Stock Put In Another Great Late-Day Rally However, This Time, Volume Was Lower; Leading Stocks Keep Lagging. When Will This Change? Until It Does The “Big” Money Will Not Be Made

April 15, 2009

I believe Chris Maye will have the pre-market stock market update. If it isn’t him on Thursday, then it is John Ward. If it is Chris Maye, John Ward will be posting morning commentary Thursday night/Friday morning. Great luck and thanks to ALL that showed up at their local anti-tax tea-party rally. It was a nationwide success, no matter what the BIASED left might spin. This was NOT about right vs. left. It was about FREEDOM vs. Tyranny. Americans, yesterday was just another “start.” There are many more pro-FREEDOM events coming up, I am sure of that!

Commentary by Market Speculator

Earnings news drove the morning action as big tech stocks MSFT and INTC were a heavy drag on the NASDAQ. Volume throughout the day lagged, even during selling volume was consistently below average. During typical bull markets Wednesday’s action would have been accompanied by higher volume as shares rose at the end of the day. Although lacking volume, the market still is flashing a few signs of bullishness with its price action. It simply isn’t flashing we are in a raging new bull market.

Many market pundits were crying foul in late summer of 2007 as volume was sub par, but we were able to see stocks set new record high closes on the NYSE indexes. Although volume WAS below average up volume outpaced down volume and we did have leaders hit new highs. This is certainly not 2007, but this point illustrates that although we might have lower volume it certainly doesn’t mean we can not squeak out gains from the market. It may simply be a bit more difficult and short-lived.

There were some leaders who acted extremely well today. One stock in particular pulled back to a pivot point and blasted off. The stocks is FAR TOO EXTENDED at this point and will need to consolidate for a proper buy point, but there is some light out there. Speaking of light, there is one stock most of us at Big Wave Trading that is shining MIGHTY brightly. We do have leaders, just not as many as we’d like there to be.

Two more important points.

One being is NEVER to chase a stock. Often times when traders begin to chase it is on pure emotion and end up purchasing a stock WELL above the pivot point for a stock. Yes, you want to be in leaders, but you do not want to be reckless when entering into a leader. Often times once you’ve chased the stock it pulls back to or near its pivot shaking you out of the stock. If you are shaken out, if the stock is flashing tremendous fundamentals DO NOT ignore it wait for the stock to offer you another chance getting into the stock.

The second important thing is trading is an art form and not an exact science. Art is a very difficult thing to teach as you need experience and talent to be GREAT at this art. An understanding of your abilities, risk tolerances, and portfolio position sizing will give you a greater sense of how you execute using art. Often times we see members want an PRECISE answer and it simply isn’t a hard and fast rule. We have “rules” when to enter/exit but overall it is an art form. Treat it as such and you’ll begin to notice differences in your trading.

I wish all of you a safe and happy weekend! Enjoy the remainder of the week and keep a look out for leaders setting up.

Market Speculator

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