Indexes Slide on Mixed Trade as The Nasdaq Marks its 5th Day of Distribution; Fueling the Decline was Treasury Spreads Widening to Historical Levels
May 27, 2009 | Comments Off
By Market Speculator
Stocks took quite the tumble as Treasury spreads widen after fears about the credit worthiness of US Treasuries. The fear is the governments ability to feed the Treasury market with more paper once Obama’s record $1.75T deficit. Although volume was below the 50dma volume did increase on the NASDAQ giving it its 5th day of distribution. I wouldn’t call today a Major Day of Distribution, but it does throw caution to the wind regarding the health of this market. Most likely the biggest question that remains is when cash flees the bond market where will it find its place; stocks, commodities, forex? Wherever it lands, we’ll see it in our charts. On the whole, today wasn’t all that bad and highlights you must be cautious when distribution days mount.
Obviously the biggest scare of the day was US Treasuries. It should come to no surprise that TBT and TLT are foreshadowing some nasty times ahead for the Treasury market. Look for yields to take off as money bolts from treasuries. China, the biggest holder of US Treasuries has been balking at months at buying new paper. If China puts the brakes on you can bet your bottom dollar we’ll see record days in the Treasury market. We could be witness just another bubble bursting and this bubble will have far more devistating effects on the American People.
What A Difference One Week Makes; Leading Stocks Signal That There May Be More Work To Do Before A Real Strong Rally Can Ever Take Hold
May 24, 2008 | 4 Comments
There is no doubt that I am suffering my WORST Multiple Sclerosis attack to date. Since Saturday I have basically been bed ridden and RIGHT OFF THE BAT I want to apologies if any of this is a little hard to follow because I feel like trash. I am not sure if this will effect what I am about to write but do me a favor and do NOT bust my balls if I misplace a word or misspell a word. My life is too short to deal with this.
I had a completely different approach in mind when I first wanted to write this but I figure I will stick with the facts. The facts are as quickly as this market looked like good times could be returning it in fact was possibly throwing us false “all clear” signal. Now while I never fully bought into this rally due to the volume, I still held hope that the rotation that I started to see into technology stocks would continue. Now I am beginning to wonder if that is what is happening or if they are making it appear that this was the case just to shut the door in our face.
At the end of last week things were looking very strong for the stock market, despite the low volume, as a lot of stocks that were in our portfolios were producing some large gains. But without ANY warning or clear reversal signal, the stocks started pulling back slowly getting rid of all the gains. The lucky part is that we did sell SOME as they pulled back since volume was higher. But the stocks pulling back on low volume and green BOP gave us no reason to sell. Since stocks that move up 20% in two weeks should always be held for at least eight-weeks it seemed stupid to sell anything pulling back. However, now it appears we should have taken more gains. This is the one time not taking profits quickly hurt us. The low volume was the tell and I should understand that next time as this is nto the first time I have witnessed this action.
A very Boring Session Ends With The Market Higher But On Lower Volume
May 23, 2008 | 3 Comments
Today’s market really did not have anything meaningful within it to focus on today. But what can be said about today’s rally is that it came on lower volume which is not what you like to see after a distribution day. However, it is good news that out of all of my longs, even though I had plenty where profits need to be taken, there was not a single one that needed to be completely cut for breaking the original thesis of the trade.
Without anything happening today that changes anything in the markets, I think it would be a waste of my time and yours if I put a bunch of junk up here that was just words to fill up a page. Kind of like most of the stock market commentary I read out there. There sure are a lot of long-winded people like me out there. Anyways, if you are at least a silver subscriber you have plenty to read on the new silver longs/shorts sections as I have typed out a few important notes over there.
For those that will still be here on Friday (a lot of our chat members have already checked out), I hope you enjoy trying to stay awake. Because that will more than likely be the call of duty for us tomorrow. I would not be surprised if volume is near the lowest or actually is the lowest day of the year and if we can move more than .5% up or down I will be floored.
Was It Really That Bad? Nassy Falls On Lower Volume And NYSE Volume Rises But Remains Below Average; How About MXC, CKX, FPP, PDO, ROYL, and CLR!!
May 20, 2008 | 2 Comments
It sure was not a bullish day but at the same token it does seem people are treating today as the beginning of the end and in my investment life I have learned that when everyone thinks that something is going to happen the opposite usually happens.
on that note, today’s selling sure did bring out a lot of people that are worried about further selling. To that, all I have to say is if you have some profits and do feel afraid you will lose some. Why don’t you sell 20%, lock in some gains, sit back and relax, and then let the stock TELL YOU what to do next. For now, I don’t see a reason for all the worrying that I saw today. How I judge how bad selling is is to see what it does to my current holdings and to see what the short scans bring up.
When it comes to the 70 plus stocks I am long (14 are of good size the rest are nothing that will change the fate of my world) there were ABSOLUTELY ZERO that gave me a FULL sell signal. Everything that pulled back did so either on low volume, barely pulled back on higher volume and had a bullish reversal before the close, and/or if it did pullback heavy it did not close below either significant support or the 50 DMA. Now I hate to be a party pooper for the HUGE short interest that is out there but facts remain that when a market is ready to top I will not only have a few partial sells I WILL HAVE A FEW FULL SELLS. Tonight, I had NO full sells.
A Very Bullish Start Ends With Most Indexes Closing At Or Near Their LOD; My Best Stocks Held Up Well During The Selling
May 15, 2008 | 2 Comments
Well, that sure is not how you like to close them. Especially with volume picking up there while we sold off right after hitting the 200 day moving average on the Nasdaq. The good news is that the market still gapped high enough in the morning that all major market indexes were able to close with gains. But there was a negative blip in regards to leading stocks as the IBD 100 fell 1.2%.
Thankfully, even though volume ticked slightly higher on the Nasdaq, the NYSE had volume come in 1% lower on the reversal. To go along with that the volume was below average on the NYSE for the 38th straight session, volume was barely above the 50 DMA on the Nasdaq. With the volume being higher and prices being higher that would still be bullish despite the reversal. The volume simply was not full of conviction in the form of huge clear distribution. I guess you could count 4/1 as average daily volume on the NYSE, by the way, but still it wasn’t above average so I guess the point still stands.
Overall, the market is in the same situation as it was last week. We are rallying on lower volume with this clearly being a stock picker’s market. The good news, for me is that is what I specialize at.
Distribution Day Hits The Indexes As Stocks Selloff Erasing Some Of The Hard Fought Gains Made The Past Four Days
May 8, 2008 | Leave a Comment
There is no other way to spin today’s action other than it was downright ugly. However, after going over my personal holdings and seeing how few stocks needed to be sold and how few actually fell on higher volume, it became clear to me that I am going to have to see more selling to confirm that this short uptrend is dead. The way my leading stocks acted today and seeing how some of the stocks that I purchased large positions in actually made gains today, it just seems smart that it would be wise to not panic here and lose our positions in our leading stocks. This kind of selling is not good but it is normal to see this during uptrends. You can review any uptrend you want and you will see they all have one, two, or three distro days along the way.
Today’s distribution day did come with most indexes losing 1.8% which was a nice chunk lower but the NYSE’s volume was below the 50 day volume average for the 33rd consecutive day. The Nasdaq’s volume was higher than the day before and above the 50 DVA but the volume on the index was still lower than 4/24 and 5/1’s rally on higher volume. The selling was heavy but nothing that smells of SERIOUS distribution. I will need to see further confirmation before I sell stocks that are still holding support. Especially when the majority show either intraday tails or low volume on the selling.
Not Only Have Our Longs Outperformed The Overall Market The Past Month I Can Now See A Lot More Bases Being Built
April 19, 2008 | Leave a Comment
This means that if these bases all complete their right side, we are going to have a powerful market rally with or without volume. I am stunned by how many nice charts there are now AFTER JUST ONE bullish week where leading stocks outperformed the rest. The only bad news is besides the stock that we went heavily long two days ago that is now up 21.5%, there is nothing out there that has that perfect tight bullish price action where the price is bouncing off the 50 DMA and breaking out in a base longer than three weeks, that comes with extremely huge volume on the up days and extremely quiet volume on the pullbacks, and has a lot of green BOP showing all over the chart with max green BOP at least the last five days. There are a TON of high quality CANSLIM stocks that are setting up and breaking out of great bases, however, and when I can’t find my PERFECT charts, there is only one type of stocks to load up in. That is the CANSLIM quality. That is why MTL and TITN are very large positions yet neither one look like any of my ‘past big winners.’
I asked O’Neil which he would pick: a perfect chart in a stock with 70 EPS and 95 RS or a well-formed chat that is a bit wild, has some distribution, and other flaws but had a 99 EPS and 80 RS. His response was that you go with the stock with extremely strong fundamentals yet flawed chart. That is why TITN was a large buy yet has nothing but red BOP for the month of April.
