Stocks Resume Selloff As Distribution Day Rattles Investors Who Bought Last Weeks LAME Rally
December 1, 2008
Do people not pay attention to volume at all? I am starting to begin they don’t after listening to all the typical talking loud-mouths this weekend. They all clamored and were happy the indexes were up 15% to 20% last week. Yet not a single person anywhere mentioned that volume was lower and lower each day as the rally went along. They also did not mention that we were right near/at the 50 day moving averages which are in a downtrend on all the indexes. Leaving these two key facts out made anything they said irrelevant.
There was always a possibility of waking up and seeing a market running away today but the truth is this market is predictable yet insanely impossible to trade unless you are a daytrader. After my initial short positions before the selloff really started, things have been harder to manage as shorts are not going down in a smooth line like they should in a bear market. This is making for a very difficult trading environment and why unless your timeframe is 10 seconds it is not wise to get very long this market.
The fact that after a holiday short week of light volume that we can come back and selloff so violently should have more people concerned than there are. But with the put/call ratio under 1.0 and the VIX still not at new highs, we simply do not have the fear needed to get this selloff over. Instead too many are “hoping” that economic moves made recently will help the market. In my opinion, it only prolongs it.
If it is golden parachutes, ridiculous bonuses via options, program trading, online trading under $5, decimalization, dark pool trading, Regulation FD, Sarbanes Oxley, no uptick rule, or the government interfering in the stock market, the truth is that we do not have the free market that we once did. This is why we are seeing the recent volatility that we have seen since September.
Until this volatility ceases to be a problem, there is no way new shorts or new longs are going to be safe enough to load up on here. Instead small positions are STILL the call of the wild and there will be no way I place anything over 5% in my portfolio in one issue unless it is a PERFECT short setup or a PERFECT long setup. I am sick of taking small losses and only buying/shorting a few shares of the stocks that do well. Until my patterns show up, it is going to be a long dark period of cash holding.
However, holding cash now, after all the gains we got in the bull from 2003-2007 and the short positions that we still have on now like SPW 71% SPG 53% GGB 64% MOS 70% SDA 79% AMX 47% AAPL 44% LLL 31% RDK 17% RIMM 59% K 18% ARB 72% CAJ 37% POT 64% CEO 40% ATHR 46% AMSG 23% CPRT 31% APD 53% CETV 83% OKE 41% PLCE 23% TITN 53% CYT 64% SBAC 57% IPHS 35%, is OK with me.
I am a very patient trader and have recently fell into a trap where my largest positions don’t do as well as the less-sure smaller positions do. This has been happening almost all year and started last year after the successful AFSI/TESO investments of 2007. Since then there have been too many cut losses compared to those gains above and with the gains on the long side with DGLY, PDO, and APPY, I just can’t see pushing anything here. Cash is my main weapon as I wait better setups.
Putting the odds in your favor is what I do. When I am right, I am more than 4-to-1 right to wrong. When the market is in an uptrend 4/5 stocks will work in a new bull. In a bear, however, it is hard to be more than 50% right. I have some subscribers that have done very well with my shorts. However, the odds haven’t been with me and yet I STILL have a 25% gain in my top account and only a 10% loss in my worst account given to me in November 2007.
I tell you this much, that 10% loss is still killing the top growth mutual funds (I do not count Gabelli ABC fund due to it being an arbitrage fund). For the past six months the top growth stock mutual fund (excluding the arb Gabelli fund) is the Fidelity Select Consumer Staples growth fund. Not only is that a fund directly involved with one area but it is still down 28% the past six months and 30% the past year. So according to my personal goals of ALWAYS WANTING TO BE IN THE TOP 1% OF GROWTH MUTUAL FUNDS with my subscribers being at LEAST IN THE TOP 5% OF GROWTH MUTUAL FUNDS, we have succeeded. They are down 30% and we are up anywhere from 25% to down 10%. And if you are like a few of my Platinum subscribers, you are up over 50% and I am VERY jealous of you.
This has been a very rough year and a month is left. Still don’t think that I EVER would consider giving up. I still see some pretty charts that are trying to form out there. As long as that accumulation via tall green bars and green to max green BOP can show up (which it is on a FEW stocks), that is enough to keep me interested and prepared for the next leg up or the next leg down. As for sideways (consolidation) markets: I am very patient and can wait for a trend to start.
Don’t forget I am running a Christmas special and suggest if you want the discount rate to go for it now. There will not be another deal until next Christmas and there is no guarantee it will run the whole month next year. That will be up to the economy. However if you would like to get some of these returns in a bear market: SPW 71% SPG 53% GGB 64% MOS 70% SDA 79% AMX 47% AAPL 44% LLL 31% RDK 17% RIMM 59% K 18% ARB 72% CAJ 37% POT 64% CEO 40% ATHR 46% AMSG 23% CPRT 31% APD 53% CETV 83% OKE 41% PLCE 23% TITN 53% CYT 64% SBAC 57% IPHS 35%. And you would like to get the returns you see in my Past Big Winners Longs and Shorts, then make sure you sign up while there is a deal. I am also doing family packages and for ex-Vets and students, this 25% can be used on top of the current deal that I give Veterans and students already.
I hope everyone is surviving out there. If you are not, remember, I am always here to help, even when the geniuses of wall street have left you a shell of your former self. Those liars have nothing on the truth of the charts. Nobody can predict the future and those telling you to buy the bottoms now, WERE TELLING YOU TO DO THAT IN MARCH!!! It’s time to wake up people to the truth. 
Part one and part two full size version of my stock market wrap video are available in the Gold forums. The small part one Youtube version will be available later:
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If these returns, WHICH ARE LAME COMPARED TO 1999 and 2003 THAT YOU CAN SEE IN MY PAST BIG WINNERS, can’t keep you excited for the next bull market, NOTHING WILL!
[2008.12.02 02:17:45] JoshuaHayes: December 2005 top holdings:
[2008.12.02 02:17:49] JoshuaHayes: Longs Outperforming Market: GMXR-170% BCRX-120% RES-106% PETS-100% EMKR-92% ICON-86% LCC-79% ACR-69% NRPH-64% CVO-59% NWRE-57% CBG-56% TSCM-53% MIDD-46% ECLG-42% GOL-42% SMTS-42% LCRD-37% GRS-37% EAGL-34% LDSH-33% AUY-32% FWLT-29% TEVA-27%
[2008.12.02 02:17:55] JoshuaHayes: i miss bull markets
[2008.12.02 02:18:39] JoshuaHayes: http://mauitrader.blogspot.com/2005/03/ … nally.html
[2008.12.02 02:18:52] JoshuaHayes: my first post on the internet since 1999 (this was in March 2005)
[2008.12.02 02:19:20] JoshuaHayes: well i worked for TCNet as a contributor to the RT service from June 02-Nov02
[2008.12.02 02:19:23] JoshuaHayes: then i messed that up
[2008.12.02 02:19:31] JoshuaHayes: like i messed TSCM up
[2008.12.02 02:19:35] JoshuaHayes: basically by being honest
[2008.12.02 02:19:41] JoshuaHayes: TC i messed up
[2008.12.02 02:19:56] JoshuaHayes: TSCM was just foolish/losing money with too many writers
[2008.12.02 02:19:59] JoshuaHayes: still
[2008.12.02 02:20:02] JoshuaHayes: also in 2000
[2008.12.02 02:20:14] JoshuaHayes: i still hung out on the daytraders MIRC network
[2008.12.02 02:20:22] JoshuaHayes: but still funny to see my first post
[2008.12.02 02:21:13] JoshuaHayes: horrible first post
[2008.12.02 02:21:17] JoshuaHayes: glad I got better at this
[2008.12.02 02:21:18] JoshuaHayes: lol
[2008.12.02 02:22:41] JoshuaHayes: March 2006:
[2008.12.02 02:22:45] JoshuaHayes: Longs Outperforming Market: PNRG-62% ERS-223% CLZR-50% STRL CYBS RUTH LPSN NTES NVDA-78% ASF-210% ILSE UIC-46% RATE-143% AKAM-83% ATHR-104% VTS VIMC-93% ASVI BOOM-409% WNR CBG-111% PEC RMBS KEYS-32% TMI SEAB FRGB EAGL-59% ROK SAY-34% NTAP BWLD CHE NGPS MMK-42% AAU TWPG QCC SPWR-44% MEK-49% RBY SMSI-52% TGE TWTC-139% TGB-25% GIGM-100% TFSM-37% TOMO TMTA KNOL-55% AUY-99% RNAI-37% FDRY-35% FMTI MDII
[2008.12.02 02:23:37] JoshuaHayes: April 2006:
[2008.12.02 02:23:40] JoshuaHayes: Longs Outperforming Market(number is % gain since initial purchase): BOOM-507 ERS-453 WIRE-188 CBG-130 SLW-134 BBD-132 ASF-228 VGZ-128 TWTC-151 BWNG-132 TSCM-110 NXG-179 RBAK-245 VIMC-93 ICTG-95 COGO-60 STRL-47 BGC-72 TTES IFO ILSE IVAC-34 VPRT SNDK AAPL ASPV CORS LTM KEX-43 MDCC-47 WF AXE-40 TMI-26 TRAD-58 UIC-68 ZEUS-78 BAS KDN-25 SHFL IHS-45 NMR-42 LRCX-41 RUSHA CTXS-54 PKE VLG NTAP TXCO-64 HEI
[2008.12.02 02:24:45] JoshuaHayes: Feb 2007:
[2008.12.02 02:24:50] JoshuaHayes: Top Holdings – Signal Date
PTT 344% – 11/16 KNOL 265% – 1/12/06 AKAM 251% – 9/30/05 CVO 166% – 8/17/05 SVNT 136% – 8/24 TTEC 124% – 8/25 MA 116% – 8/2 CCOI 111% – 9/27 AOB 111% – 9/12 ICE 110% – 9/21 CPA 108% – 9/15 CLEC 105% – 9/25 CHINA 103% – 8/16
HMSY 93% – 6/23 IGLD 93% – 10/26 OMTR 89% – 9/15 HRZ 88% – 9/27 TRCR 84% – 1/12
Stay positive, don’t give up, and if you stick around these gains can be yours also. You just have to pick a handful, you don’t have to be long all of them. I am just trying to show you in bull markets I will be 4-for-5 out of the stocks I take and will be about 4-5-to-1 with gains vs. losses. You can’t predict which ones will go up 500% and which will go up 50% but the way the chart looks and how green it is can play a major influence.
Trust me, we will ride this out. And even if only 5 stocks are moving, we will be long them or will have our eye on them.
Stay strong my friends.