Strong Gains Come On Heavier Volume; Volume Still Below The 50 Day Volume Average (Institutions Were Not Buying On Tuesday)
April 1, 2008
Today was a very strong day for all the market indexes, as laggard stocks led the market higher on higher volume. However, that higher volume was below the 50 day volume average on the NYSE and the Nasdaq. Not only that, the IBD 100 and IBD 85-85 index, which is loaded with leading stocks that historically outperform the market by a 2.5x margin during uptrends, were up 3% and 2.7% respectively. This was even worse than the DJIA 3.2% gain which is a clear sign to me that there is no reason to declare a bottom here.
For those that are newbies and/or psychotic that email me 3x a day, we had an incredible bull market from March 2003 to January 2004, late 2004 to early 2005, and late 2005 to April 2006. After that we had another rally in late 2006. This one however, came on lower volume and had much weaker leadership with few new/fresh stocks making strong gains. In fact, only two big CANSLIM winners showed up in my charts with “near-perfect” chart patterns. While it was tough to make money there, it soon became obvious as the market sold off and erased the November-January gains in a month.
The market fought back but still leadership was poor. Then we had a rally from August to November that while was short produced us MANY 100% winners in two months. Granted that wasn’t the old 300% gains in one month of 2003. But when the VIX is mired in the 20s what do you expect? DRYS, MTL, APPY, and many others still produced solid gains that help make many CANSLIM investors year in a couple of months. I was more defensive then, but those that were aggressive got paid.
So now here we are with another rally, but just like the others that we have had since November, we still see NO VOLUME above the 50 day volume average which is a CLEAR sign that mutual funds are not involved in the stocks. That means that we ARE IN A MUCH MORE RISKIER POSITION TO FAIL THE RALLY. Had we had strong volume on today’s gains, then we could be more confident that the elephants were in front and behind us as we bought stock in bulk.
There are some stupid traders out there that are telling some of us to go long. These are the same donkeys that told us to buy in November, December, January, and February. Now here we are in March and they MUST be right this time. Since these fools have not given up, I doubt we have seen the final bottom of this bear market.
I mean heck, doesn’t everyone see the macro-numbers out there. Granted the yield curve is bullish but the DJIA with a p/e of 61, a slowing GDP, rates being slashed, income falling, net worth contracting, housing falling, and inflation rising this is not a bullish backdrop. And this is confirmed in my charts. I still do not have ANY HOT CHARTS!!! NONE!!! If this was a real bull market I should be able to not keep up. My scans should be producing some HOT well formed bases. But instead they are giving me “OK, a bit wild, low volume breakout” bases. This is not a market that inspires confidence.
If you are daytrader, whoopie!! Have fun trading your sad-lagging-pathetic BSC, LEH, GS, URS, BYI. The real champions and the greatest stock traders of all time will be moving on to the leaders. We will then wait for those leaders to breakout and begin their biggest, fastest, and least volatile price runs, while you hold on to your LEH that jumped 25% out of the gate and then goes nowhere for the next year as resistance bashes the heck out of it.
How some people out there can see volume below the 50 day volume average, the IBD 100 and 85-85 with D ACC/DIS ratings, NH losing to NL 55 to 80, see a VIX at 22!!! and think that is a bottom, a put/call only at .94, the IBD 100 underperforming the general market, the lack of ANY leaders forming ANY HOT chart patterns, and see the leadership we have and still think this is a bottom…let me phrase that better…..BELIEVE AND KNOW that this is a bottom are FUCKING NUTS!!! Stay far away from these “flippers and daytraders.” These nuts lost a LOT of money as I watched 99% of them go long the entire way down. Now they are bearish and buy a low calling a bottom, then accuse me of being a perma-bear though I have said to be in cash and was only 9% short. People like this are disgusting human beings and there is no doubt Sandy Wright was one of those people and is the inspiration for this paragraph.
While these “traders” who claim to be right this time who were wrong every other time–yet NOW they say they were bearish then and are only bullish now????–keep telling us to buy GS, LEH, and C here. I am telling you, if you just go to my ‘past big winners’ on my .com site and go to my blog and go into April to May 2006 and look at the returns, you can see for YOURSELF the HUGE returns I got in a LOW VIX SHITTY!!!!! bull market like 2005. These daytraders WILL NEVER produce for you a TASR. A TASR comes along once in a lifetime. THEY WILL MISS IT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I WILL NOT!!!! I NEVER HAVE AND I NEVER WILL. Do you think I missed GOOG, FSLR, RIMM, BIDU, and GRMN? Of course not! Ask the long-time subscribers like Yoni who knew I said to buy GOOG in the IRA, or FSLR and my 200% return in 6 months, or my GRMN return of 90% in six months, or RIMM which is setting up in a base I wouldn’t mind buying on a strong breakout?
The arguments made by the psychotic emailer Sandy Wright do NOT hold the test when you go into my trading records. If you take the time to read the 2005, 2006, and 2007 entries you can see FOR YOURSELF I did not miss ANY turn in the market. NONE!!!!! Even when EVERYONE went bearish at the end of 2006 on the low volume rally, I was still saying TO BUY STOCKS AS THE MARKET WAS MOVING HIGHER AND THE STOCKS THAT I WERE LONG WERE NOT!!! BREAKING DOWN. What? You all forget about that already?????
Well, I tried to make this commentary free and open to the public for comments. I had to shut the mauitrader blog after a NASTY individual pulled the SAME SHIT in 2006. I live a WONDERFUL life where if I wanted to I could scan my charts, place my orders, monitor my portfolio, and send out an email of my buys all within 1-3 hours, depending on how many stocks are in my scans and how much volume is in the market.
One of the arguments this twit made was that in the AM by not being awake I miss making money. Is she retarded? Has she not studied her history and learned that the greatest stocks of all time take 6 to 18 months to play out on their way to producing 200% to 80,000% (CSCO) gains. Listen I have my past big winners. You can see I have bought and sold the same stock and held for one month and gained 200% (MAMA in 2006, EGHT in 2003, and others!!).
People, if you are daytrading you will NEVER get rich unless you have ridiculous margin. If you are daytrading, why are you reading this? I am not for you. I am for the person who is SMARTER THAN YOU. I am here for the person who wants to spend time working a real job, have fun, or spend time with their family and only work 2-3 hours a day. Ask anyone on my site. All you need, once you master this method and decide you want to invest on your own, is 1-2 hours a day to scan your charts, place your orders, and monitor your portfolios. To actually watch the market all day is not my idea of fun.
My idea of fun, is waking up, going surfing, going to the beach, scanning my charts, going to the gym, going to the movies, placing my orders, going surfing again, going to a nice dinner, place my orders from my current holdings in my port, then watching TV and going to bed. I prefer having fun all day and only working 1-3 hours. Instead, for ALL OF YOU, to make YOUR LIVES BETTER, I SPEND 12-16 HOURS EVERY DAY ON THIS COMPUTER, TAKING ONLY 2 HOURS OUT TO SURF AND THREE HOURS OUT TO DEVOTE SOLELY TO MY GF. THIS I DO FOR YOU; NOT FOR ME!!!! I DO NOT NEED THE MONEY. HOWEVER, I HAVE NEVER MET ANYONE BESIDES THE MONEY MANAGERS AT IBD THAT CAN HOLD STOCKS FOR THE FULL 1000% TO 2500% GAIN IN THE BEST STOCKS IN THE BEST BULL MARKETS.
Daytraders…You all make me sick. Rather you have been doing it for 10 days or for 15 years (How stupid can you be, to see the CANSLIM results from AAII and still daytrade???????????), your methodology is seriously flawed and the fact that you do not use the CANSLIM methodology is proof that you have no clue about the stock market’s greatest ‘Monster Stocks.’
Try picking up a book by Boik called “Monster Stocks” or “How Legendary Traders Made Millions.” Better yet, go up to William J. O’Neil, Nicolas Darvas, Jesse Livermore, Bernard Baruch, Gerald Loeb, Richard Wyckoff, Lee Firestone, David Ryan, or Richard Dreyfuss and tell him you sat out that last downtrend from November and are now buying URS, LEH, and BYI. I am sure the greatest traders history has EVER seen would all bless that trade (heavy on the sarcasm).
So for all you bottom callers, I have one question to ask where are my leaders? Is it the medical stocks, oil stocks, machinery stocks, chemical stocks, building stocks, transportation stocks, metal products stocks, or auto manufacturing stocks? Sounds like I saw a lot of these stocks already from 2005-2006 and 2006-2007 during the rallies. The other sectors like medical and beverage only show up in bear markets. So we have laggards, defensive, and small banks rocking, and yet NO HOT charts in any of those or HOT charts in tech. So many are so close, like OTEX PCLN etc… But take a close look at those charts. Do they look anything like EPIC, SIGM, EVOL, EGHT, USNA, or SSYS in my ‘past big winners?’ In fact does anything out there look like anything in my past big winners.
Well, at least there is that one HOT CANSLIM-quality medical stock THAT I LOVE!!! That might be the gem in this rally. Solar stocks too. They are exciting. I wouldn’t mind those charts tightening up. However, until I see more HOT charts, there is no way I am going to play the amateur (even people trading for 15 yrs can be amateurs) game of bottom-calling. I will leave that for the dorks on CNBC, while I try to get barreled one last time at my favorite north shore break.
Before I go, I want to apologize one more time for having to close the comments. I really thought it could work this time as I NEVER imagined anyone!!!! could ever think my analysis was “biased” (considering I dont give a FUCK about being bullish or bearish as I GO WITH THE TREND–DUH!!!!). However Sandy Wright from NYC proved us wrong.
These fools are everywhere and their lack of DD is something I can not waste my time on anymore. My records from 2005-now are public, my 2002 longs can be seen in the Personal Notes within TCNET, and Yoni and David who are Platinum Members in my chat room have been with me since late 2004 and were witnesses to those longs during that time which included AAPL. So from 2002-now it is pretty much out there. Plus I have my OWN PERSONAL DIARIES with full trading records of buys and sells from 1999-now. That is why we have the ‘my past big winners’ section. And if you think everything you see there in 1999 was all that I had, THINK AGAIN!! Over 10 stocks up anywhere between 200% to 1,300% (CMRC CLRS ENGA) within six months back then that no longer exist today. I only wished I would have saved those charts then instead of doing all of this now.
ALOHA, everyone. I love you all that come here to learn and better yourself. I find the rest of you reading this that don’t like me PATHETIC! Stop reading me for God’s sake. Don’t you want to hurt me? LOL. 
ALOHA from beautiful Maui where the weather is perfect, sporting events start at 7am on the TV, the water is warm, and the scenery is to die for. Life is almost perfect! I am just sorry some other people can’t feel me. I keep it real! I promise you that I WILL ALWAYS KEEP IT REAL. I am not your normal wall-street drone who watches CNBC, reads the wall street journal, and LOSES A LOT OF YOUR MONEY. I prefer SportsCenter and MTV. Maybe you should try the switch also. It sure is fun and PROFITABLE! ALOHA!!
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What has made it so difficult to build longer-term positions so far this year is that we simply haven’t had stocks hold lows and build bases. We have had a lot of oversold bounces and volatility, which make for good short-term trades. But we have had few situations where we can feel that stocks have finally started to attract fundamental and technical buyers who are looking for position trades that will develop over the course of weeks or months.
It looks like me and James “RevShark” DePorre see the same thing, once again