Bears Can Not Follow-Through On Yesterday’s Weak Close; SOX Index Leads The Market Higher As Technology Stocks Come Back To Life
May 16, 2008 | 5 Comments
I had another rough day today but this time it was on the financial end. I have been receiving a ton of 0% to 3% interest rate offers recently from my various Credit Card companies. Everything has always worked out well as I max out the balance, move it to my stock market accounts, get an excellent return on my money, and then return the cash back before the APR moves back up. This has ALWAYS worked well.
However, today I learned the horrible ignorance of some offers. Luckily, this one is the only one like this, but my 2.99% special offer and regular 9.99% rate, due to the mail NEVER SHOWING UP IN MY MAILBOX, has been JACKED UP TO 29.99%!!! I have been a customer since 1999 and this is Bank Of Amerca’s way of saying thank you for NEVER having a late payment. It seems even if it is the mail carriers fault, if you miss a payment, your rates on EVERYTHING goes to the highest possible and it take six-months to reverse. So now instead of a nice steady payoff, I have to take the full amount out of my stock accounts and pay the whole damn balance off as I refuse to pay 30% interest rate!! This completely ruined my day only because I get great margin rates AND NOW is the time you want to be putting that money to work. So today has gone completely wrong and therefore I am going to bullet point my talking points as I have no interest in writing a full commentary tonight. I wrote too much in the longs analysis anyways. Paying subscribers can get there fill there.
-the NYSE short interest ratio has hit another all-time high of 13.63. It now almost takes 14 days to cover all the shorts. WOW!
I Do Not Like The Selling After All These Nice Charts Have Set Up
May 7, 2008 | 5 Comments
Where are the mutual funds that are hoarding cash? If these guys do not step in and start buying stocks and we continue to have to rely on the shorts to cover higher to produce a rally, my faith in this rally is going to start to fall real fast.
I refuse to get as bearish as the crowd and I have been expecting a pullback but seriously if volume continues this below average pace, I just don’t see how in the heck this can turn into a long-lasting bull market.
So if you want to be a raging bull, go ahead. I still remain cautious but would love to get EXTREMELY long here as the charts are starting to round out. However, selling here after these nice charts started showing up would be very bad. Maybe this is why my short scans have been active, like I have been talking about on the ‘Silver Shorts’ area.
Hopefully, the elephants will return soon, or else those mice that are keeping them away will start to scare me soon.
A Market That Moves On No Volume Should Be Treated With Caution
April 12, 2008 | Leave a Comment
There is an old adage that goes “never short a dull market.” I couldn’t agree with that more and want to stress that it does not say “go all-in and long a dull market.” No, it says, “never short a dull market.” If we have to get down to the core of what that statement says it is clearly telling us that when volume is no where to be found the LAST thing you want to do is go short stocks as you are leaving yourself open to a large short-squeeze as usually happens in low volume markets. But do not think that due it saying that it is never smart to be short a dull markets that it means it is OK to load up on longs and be very long a dull market. It means to, more-or-less, MAKE SURE YOU ARE NOT SHORT but do not worry about being long either. To sum it up it is simply saying “when there is no volume you should have all cash.”
For those that do not understand why this is, it is not that hard to figure out. When stocks are moving up and down with no volume they become easy to manipulate by a few and when those few are manipulating stocks can move them and make them do whatever they want. I was just reminded that watching my favorite long pullback viciously on Friday. Volume was not that much above average yet the stock lost 9%. The stock is still above three supports, has green BOP still, and the reason for the trade still exist. So I will not be scared out of this long fully. But so many will be that it just goes to show how dangerous it is to be long in this low volume market.
Huge Gains On Heavier Volume Looks Good To Amateurs; The Professionals Know That Volume Matters And We Had NO!!! Volume On Today’s Rally
April 1, 2008 | 1 Comment
This is just another bear market rally, for now, and I will be more than happy to play it as I was only 9% short coming into today and 70% cash. I guess that means I was more than short. But according to some MORONS like Sandy Wright (Wendy), you are just too stupid to not get that today is a bottom. We will see about that. I have six new longs and three longs I want to add to my positions tonight but NONE of them make me excited. NONE of them look like ANY of my ‘past big winners.’
I’ll let the schmucks like Sandy/Wendy (or whoever this crazy is) believe that this is “THE BOTTOM.” I will continue to wait for proof and then get long the next bull market leaders, while the IDIOTS buy their BSC, LEH, URS, and BYI speculative-junk!!!
Cramer constantly produces 50% losses and I have NEVER!!!! in 12 years EVER owned a stock down 50%. Anyone hear of SGP? The stock I was short for a 43% gain that he was long for a 55% loss?????????????? Did you hear about that smart Cramer going long that? Or how about AUY, NYX, IMA, C, or any other blowup he has recommended?
Another Wild Intraday Session Ends With Not Much Happening By The EOD; Cash Is Still King In This Low Volume Market
March 31, 2008 | 23 Comments
It is hard to continuously say the same thing over and over but it is true. There is nothing to do in this market other than to keep your trades small and your cash high. Especially, if you are a perma-bull as we are now finishing the month down for the fifth time in-a-row. This is much different from anything we saw from 2003 to November 2007.
I know a few traders that for some ungodly reason were bullish after today’s close. This was because they said the Fed has a new way of making sure the market has bottomed. Once again, the same market call but this time from different players with a different excuse. No matter how many people try this argument with me and no matter for what reason it is, I simply will not believe it until it is true. When I see the market making strong gains on strong volume with top stocks breaking out and moving higher (heck there doesn’t even have to be heavy volume on the indexes; I just need some HOT freaking charts, for God’s sake), then I will wrap my arms around this market just like the perma-bulls have been the entire way down.
The right thing to keep on doing is raising cash with stocks that we are cutting our losses on or taking profits on and to keep the new buys or shorts small until a trend is clear. Right now, the market has no clear trend as a low volume trading environment has now entered the stock market which could help build some nice bases. However, nothing is hinting at that what-so-ever as few NEW and FRESH stocks are forming bases after a previous uptrend in innovative companies with great fundamentals.
Another Boring Day Ends With Stocks Pulling Back On Lower Volume; God Help Us All If Tomorrow Is As Slow
March 28, 2008 | 2 Comments
I had a lot of errands that I had to run tonight and the funny thing is that the most important one still is unfinished. And you know what, sometimes that is just the way it goes. I could have been upset that I did not get it done but instead I decided I would cash in my chips and wait for another day.
That right there is exactly how I see the stock market right now. This is a market that looked like it was going to deliver us something good and instead it ended up having a closed sign on it and now we can not get what we want. Many traders want to enter this store and take the merchandise out of it and play with it but the market is closed to CANSLIM investors and there is still nothing I really want in the store anyways.
If that did not make any sense, because I am too tired maybe this will. Tomorrow I am going to go driving around this island for surf. The chances are that nothing is going to be out there. But I am still going to bring a shortboard and longboard and PRAY that something exist out there. If I drive around and there is nothing out there, do you think I am going to paddle out into a lake of flatness? Or let’s say it doesn’t even hit my knees, do I then take my shortboard out? OF COURSE NOT. When there is nothing, there is nothing. Trying to surf waves that are NOT there is stupid and kooky. You want to look like a freaking schmuck? Paddle out into Waikiki waves with your shortboard. Let me know how the “vibe” is.
A Weak Open Lingers All Boring Day Long As Stocks Close Lower On Lower Volume; ORCL Disappoints AH
March 26, 2008 | 7 Comments
It was an extremely boring day on wall street today as a pair of really negative economic reports failed to get the bears to take advantage of the macro backdrop. Considering durable goods announced by the Consumer Department fell 1.7% in February, crude oil bounced $4.68 to $105.90, and new home sales were the lowest since 1995 there was plenty of reasons for the market to take the gains and hammer them into oblivion.
But that didn’t happen. The market did fall on the day but the early morning losses found some buyers and after one more turn near the final hour stocks closed with minor losses, with the DJIA and SP 500 leading the way lower with a .9% loss. The good news, though, is that leading stocks, via the IBD 100, rallied .2% on the day and the SP 600 only lost .4%. So there was some relative strength in the leaders and the small-caps which is always what you want to see in a rally.
Too bad another thing you like to see is volume. Since normally heavy volume is good for rallies, it can’t be that great that we constantly rally on lower volume. However, when those low volume rallies are followed by lower volume pullbacks it is possible that in the future we could have a market rotate into a market where heavier volume comes from the combined low volume pullbacks and rallies. This is what happened post July 2002 to the October 2002 bottom.
Dow Follows Through; Issues Remain
March 21, 2008 | 1 Comment
IBD has called Day 8 of the Dow Jones Industrial average a follow-through day for the market. This ultimately confirms the most recent rally attempt. It takes only one index to follow through to confirm a market rally regardless if any other index takes out its most recent low.
I am not as bullish in the short-term has Joshua however, I do believe we could see a rally. Ultimately, I do believe that this rally will fail at some point in the near future. New Highs are not turning around, New Lows continue to dominate and the number of stocks above their 200dma continues to be lower than stocks over their 20dma and 50dma. Ideally, you want to see more stocks above their 200dma. This would suggest that a long-term uptrend is in place.
Although we are in a confirmed market rally, there still remains the high risk of this rally failing. Cash is King and longs should be kept small.
