Another Late Day Rally Lifts Stocks Off the Bottom but Notch a Distribution Day
June 10, 2009 | Comments Off
by Market Speculator
After gapping higher at the open sellers took over the market sending stocks lower throughout much of the day. Fueling selling was another hiccup in the Treasury Auction as yields once again moved higher. Fears over the credit quality of the United States and inflation is sending Treasury holders to demand higher yields. Crude oil didn’t help matters as the commodity hit $71 a barrell. In the face of this bad news buyers stepped up late and turned into what would have been a major distribution day into a minor distribution day. Once again, we are seeing underlying strength even when it appears the market is about to break to the downside.
Taking a look at New Highs vs New Lows only 8 New Lows were made on the NYSE and NASDAQ. More than 116 New Highs were made during today’s session. The only way to view this is in a positive light. Remember, ultimately two things are needed: price/volume and leadership. New Highs vs. New Lows are simply a secondary piece of information that we can use to analyze the market. However, it will never trump the importance of leadership and price/volume action.
Ten Banks Repay TARP Funds as Quality Growth Stocks and the NASDAQ Take the Lead
June 9, 2009 | Comments Off
By Market Speculator
Quality growth stocks and the NASDAQ took over leadership today as volume rose on the NASDAQ but pulled back on the NYSE. Volume on the NASDAQ ran higher all day long showing the price action had institutional support. Even more important quality growth stocks emerged once again as leaders in the market. Over on the NYSE volume was tempered by the financials as ten banks are set to pay back TARP money. Reaction was mixed from the banks as it was mostly priced into the market. Overall, notch another positive day for the market.
It was very nice to see quality growth stocks stepup and take over leadership as we need these stocks continue to lead us higher. We have seen a few quality stocks that passed their pivot points on volume. Being able to spot these winners and get in them is what this game is all about. In addition, getting the leaders with size, meaning your position size is a substantial part of your portfolio. For example: if you put on a 1% position, in order for your portfolio to grow 1% that position needs to move 100%. However, having a 10% position to grow your portfolio by 1% all you need is a 10% gain. Remember, this will only work if you are cutting your losses short. By not doing so, you run the risk of completely destroying your trading capital. Position sizing is important when you are in a confirmed uptrend with quality growth stocks are at the helm.
Highlighting cutting your losses, every successful stock market operator always cut their losses short. Many pros often times will cut a position with only a 3% loss. I for one will use anywhere between 3% and 8% cut loss. It is the “art” of managing your portfolio. Factors such as how leading stocks are acting, the overall market, and how the position is acting all go into factoring where I will cut a stock loose. Remember, you are trading to make money, not lose it. The most important part regarding managing your portfolio is cutting your losses short and being prepared to get into a leader.
The SP600 And Nasdaq Lead The Indexes Higher On Friday; Leading IBD Indexes Are Finally Leading The Overall Market
June 7, 2009 | Comments Off
I had a wonderful weekend enjoy this beautiful island of Maui. I don’t plan on being here for too many more years and whenever weekends like this come along I AM going to enjoy them. To not would be damn foolish.
I work over 12 hours every day making sure that you are making the money you see below in our current longs and to do that I need my down time. This weekend, despite all the fun I had, I got all my work done for subscribers. However, those of you that come here to see what I have to say this weekend will only be greeted with this: it is a bull market you know. That is about all I can say that hasn’t been said ad-naseum. Market Speculator has echoed my thoughts on this page all week and most of you are in tune with the market trends. That is great news.
However, if you continue to face problems in the stock market, then that means you are doing something wrong. If you are having problems making consistent money, do not have any set rules, and/or can not seem to hit any home runs, you are not alone. Many people have these issues but at BigWaveTrading.com the rules we advocate come directly from the rules that IBD has put out for everyone called CANSLIM. For those of us that know how to use this methodology the market has not been as difficult as the talking schmucks on TV make it sound.
A Late Day Surge Off the Lows Paints the Day Bullish as Stocks Pull Back in Lighter Trade
June 3, 2009 | Comments Off
By Market Speculator
Taking a breathier, stocks pulled backas the market digests the most recent move. Stocks did touch overbought conditions and it didn’t come as a surrpise the market put in a day of consolidation. During the last 30 minutes of trading stocks found a bid and moved off the lows near the opening levels. A move like this shows institutions stepped in late in the day to support their stocks. Again, it was an important sign to see the support come into the market as the day wrapped up. The market action is showcasing that the bulls are in charge and ready to continue the uptrend.
Leading stocks held up quite nicely today as many of them fell back on lighter trade. It is important to see leading stocks hold up when the overall market pulls back. This is another sign of strength when you have leading stocks pulling back but not leading the market to the downside. It will be important for this type of action to continue; support for the leaders must remain for this uptrend to have legs.
Following Through on Friday’s Gains Stocks Stage Another Rally on Strong Volume
June 1, 2009 | Comments Off
by Market Speculator
From the opening bell to the close stocks were being accumulated in a big way. Volume once again soared showing institutional support is behind stocks. We even saw quality growth stocks bust out and show tremendous strength. It was very important for the stock market to follow through with very nice gains after Friday’s close. The action from stocks today is showing there is more room to run to the upside. Leaders have emerged to show quality is where the action will be at and the time is now to get on board with them. Leadership has taken hold and the overall price and volume action of the market is signalling this market wants to roll higher.
An important occurance happened today and that was the price and volume action following through from Friday’s gains. It would have been terrible for stocks to roll over and essentially would have signaled the market wasn’t going to move higher. Although we could have moved sideways in lighter trade today’s session was much more favorable. Today proved institutions are willing to put their capital to work in stocks. Not only are they willing to put this capital to work they are supporting the quality growth stocks. We absolutely need institutional support for this market to go higher and we are seeing capital flow back into stocks.
Shorts Ran For Cover as Stocks Run Higher on Lower Volume; Some Leaders Show Support With Volume
May 18, 2009 | Comments Off
Lacking any economic catalysts to begin the week stocks started the day off gapping higher. Volume tracked lower for much of the day indicating institutional players were sitting on the sidelines staying away from the action. It appeared the action was driven by short-sellers covering their positions. It was certainly disappointing to see volume come in lower on such a large percentage move on the indexes. At this point, a day with gains is nice but at some point we need accumulation to support this uptrend.
Price and volume action is the most, the most important action to consider on the exchanges. The next is seeing how leaders are acting. Leaders are found in the IBD 100 and IBD 85-85. Normally, leaders emerge rather quickly from market corrections. However, this correction was quite severe and from past severe market corrections leadership may take months to form. It should come to no surprise that this market is lacking IBD leadership. At some point, for this uptrend to continue the IBD 100 and IBD 85/85 indexes must be leading this market.
There were some positives today as we did see leaders have an excellent day. A few of them found support with volume. A clue that there is institutional support for these leaders. We are on top of them here at Big Wave Trading and are ready to take advantage of these leaders if they begin to breakout. These leaders will run and show is Monster Stock gains. Not only will they be Monster Stocks but they will be the tell when the market begins to stall out. Junk-off-the-bottom have led this market up to this point but for this uptrend to continue any further we’ll need to see the IBD indexes lead.
NYSE Sank on Higher Volume as Indexes Close Out at the Lows of the Day
May 13, 2009 | Comments Off
That sinking feeling ended up being spot on as stocks could not withstand the selling pressure. NYSE volume jumped higher while the NASDAQ slipped lower. However, the price destruction on the indexes have been far too much to qualify this market to be in a confirmed uptrend. It is in our opinion we have crossed back into a downtrend while this market will look for a short-term bottom. Leading stocks were hit hard; one by one they have been knocked down and out which is a BIG signal there could be more downside to come. The day certainly could have been worse, but the price action was terrible.
There wasn’t any support to be had at the end of the day like we have seen many times. Just last week Tuesday and Wednesday saw the market get support only to see Thursday’s market take a tumble on higher volume. Last week’s action, although bullish in nature was a sign of the market stalling. What is important now is to see if we can find footing in the market while having leading stocks setup in bases. There are a few left that might be able to form sound patterns and be worthy of going long. At this time, it is best to take a defensive posture and not let your capital slip away.
Volume slides Across the Board as Small Cap Stocks Lead the Market Lower with the S&P500 Not Far Behind
May 11, 2009 | Comments Off
Opening the week stocks end lower on lighter trade as Big Cap Techonology stocks aid the NASDAQ finishing well off the days low. The S&P500 was unable to sustain any buying as the index closed near its low-of-the day. A day of consolidation is welcomed, but having a large percentage drop is a bit concerning. Let’s not overshadow the NASDAQ’s resilency here even though volume finished the day lower. Today, in of itself wasn’t a bad day but will need to be taken into context over the next few trading sessions.
A positive note would be to see the Small Caps lead the market tomorrow in higher trade signaling the market is being accumulated. It’ll be important that we do not sell off any further on volume as this would highlight there is more weakness to come. Remember, we have come a long way off the lows and have yet to see the market consolidate it’s move. Ideally, we’ll remain quiet in the indexes over the next week or two while we have the IBD Indexes taking charge. IBD indexes are a signal of strength and will alert us whether or not the current rally has the juice to continue the uptrend. Leading stocks in leading industries are our key to this the uptrend and we are in need of their leadership.
The issue for the indivdual trader is whether or not you have been caught up in the intraday noise. It is the market’s job to wear out its participants and if you do not have a sound game plan you are going to be warn out along with your capital. If you are following the number one rules, cutting losses short you are most definitely on the path of destorying your capital. Cutting losses will save your portfolio and will keep you in the game for when CANSLIM stocks begin to start flying.
IBD Indexes Lag, Along With The Nasdaq, As The Market Starts To Feel Toppy On The Short Term; Individual Stock Charts Look Great And A Low Volume Pullback Would Do Wonders For Their Charts
May 6, 2009 | Comments Off
top longs/(shorts) w/ TOTAL returns since 1st purchase making me money TODAY: ASCA 48% SOLR 40% INOD 40% KONG 28% ARST 25% (MOS 46% CHTT 15%)
By Market Speculator
Today was owned by the banking sector as the “Bank Stress Tests” were released today. By in large this stress was viewed vastly different from all sides of the aisle. Regardless of anyone’s opinion, the market’s opinion was positive as banks roared higher pushing the NYSE composite Index and S&P500 higher. Lagging behind was the NASDAQ composite index and the IBD indexes. It shouldn’t be a major surprise seeing the banks leading for one day as the stress tests showed most banks can withstand further downside, but we’ll need to see leadership from the IBD indexes. Once again, we did see major support for the NASDAQ and other indexes showing there is a bullish tint to this market.
It would be fabulous if we could simply settle and consolidate at these current levels. This market has made a long run from its lows and its time we head sideways for a week or two. However, this Friday we’ll see the latest employment figures from the government and it is sure to set the market in one direction or another. At this point, if we could simply get quiet action with the NASDAQ holding its 200dma it would be quite constructive. It would allow the IBD 100 and IBD 85/85 indexes to retake the lead in this market.
