Nasty Day Ends With All Indexes Suffering A Distribution Day; Day Six For DJIA And SP 500 Officially Puts The Rally Under Pressure
May 22, 2008 | Leave a Comment
For those that do not know what that means, it means that it is time to raise cash by selling down some of our longs. We recently have gone long quite a few stocks that have performed very well. Some of you made the right decision and took a lot of profits when some were up 20% to 50%. That was very smart. I did take some profits but with my larger holdings I was trying to hold for some powerful gains, thinking that volume still might enter the market to the upside as funds went back to work so they would not show underperformance.
Instead it looks like they are starting to return as sellers and with all the indexes reversing or failing right at the 200 day moving average it appears that the 50 and 200 DMA’s will be resistance for the market that the funds will use to sell into. I pray that I am wrong and that tomorrow we are up a lot so that we can resume the uptrend with our longs. However, I am not wishy-washy and know when it is time to pair back my positions. After today, it is time.
Some might be upset that you are not selling at the top and getting the gains you thought you were going to get. But trust me, one day, WHEN VOLUME IS HUGE ON THE indexes, these same stocks WITH EVEN BETTER AND MORE GREEN TO MAX BOP GREEN CHARTS will show up and run and produce 300% to 2000% gains. Sadly, too many of you will be used to selling too much off when the stock is up 10%, 25%, and 50% that you will miss out on most of the gains. For some of you, that are EXTREMELY new, that is OK. But for those of you who have seen this game before, you know that selling too soon is not the smart thing to do.
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.
Bullish Week Ends With Leading Stocks And The SOX Taking The Lead (Part Two)
May 18, 2008 | Leave a Comment
Randomly continuing where we left off yesterday, besides the put/call showing a little of fear coming back into it even with some indexes higher. One index continues to print what should be considered bearish numbers. That is the VIX. The VIX closed at 16.47 Friday and intraday on Wednesday hit 16.10. That was the lowest reading since October right before the November top.
I know I am very bullish on this market, even without volume, due to all the setups and charts that are already breaking out out there. But don’t question if I would turn, if we got like three major distribution days in-a-row. If that was the case and there was no bounce here, then you have plenty of reasons to get bearish and top calling. But as long as we have stocks like EXM DRYS, and even CNQR showing up, I think I will hold off on top calling. For all I know it will take the put/call to hit .40 and the VIX to hit sub-10 before stocks finally top off this current run.
People that have already sold all of their holdings that they started buying in March, just like the people that told me to bottom fish in March, are just not at the level they need to be at. Nobody, should be out of any DGLY, GFA, or any of the other recent longs like PWRD ISYS and OTEX which have not acting perfectly since going long (that is unless you are a newbie then you should lock in anywhere from 10% to 20% on DGLY, VISN, or anything else up 50% since we went long the past few months). However, they are not acting like GENC and it is a great thing. FEED, even before the recent selling, gave us plenty of time to take some off the table; I took 50% off before the move down. Did you?
How Much Longer Will The Good Time (The Rally Has Not Been Long Enough, To Be “Times”) Last?
May 9, 2008 | 1 Comment
I am not for sure about that answer but I have to admit the charts overall still look like they are trying to make a bottom. But like I have continuously warned about: if volume does not come back into this market on the upside, we are in danger of reversing some decent base building and that will probably discourage a lot of market participants which could open the door to more selling.
However, there is nothing wrong with being prepared, but until the market actually cracks, I will have to go with the short-term to intermediate term uptrend and ride the wave for however long it wants to last. The sad thing is that the way some of my stocks that looked great just a couple of weeks ago now look only average to somewhat above average. This is OK but in a brand new bull market, we would normally have 5-6 near-perfect to perfect charts right now. Instead I have one. One chart STILL looks “hot” out of about 4 or 5 that were starting to. Basically this has been the theme ever since April 2006 but thank God some gems here and there have still been able to shine through the rough.
It has been a long time since a WHOLE BUNCH of stocks setup in proper to perfect bases and then broke out and ran away. The truth is, I am only finding a few gems here and there and usually when I find a gem it fails. However, for every 3 or 4 that fail and that we can cut quickly thus saving ourselves a LOT of pain, we will always have one that can run. They might not be of high quality like AFSI but as long as 1 or 2 are around I guess that is good enough. But the further we go along without these near-perfect to perfect charts setting up or even holding on the more problems we will run into in the future.
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.
Stocks Put In An Impressive Rally On Stronger Volume As Leading Stocks Take Complete Control Of The Action; Volume Is STILL Below The 50 Day Volume Average And That Proves Institutions Are Not Buying Stocks Here In-Bulk
April 16, 2008 | Leave a Comment
I have been extremely busy today with errands, surfing, moving furniture, and now this concert I have to run to. So I am going to just go over every data point that I noticed today and tell you what I think about it. Overall, I like this rally A LOT but I have a MAJOR problem with it, FOR NOW. The volume is simply not there. With it below average for the 18th day in-a-row, it is clear that the big boys (they make up 70% to 75% of the markets total volume) are not investing/trading stocks here. This is all short-covering and retail action. So just remember this: the big boys are NOT moving stocks here. We are.
There were 185 new highs to 114 new lows which is the first clear victory I have seen since the downtrend started. That is very good. However, the top eight groups today were chemical-fertilizer, steel-producer, agricultural operations, building-residential, oil&gas-US expl/prod, building-heavy construction, food-dairy, and steel-specialty alloy. These are all OLD leaders from the previous big rally and just proves that this is just another leg and part of the long-term commodity rally.
Stocks Close Higher On A Pickup In Volume; Volume Still WELL Below Average And Charts Are Still Very Sloppy
April 15, 2008 | Leave a Comment
It was another wild day on Maui as more drama occurred in my personal life today. However, it is minor and it has been taken care of so hopefully I can get back to doing what I am supposed to be doing instead of wasting my time on other things.
Anyways, luckily for me it was just more of the same junk that we have seen the past 17 sessions as volume is still well below average and the charts still look junky. What makes it worse, is that the few good charts we had building have gone away. Not all but still it is not good.
That is unless you are focused in one area and one area only. Oil. Oil hit $114 yesterday and closed at $113.79 which is a new all-time high. I have a feeling we are going to be saying that a lot. Especially when I look at oil stocks and see that they account for almost ALL of the stock market’s strength.
There were only 90 new 52-week highs yesterday to a very large 222 new lows but what stuck out to me is that out of the 90 new highs 58!! of them were in the energy sector. That is a whopping total, especially considering that the next most came from agriculture stocks as they had 6 new highs in the group. Obviously, the oil&gas and energy sectors are the only two places to be in this market, unless you are in soft commodities/ag. There simply is no where else to go.
