRYS because my long that I initiated on 8/22/07 was completely sold (the last 10% of the holding) with a 10% gain on 11/26/07. However, from the purchase to the ultimate top the stock gained 106%. Thankfully, since I always! take some profit with a 100% gain, I was able to get some of that before it REVERSED ON HUGE VOLUME the very next day. The next morning is where most of DRYS was sold with a 74% gain. Not bad for a holding time of two months. 100% every two months the rest of your life leaves you a very wealthy man.
After the final sell on 11/26, I was done with DRYS as it sold off on some nasty volume, BOP went red, and the price pattern of the arithmetic chart appeared to me that the stock had possibly topped. But around 12/10 I start receiving messages telling me how great DRYS is. Long story short, DRYS then fell 35% finally breaking down below the 200 DMA which FOR ME is a CLEAR final sell signal for ANYONE who was long. If I would have bought DRYS off the November 2006 breakout, the close below the 200 DMA would have been my final sell signal (291% gain in one year and one month; NOT BAD AT ALL!!).
After going a little bit lower, DRYS finally started to bounce. Of course, by now, me and WillPS have parted ways as I know longer receive any of his pump emails but I am sure wherever he is, if he is still trading, he must be thinking I am a moron for not buying the lows (which he missed the first time, don’t forget) as DRYS has now rallied 66% in one month and one week. Well I hope he doesn’t forget about my 100% gain in two months as something doesn’t tell me this is going to happen this time after ALL of that heavy volume selling. So even if it goes up a little more, the gains will still have paled in comparison the last time it rallied. But yes I congratulate you for this low to now gain of 66%. It is just too bad that the first time the “tip to buy” came to me it came with the stock 5% higher. So not sure how DRYS has changed the corner.
But I guess it has changed. Even if DRYS continues to rally, it is a VERY HIGH RISK candidate. First off, history has PROVEN (not guessing but the facts) to us that the best stocks only decline between 30% to 50% in the most severe bear markets. If this is a start of a bear market, DRYS has already failed the minimum base requirement to be a good stock as the stock was off more than 60% from the October 2006 highs to the January 2008 lows. The nastiness of the base is even made more clear by looking at a long term daily chart that goes back to when it IPO’d in 2005 on an arithmetic scale. This chart shows a stock that has rallied over 1000% from the lows in 2006 to the highs in 2007. I don’t know about you but a 1000% gain in one year seems amazingly climatic to me. So I am not sure how my buddy is doing or what he is thinking by wanting to be long a stock in such a deep base, from such a heavy volume selloff, after a very heavy volume decline.
Now, I am now saying that it is not possible for DRYS to reset up in another base and then breakout to go on to produce some good gains. But history tells us that the past bull market leaders do not lead the next one. That is why INTC DELL MSFT CSCO ORCL YHOO EBAY did not rally 1000% the past bullish uptrend. Instead the 1000% gainers came from RIMM AAPL GRMN. So this just continues to prove that leaders from one year do not lead the next. So “if” DRYS can breakout from its next base and go on to score some wins I doubt that it would do as well as say AUY.
By looking at AUY you can see that its base is just now rounding out on a very long-term weekly pattern going back to 1997 when the stock started to selloff. So if AUY breaks and runs it has a MUCH HIGHER chance of being the next DRYS and putting in a 1000% run (NOT SAYING IT IS JUST SAYING THAT IF A STOCK IS GOING TO DO IT AUY COULD WITH ITS CHART AND AMAZING EPS AND SALES GROWTH). But the biggest difference from AUY to DRYS is the market. For AUY to do what DRYS did we would have to get a much more bullish tape than this. But ERS was a gold stock that rallied 550% in six months so AUY can be the next ERS instead. It doesn’t matter to me, as long as it just goes up and makes me money.
Since I just brought up the bearish tape, before I end this weekend commentary, I want to discuss the internals, market sentiment, and then leave you with something from IBD and RevShark that confirms my analysis.
Some of the reasons why I just do not think the market is going to hold the 1/22 lows is that if we were going to do that we would be seeing some sort of real leadership. However, when you have ONLY 33 new 52-week highs to 281 new 52-week lows it is a clear warning that the market is very weak and that more stocks are reaching for lower lows than are reaching for higher highs. This is simply not what you see in bullish markets or in bear markets that are to turn from bad to good. Instead it is indicative of a market that is to give up the lows. But, for now we are still holding them so we can’t start pounding the table and screaming to short the market just yet. But this internal is very weak.
Not only are the total numbers of new highs to lows poor, the quality of the new highs is worse. Steel-Producers, Banks-Foreign, Household Furniture, Energy-Other, Medical-Systems/Equip, Metal Proc & Fab, Apparel-Clothing, Gold, Nat Gas, Chemicals, Tobacco, Pollution Control, Oil&Gas, and Consumer Discretionary. Do you see Telecom, Aerospace, Internet, Software, Hardware, Semiconductor, Computers, Real Estate, or Brokerage Firms up there? Nope. You have inflation sensitive and defensive stocks ONLY and every single bit of the high tech sector (minus Energy-Other) and the brokerage firms are selling off.
Obviously, the best stocks are the innovative, fresh, high-growth businesses that come from technology. But the brokerage stocks like ETFC SWIM TRAD AMTD (IBKR bucking the trend showing you the real leader) show you the confidence the public has in the stock market and when these stocks are rising the market is usually bullish as the stocks would not be going higher unless things were great back at home. So obviously things are not COMPLETELY healthy.
The last thing that bugs me is sentiment. I still hear value investors and bottom-callers claim the market has bottomed, left and right. But I have been around a long time and my memory is very sharp when it comes to the stock market because I love it so much (the stock market and IBD has literally SAVED MY LIFE). Not only that, I have studied every major turn from 1890 to now. So the 1907, 1929….2000 market is all known by me. I know about the follow-through days that led to the bottoms, I know about the way they topped, and I know the stocks that came with the uptrends or downtrends via reading books. Thank you John Boik! (If you do not have any of his books, buy them all!!). But the point is that at every bottom, two things happen: there is either a very PAINFUL intraday selloff that creates SO MUCH fear that volume spikes to astronomical levels and we bottom after a big price swing (usually 5% or more) or we slowly selloff, moving lower inch-by-inch lower on sometimes heavier volume but mostly lighter volume. That is not fear that is frustration and has usually made the best bottoms.
That kind of frustration low is how the 2002 lows were made which led to the powerful follow-through days in March 2003 that launched one of the best bull markets that my charts have ever seen. But the 1999 bull market was launched from a “fear bottom” on 10/8/98 (I remember it like it was yesterday). But just like the returns are proving, the 1999 bull gave me a LOT more HUGE gains in short time but in 2003 there were a lot more great chart patterns that led to some huge gains in much longer time frames. Which is better because some of these sales came with long-term capital gains taxes. So, to me, a slow bleeding death of the stock market lasting between 6-24 months is the best thing for the market. That will ensure use more NTES SINA SOHU FMDAY TASR FLML USNA SWIR SIGM EVOL charts for us when this is over.
And trust me, we are still not over this bearish market yet. Not with the VIX moving below the 50 day moving average again to the 24 level (need 40 at least), the put/call at 1.16 (need 1.5 at least), and bulls still beating the bears in the investors intelligence 41% to 33% (they almost crossed last week–36% to 35%–but they still didn’t cross; last time was in Oct 2005).
With leadership and sentiment like this, I hope you are smart and making sure you keep A LOT of cash on hand. Wait for a more clear pattern to emerge first. If the market breaks down and starts making new lows, get ready to short those stocks that rallied on low volume to key moving averages. If we get a follow-through day, wait till you see stock charts like the chart patterns I have been posting in my ‘past big winners’ section. YOU MUST LEARN FROM THE PAST (GOING BACK AS FAR AS YOU CAN), TO LEARN EVERYTHING ABOUT THE FUTURE. Or at least learning everything you need to know what to do in the future.
I hope you all have a wonderful weekend! Aloha from the beautiful island of Maui!! I will see you in the chat room either on Sunday for a litlle bit or on Monday at 7am HST (9am PST 12pm EST)!!
top holdings up this week and their returns: MA 318% IHS 227% CPHD 105% MCF 124% CCC 120% AUXL 87% PTEC 121% EBIX 114% (AAPL 33% MSTR 29% ASF 30% TIF 20% EPIQ 22% EEFT 20% COH 28% SHOO 34% SGMS 38% PVH 23% GRMN 32% PSYS 23% GOOG 22% LFC 34% LVS 23% CBEY 50%)
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39 Comments »
Here are just a few of the hundreds of the best stocks ever that most investors missed. Do you see anyone on RM getting this? Then why do you read them???????
GOOGLE increased 560% in 39 months
_____________________________________
RESEARCH IN MOTION (Blackberry) +1,600%in 46 months
____________________
APPLE +1,580% in 46 months
______________________________________
FIRST SOLAR +840% in 11 months
______________________________________
HANSEN NATURAL +1,320% in 20 months
______________________________________
STARBUCKS +200% in 34 months
______________________________________
PRICELINE.COM +2,530% in 16 months
______________________________________
AOL.COM +2,340% from 1997 to 1999
______________________________________
YAHOO.COM +5,400% in from 1997 to 1999
______________________________________
eBAY +790% from 1998 to 1999
______________________________________
SCHWAB +10,000% from 1990 to 2000
______________________________________
CISCO +80,000% from 1990 to 2000
When leaders go beyond a normal
correction into the ugly zone, any
subsequent bounceis suspect.
DryShipsDRYS is No. 1 in the IBD
100, but it holds the top spot despite
a nightmare chart.
FromNovemberto mid-January,
the dry-bulk commodities carrier
dived 63%. That goes way beyond
any normal correction.
Recently the stock has rallied off
the lows, bringing the stock 33%
off the high. That has boosted its
Relative Price Strength Rating,
which appears to account for its
lofty ranking.
I read your columns with interest Joshua. I’m brand new into this game, having got myself a RealMoney.com subscription and seen your first postings there just a few weeks after I subscribed. Your first column there grabbed my attention because I’d been a Cramer believer until then, although I’d started to lose money into the downtrending market, and all of a sudden this brazen new RealMoney contributor comes in with his “short AAPL, RIMM, BIDU, GOOG, FSLR” calls. It flew in the face of almost everything else I was reading and I’ll admit I thought you might be wrong.
Roll on a few weeks and it’s pretty clear now who was right and who was wrong!
I guess you must have had emails since then declaring that you’re a permabear from RM people, because you’ve had a few pieces where you go to great lengths to explain some bullish positions you have. Don’t be afraid to let us know if any new stocks show up as good shorts too!
At the moment I look out for your columns above almost all others. RevShark is undoubtedly good but even he has been sucked into the recent petty arguments with Marcin and others. Plus he doesn’t really say what he’s buying and selling, in contrast to you.
So I’ve bought Livermore and O’Neill’s books, and to keep my initial costs tight I’ll be suscribing to IBD and cancelling RM in a month’s time (unfortunately, but I think it’s the best choice). If I start to do well I look forward to joining the folks here to listen and learn.
Great work, and all the best from snowy Canada!
Dave, you don’t know how much I appreciate this. It makes me feel so good to be doing what I am doing and then to receive remarks like this just blows me away.
I never saw myself as anything other than a P.O.S. trader but once I noticed how few BIG WINNERS the pros were actually getting it became clear to me I had more to offer than a lot of those guys. I live in NYC for a while and learned I have no interest in the WS lifestyle. I will leave that for them. The market makes my bed. Not the retail crowd. I go to bed EVERY night KNOWING I did MY BEST to make you ALL wealthy. I never will ever give you ANYTHING less than 100%.
Dave, I hope you stick with this and get it. You should return and if we ever do get another bull (which we will because we always do) I would love to see you back here, with us, making a ton of money.
Like I said, review my past big winners on my site and my current big winners at the end of my commentary pieces (they are posted on Sunday) and then review the past big winners like:
GOOGLE increased 560% in 39 months
_____________________________________
RESEARCH IN MOTION (Blackberry) +1,600%in 46 months
____________________
APPLE +1,580% in 46 months
______________________________________
FIRST SOLAR +840% in 11 months
______________________________________
HANSEN NATURAL +1,320% in 20 months
______________________________________
STARBUCKS +200% in 34 months
______________________________________
PRICELINE.COM +2,530% in 16 months
______________________________________
AOL.COM +2,340% from 1997 to 1999
______________________________________
YAHOO.COM +5,400% in from 1997 to 1999
______________________________________
eBAY +790% from 1998 to 1999
______________________________________
SCHWAB +10,000% from 1990 to 2000
______________________________________
CISCO +80,000% from 1990 to 2000
This is what I want. This is what I am looking for. 5% to 20% flips here and there WILL NEVER cut it for me.
Dave, thank you, once again, for this amazing praise. It really is great to see so many people sending so many thank you notes for those early pieces that at first made me seem very brazen.
I really really really hope you are able to join this site and RM again, in the future. I really hope you are here for the next big bull market (whenever that might be….) so that we can make a lot of money together.
Plus, it is lonely on Maui when it comes for stock market friends. So the more the merrier!!
THANK YOU SO MUCH DAVE. YOUR WORDS KEEP MY SPIRITS UP EVEN WHEN I AM DOWN. And I admit, I have been a bit depressed recently. SO THIS ALWAYS HELPS.
PS: not depressed because of the market; are you kidding me? the market NEVER affects my mood from one day to the next.
….well, I must admit, on days where my accounts gain 5% or more, I am VERY HAPPY and that usually can be seen on me for the whole day.
Something tells me not to expect one of those days any time in the future
But maybe MTL AUY BVN and JRJC can go parabolic on us, like my ERS long from November 05 to May 06 that provided me with a nice 560% gain from the buy to the ultimate top.
Where are these stocks now? MTL AUY BVN JRCC maybe???
I don’t know if you’ve mentioned this or not, but the Nasdaq Acc/Dis rating in IBD has quietly crept back to B-
No. But yes I did notice that. Another thing I am not sure if I mentioned. Did you see the IBD 100 clipped its 1/22 lows this month? I didn’t see anyone talk about that and I only NOW noticed it.
Typical sideways market. I saw this before already, in the year 2000. There is almost NOTHING different. What would be different is if we continued to rally from here. That would be different.
You all need to check out the new Sports Illustrated swimsuit issue.
It has Maui’s very own and the new Gap/RL (not sure which one) spokesmodel Tori Praver. God doesn’t make them much more beautiful.
Maui No Ka Oi
why does is my gf making me move????
Actually that is an unfair rhetorical question….I know why i have to move: family.
It is that simple and it is what a man has to do.
I agree with the poster above. I enjoy reading you blogs above all others. You have a way a cutting thru all the noise and focusing on a couple key aspects of the market. I enjoy Fast Money and Mad Money, but it turns out those guys are wrong ALOT.
When I read Bill O’s book several years ago, CANSLIM seemed like the way to go. I quickly realized that it’s WAY more difficult than he makes it sound, and pretty much wrote it off. Your site has renewed my hope that it may just work after all. Keep up the good work, my man.
I do have a question. One of the rules is cutting losses at 7% (or so). How often do you break this rule, if ever? Also, how often does a stock gap down on you past the 7% loss to say 20%? That is my biggest concern about buying hyper growth canslim stocks. You can’t always cut losses at 7% if you get an occasional gap down past that point.
Thanks again, Josh
Rob
Well as you see with ALL of my longs, the 50 DMA is normally ALWAYS the final line in the sand. As you can see with all of my longs now. The 50 DMA is rarely more than 10% away from there. So OBVIOUSLY I am not really ever going to break this rule.
BUT…in bull markets, if you DO NOT buy stocks that breakout of ALL of those patterns (please tell me you can see the same thing in all of those charts) you should have noticed that you are going to miss ALL of the biggest stock market winners.
In new bull markets ALL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! of the stocks that are going to go up 500-1000% are going to breakout or breakaway from the 50 DMA on huge volume and with the stock moving up 10-25%.
If you want to make big money in bull markets, you are GOING TO HAVE TO BUY stocks up more than 7%. YOU HAVE NO CHOICE, unless you DO NOT want a 1000% return.
I don’t know guys, I am showing you all of my biggest winners. NONE of you should doubt ANY of those returns. I am not sure but I know that all of the charts look the same with GREAT price action, HUGE accumulation, and a chart full of green to max green BOP. So when you see this along with a breakout on huge volume you can not pass it up or else you will miss SINA SOHU NTES TASR FMDAY SIGM EVOL FLML….ALL OF THEM.
I will own 5 stocks up 2000% and no one else will on RealMoney.com come the next bull market at its completion. WATCH!!!!!!!!!!!!!!!!!!!!!!!!!!!
NOW! If the VIX never gets above 40 ever again, then I will say 5 stocks up 1000%. If the VIX never hits 40 again, we are never going to get another 2000% winner.
Now holding for a 10,000% gain like Schwab or 80,000% gain like Cisco could always happen again. I would love to hold a stock for ten years!!!!!
What I recommend is this FOR NEWBIES
Either do not buy those stocks up too much and focus on the lesser volatile stocks. This will halt your huge returns but what is wrong with 300% gain in a bull market? NOTHING!! In this market, I will be ECSTATIC to get a 25% return by the EOY. In the next bull, the goal is 1000%. I doubt I will do it but it IS the goal. IT CAN BE DONE.
Here is a systematic way you could buy stocks up over 10% with maybe the 50 DMA or the support lows being 20% lower. If you go long a stock and it instead slowly reverses the next few days you could:
in a bull market:
sell 25% when it falls 5%
sell 25% when it falls 10%
sell the rest with a close below the 50 DMA or the low of the base it is breaking out of.
That way a big loss will only be a little bit of damage
in a bear market, when you go long:
sell 25% if the stock does not move higher IMMEDIATELY
sell 25% when it falls 5%
sell 25% when it falls 10%
sell the rest when it breaks below the 50 DMA or the support of the most recent base.
Yes, that could mean 4 commissions on top of the 1 buy. But if you are HERE on this website you should be using a RT broker. If not you should be at just2trade, tradeking, or zecco. Scottrade, ETRD, and AMTD are DEAD to me. Too expensive! Instead four sells and one buy cost me $5; instead of $35 at Scottrade where just a buy and sell knocks you for $14
Thank you Rob, once again, for those great comments. Those comments only make me want to work harder for you guys.
I hope this answers your question. ALOHA!
Hey,
Likewise, thanks to you for the kind words and encouragement you give to us newbies. CANSLIM seems to me also to make the most sense for the next bull market, and maybe for some short term trades in the current climate, although it’s such a mess right now. I’m more inclined to stay in cash, as you said in your piece.
When columnists on RM are starting to bicker and make posts saying “this market sucks” it makes me feel better about sticking on the sidelines for now.
A question if I may: A few people are talking about WDC making a move. I know it’s hardly going to be a huge gainer, but I wondered if you think it has legs, or now that everyone is talking about it, does that make it more dangerous?
Thanks.
WDC is in an uptrend above the 50 and 200 DMA…and that is all we need to know. That is bullish. But why buy this chart pattern. Does that look anything like my past big winners.
Guys I am posting my past big winners for a reason. The same chart patterns will show up again. Why you are going to force a trade with this sloppy chart pattern is beyond me in this market. But study those past big winners. If you don’t see that much green on your charts, do NOT go long. KISS!
But it is in an uptrend and if you are long you stay long.
Yes, Dave. The fact anyone is talking about it is BAD!!!! Nobody was talking about GRMN when I went long. Nobody was buying GOOG when i was telling people to buy GOOG (I did not buy it because base was too short–MISTAKE!), nobody was buying AAPL when I went long in 2004 and sold it in 2006 for a 400% gain. NOBODY!
If your stocks are now “popular” and are in a downtrend, you need to be looking to get out.
IT IS VERY DANGEROUS TO HEAR PEOPLE TALK ABOUT YOUR LONGS UNLESS YOU ARE ALREADY UP 200% OR MORE. THEN YOU WAIT FOR THE CLIMAX TOPPING PATTERNS.
Just a bit confused on the reasons you believe that JRJC might go parabolic along with the other three mentioned above.
On reading your commentary for this week, it’s mentioned to stay away from stocks which trend down > 50% from the recent highs ? Otherwise, everything else that you generously mentioned and discussed are rock solid in my eyes.
Thank you kindly.
MISTAKE: JRCC!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! NOT JRJC. MY BAD!!!!!!!
There is nothing to be confused about! anymore
You should NEVER buy stocks in a downtrend.
Don’t all my past big winners and all of my 300-2500% returns prove that!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
How many of you value guys out there bought stocks hitting new lows and then produced these kind of gains?
ANY OF YOU????????????????????
roflmfao….I already know the answer to it because I have studied the best stock market winners every year for the past 120 years. They don’t come from being down 50% plus off the highs.
How did Enron, WCOM treat everyone who bought those “bargains?” You can NEVER go broke buying BRAND NEW FRESH 52-week highs and cutting all your losses at 7%. IT IS IMPOSSIBLE UNLESS YOU ARE A HORRIBLE STOCK TRADER.
And God knows 99% of those in this game ARE!
So how can that not be “rock solid?”
Donald, thank you for pointing this out to me. I really!!! appreciate it.
Mahalo for all your kokua and for keeping me on my toes!
COME ON GUYS LET’S GET A BIG LEAGUE GOING LIKE WE DO ON FANTASY FOOTBALL. I LOVE COMPETITION AMONGST THIS INVESTING COMMUNITY.
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.
Thanks for your response and clarification.
BTW….
I’ve been reviewing your site for over a couple of months. I’m very impressed !!
I’ve also reviewed some info. in the archives. You have everything there laid out….the Great, the Good and the bad. No hidden and misleading performance info. like Many Other Advisory services!!.
I will be signing up and joining your Gold Service in the very near future(–as too much going on right now).
ps: I hope that the IDB updates on your site is of sufficient material such that I will not have to subscribe also to the IBD service as well ?
Thank you..
Donald, everything from IBD that I read that I find helpful or important to learning how to become a better investor I post in the forums.
It might not be enough but if you combine those articles along with my telechart scans/list that I post every other weekend or every weekend you will always have updated IBD list from all the stock list areas and relevant articles.
I LOVE the Issues and Insights page and read it every day but they have that at http://www.ibdeditorials.com so besides that there is not a “lot” that I focus on in section A (new america, leaders/success, mutual fund)
I enjoy your posts on RM and will definitely spend more time reading here. I have been following Rev and the community on his blog for less than a year and started down this path not long before that. I see many approaches there that are working for some very smart traders and have learned a great deal but it is time to focus.Your approach and the way you articulate your thoughts with enthusiasm and clear cut conviction are very impressive. I am sitting mostly in cash with positions in RIG, CPHD, and CRDC. This is my first bear mkt. and have been conflicted and frustrated by my lack of action. The long positions I avoided at the Jan. lows are up 45+ % (FLS SGR RIO DRYS (oops&duh)PBR) and the Dow is only up 6.34%. It’s silly I know to feel a sense of frustration when I KNOW I don’t have the gift of foresight. What really frustrates me is not sticking with QID SDS etc… Waiting for higher levels that never come instead of building my short positions the way I would build any other. The future for these is much clearer based on history and I certainly don’t think it is too late to start these positions during the coming week. Needless to say I feel a lot better that I didn’t bottom fish the positions on my list after reading your article. But I do have to mention the DBI and how DRYS trades based on this index. I assume that you are bearish on the DBI. Thank you and God bless!
I have no idea why the name Joshua appears as my name on the above post. I did start my message to you with your name. No biggie just wanted to be clear.
LOL. No problem.
Keep working hard. Do not let this market frutstrate you. I mean this happpened for three years before the 2003 bull started. But as you can see via my past big winners, they still show up.
Like you said though, trust me patience is the smartest thing to do. You don’t want to do what a TON of amateurs are going to do here: trade themselves broke.
Everyone is talking about the dry bulk stocks…..dude I noticed these in 2006 so most people are ALMOST two years LATE. I got a 100% gain in DRYS in two months, the best stocks dont pullback more than 50% if they are real leaders, this stock pulled back 65%, and therefore I no longer have ANY interest.
Too many people are in love with DRYS for it to ever be a great stock ever again.
Holden42 wrote:
MauiTrader, other members:
What are your thoughts about Google? Has it finally found a bottom? How should you play it in this market? Too expensive? Too risky? Time to buy?
Today is Sun Feb 24. GOOG closed at 507.80 on Fri Feb 22
THIS GUY HAS HAD HIS SUBSCRIPTION CANCELED.
THIS IS THE KIND OF QUESTION YOU SHOULD NEVER!!!! ASK ME!!! Smile
THIS GUY CLEARLY DID NOT DO HIS RESEARCH, DID NOT REVIEW MY SITE, AND DID NOT GO OVER MY FAQ OR STRATEGY PAGE.
THIS GUY WAS PATHETIC.
PLEASE NEWBIES DON’T BE LIKE THIS GUY!!!!
ANYONE SIGNING UP TO THIS SITE SHOULD KNOW!!!!!!!!!!!!!!!!!!!!!!!!!!!!! THAT I NEVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! BUY STOCKS IN DOWNTRENDS AND NEVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! BOTTOM FISH.
HOLDEN IS A JOKE!!! AND SUBSCRIBERS LIKE THIS IS WHY PRICES WILL RISE IN THE FUTURE. NOW I KNOW WHY REV CHARGES $500 A MONTH. LOL.
BY THE WAY….I HAVE BEEN SHORT GOOG FOR OVER A MONTH NOW AND HAVE A 25% GAIN. ANYONE THAT DOES A SIMPLE SEARCH ON ‘GOOG’ AND NOT ‘GOOGLE’ WOULD KNOW THIS.
DON’T BE “HOLDEN” (LAZY)!!!
If anything GOOG seemed to undergo some renewed selling yesterday (Monday 25th) and I think it closed at or near a 7-8 month low. It’s looking pretty unhealthy.
BTW, recognizing trends and industry groups helped me get out of a trade near the top last week. I was holding some ANSS, which is a wonderful company, but it’s in an industry group that everyone hates right now (167 on the IBD list).
Armed with that info I was able to sell at the market open Thursday (on a very nice earnings release) and take some profits, because the big money sure had decided to do that as well. It’s come back about 10% since then.
It was not normal behaviour if you look at what has happened in recent years,but recognizing the current industry group to make a decision helped a lot.
Look at GOOG today. So much for buying “bargains” or “bottom’fishing”
Instead: how about that TSRA short? That is how THEY ARE SUPPOSED TO WORK ALL THE TIME!!
JRCC was a great pick. The UBS downgrade did nothing. Kudos!
JRCC, MTL, and AUY are studs!!!!
Since this is the free commentary some of you many not know
I took TSRA short this morning as my ONLY short recommendation last night.
I wish that happened all the time.
40% gains, every day, for a full year, would be “fierce.”
Girlfriend makes me watch that “project runway” show and I wanted to work that word into a sentence.
CPHD #’s don’t look good.
I am taking 33% of my profits here and locking in a 90% gain on those shares.
Good eye, Boo.
DRYS ….
Interesting comments, but clearly you don’t know enough about BDI, earnings drivers, and DRYS economics specifically.
$75 pps w/ $18 or higher forward earnings makes for a dirt cheap stock, even if it will be volatile.
Charts are not the b-all end all.
Don’t take this as a critique on you or your trading style; you seem to be quite successful. And I get it; don’t fight the trend (as in the market trend overall).
But surely you would agree that you are not infallible.
And I have no current position in DRYS at the moment; but will be looking at long side opportunities. DRYS has been very good to me.
If we see 60ish again in DRYS near term, look for the oppty to load up the boat. Not sure it will go that low; but anything is possible.
I don’t know enough? The charts KNOW IT ALL!
LOLOLOL. HILARIOUS!
DRYS has topped. Learn to read your charts and go read my ‘past big winners.’
Once you can match my returns, then I will listen more closely but you have to understand I dont focus on one stock. I dont marry a stock. I only buy leading stocks. DRYS is a laggard now. The big gains are over. Everyone knows about this stock. It is no longer a secret. All of my past big winners show certain characteristics. There is only one stock right now with the proper setup STARTING that is CMP.
You are in love with DRYS like most amateurs are with stocks. DRYS has topped. I made my money and the way you and EVERYONE else is IN LOVE WITH THIS STOCK PROVES that the good times has come and gone in DRYS.
This is proof right here!!!!!!!!!!! that DRYS has topped. This guy’s emotions are in it.
As for loading up at 60…if you do that you will be in DEAD MONEY!!! for years while we are in constant 500% to 1000% winners. Like I said, it is clear, you have not studied ANY of my past big winners!!!!!! If you would have you would NOT want to buy this trash. Where is all the green????? Where is this stocks sector on the leading industry group list?????
NEVER BUY STOCKS IN DOWNTRENDS.
DRYS HAS TOPPED. THE STOCK MARKET HAS TOPPED.
RAISE CASH AND WAIT FOR CHARTS TO SHOW UP THAT LOOK LIKE MY ‘PAST BIG WINNERS.’ UNTIL WE SEE MORE 99EPS STOCKS BREAKING OUT OR MY TYPE OF CHARTS BREAKING OUT, CASH IS KING.
DON’T LISTEN TO THIS TO THIS “EMOTIONAL ADVICE” FROM SCO. THIS IS WHY I HAVE A WEBSITE AND HE DOESN’T. ADVICE LIKE THIS WILL LEAVE YOU BROKE IN THE LONG RUN AND/OR IF YOU HAVE TO MAKE A LIVING YOU ARE GOING TO GO A VERY LONG TIME WITHOUT MAKING ANY MONEY…..I DON’T KNOW ABOUT YOU, BUT I CAN NOT AFFORD TO DO THAT WHERE I LIVE.
DRYS HAS TOPPED!!!!!!!!!!!!!!!!!!!!!!!!!!!!! AND SO FAR I AM RIGHT AND YOU ARE WRONG. BECAUSE I HAVE MADE 100% IN TWO MONTHS AND SOLD AT THE TOP AND GOT MY READERS OUT WHILE I AM SURE YOU WERE BUYING THE WHOLE WAY DOWN.
LEARN YOUR HISTORY. STUDY THE PAST BIG WINNERS. NONE LOOK LIKE DRYS.
Not a critique of your style, of course.
Aloha from Maui, where I have created a great life by NEVER buying crap like DRYS. DRYS was great from November 2006 to October 2007. NOW every low volume rally is a short.
FUNDAMENTALS ALWAYS LOOK BEST AT THE TOP…………THAT WILL BE THE EXACT SAME CASE WITH DRYS. WAKE UP AND LOOK AT THE VOLUME!!!!!!!!!!!
DRYS HAS TOPPED!
PS: why is EVERYONE in love with this stock. That is all you need to know to STAY FAR AWAY.
The only stocks you should be long are:
gold
silver
steel
oil
food
pollution control
water
or any other commodity related industry
Aloha from Maui where another Sunday goes down as another perfect whale active day. I think I saw a fish with the word DRYS on it, when I was out in the ocean. A big wave and a big shark came and killed it!!!!!!!
a BIG WAVE TRADER AND A REV SHARK
stupid? yes. cute? yes.
Love stinks! Sometimes you finally get it when your a$$ get’s kicked.
Amazing how defeat will change your mind for the better. Even the most rudimentary chart study can save your a$$. I’m looking at a chart DRYS right now. Is that a DEATH CROSS I see? The 50 below the 200 day? I LOOOOVE PCP as a company and I think Mark Donegan damn near walks on water as a CEO but that means NOTHING if the chart says RUN! I won’t even look at a chart that didn’t bounce hard off the 100 day at the Jan. lows. And only in the sectors you mention above. There’s only one RevShark but that’s a pretty impressive dorsal fin you got there.
LOL. Classic.
Way back in the day, for those that don’t know who RevShark is, he started the AOL Shark Tank chat room which was one of the very first back in 1995 with Herb Greenberg. I might have my dates a year or so off but still the point is made.
The arguments that are being made by DRYS lovers will one day be argued by commodity perma-bulls.
I hope in about 20 more years I can charge $500 a month like RevShark. LOL. I would NEVER charge those who already subscribe that. But I would have no problem with newbies. I also believe, later on, I am going to have a test and if you get too low of a score we ask you to read some books, retake the test, and then join.
CPHD Well that was fugly! I see a tall green volume bar. Was that you? LOL!
I never buy declining stocks. That would never be me. I would only be selling. NEVER BUYING this red chart.
DRYS down 22% since someone called me out in an email. DRYS is no longer a leader. If you buy this TRASH you will be in DEAD!!!!!!! money for a long time.
People like me are going to RUN CIRCLES around you via % returns.
DRYS is old. Some of you newbs DON’T GET IT!!! The stocks that led once, 99% of the time NEVER lead again. You are focused on an OLD LEADER. This stock will NEVER!!!!!!!!!!!!!!!!!!!!!!!!!!!!! produce a 1000% return. You may be happy with 20% but not me. I need 100% returns annually and in bull markets expect 10,000% reutrn if I use my margin correctly. I am NOT looking for 20%. That is for losers. I am a winner in the stock market.
That is why I have owned 2000% monster stocks and few others have.
Great luck everyone…that listens to me…you don’t really need it however.
Great luck everyone that doesn’ tlisten to me….you are going to need it!
Your dorsal fin is growing.