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.
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?
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!
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.
Leading Stocks Outperform On A Dull Trading Day; NYSE Pulls Back On Lowest Volume Of The Year
May 5, 2008 | Leave a Comment
It was yet another very low volume market session that really proved nothing today that we did not already know about this market. The one bright spot that occurred today that was noticeable to me by the action in the stocks that were showing up on my price/volume scans. The IBD 100 gained a very impressive 1.5% compared to the overall market which was slightly lower across the board. The IBD 100 also joined the rest of the market with A and B acc/dis ratings as it now sports a B- after today’s action.
However, the losses from the NYSE to the Nasdaq were all fine in my book as all the selling came with volume lower than the day before. What is even more bullish for stocks, for now, is that the low volume selloff was the lowest volume for the year on the NYSE. This low volume, with stocks pulling back, is just how you want to see stocks move. If you look at the Nasdaq, where it is most obvious, you can clearly see that the market is rising on higher volume and selling off on lower volume. This has been the case since March 4th and is starting to become visually quite obvious to me. That along with the actual ACC/DIS being an A- shows that this index and the stocks that make up this index are being accumulated.
Even though the accumulation is not on HUGE volume it is taking place none-the-less and as long as that is the case there is not reason to fight this trend. There are so many things that have turned in the favor of this market that I just don’t see it wise to be very bearish here. Even the ISM service, new orders, and employment indexes all moved over 50 which signals expansion. The price paid index is back up to 72.1. Take that along with the data that we are NOT in a recession and the positive slope to the yield curve and I find it hard to be as bearish as some are on this market.
Bullish Week Ends With Mixed Trading On The Major Market Indexes; Individual Stocks Are Starting To Look Real Good
May 3, 2008 | Leave a Comment
It was another overall boring session to end the week but despite the overall boring tone to Friday’s session it was still a bullish session underneath as many stocks had solid sessions and many stocks that I was long had a very positive session. Overall, profit taking was quite mild in the AM and the strong mid-day rally into the close shows the bears are still not in control.
This kind of action on a do nothing day is just what I like to see in a market that refuses to do much. If there would have been a lot of blowups and negative action today, then I would have been a lot less enthusiastic about the non-event that Friday was.
By the close, the NYSE was up .6%, the SP 500 was up .3%, and the DJIA was flat. The Nasdaq finished lower but the intraday support and positive action by the close is something that has to be considered positive overall. I mean obviously if this market was real weak they would have sold them into the close.
Trading Scared and with Emotions Burns Through your Capital
April 25, 2008 | Leave a Comment
In the past few days we’ve seen some nice runs in stocks and some stocks that have pulled back after gains. An example would be MTL, which we are long for those who are Big Wave Traders. Yesterday the stock was being hammered in the AM. A few members were a big frightened and had no clue what to do. Since we are not day traders it makes no sense for us to be emotional about moves intra-day. By the end of the day, MTL was down 8% but volume wasn’t overwhelming and BOP actually increased. The stock is maintaining its uptrend and has not broken down on large volume through its 50dma or 200dma. We do not panic, Jesse Livermore stated “More money is made waiting on stocks.”
This market is setting up for a big upside run. We do not want to be cutting the stocks that are making moves and rotating into laggards. Stick with your winners!
I Started Talking About The Parabolic Runs In Chemical-Fertilizer Stocks A Week Ago And Today They Confirmed The Analysis; Is Their A Possible Rotation Into Technology Stocks?
April 24, 2008 | Leave a Comment
What a weird session! Finally, something interesting to talk about. And by interesting I mean that all the chemical-fertilizer stocks that I have been listing as “parabolic charts” in my forums the past week have finally sold off on very heavy volume. I am not sure if this is the ultimate top but we are very blessed to have an excellent futures trader amongst are midst and he has been screaming to short the commodities the pat few days. Now, while those selloff, finally, the stocks start to catch up. I hope this is the top to the commodities, but something tells me this will probably be just another short term adjustment.
Either way, it really doesn’t matter to me. I have taken my 400% and 500% gain from TNH and MOS back in 2006-2007 a long time ago and I am just waiting for these things to top so that I may try to take a piece of the pie back when they head back to earth where all stocks belong after a climax run.
Money is Made in the Wating Game
April 12, 2008 | Leave a Comment
Stocks are clearly not ready to break to the upside, nor downside. Friday’s painful % decline was not all that bad. GE’s dismal display of earnings had many on the street shaken. Although a GIANT, GE is not a leader in this market and we should be caring about leadership not who is the biggest. GE’s volume accounted for more than 1/4 of the NYSE volume, without NYSE volume would have been pathetic let alone down.
Thursday’s action was definitely a positive sign for the permabull/goldilocks crowd, volume surged while we had price gains. However, Friday’s action is showing that this market isn’t quite ready to break up/down. Jesse Livermore always stated that more money was made by waiting rather than doing. CASH continues to be KING, throwing a large amount of dollars at this market will only get your account to shrink.
We can certainly be taking small positions, we have been here at Big Wave Trading. However, we are keeping a lot of cash on hand so we can be ready for the next big bull run.
Low Volume Consolidation After The Big April Fools Rally Is So-Far So-Good; CANSLIM Stocks Setup And Breakout But Volume Is Still Suspect
April 5, 2008 | 1 Comment
A weak open after a very poor employment report that showed the US lost 80,000 jobs in March with the unemployment rate moving up to 5.1%. It was a pretty lousy number but considering the fact that we had 25% unemployment after the crash of 1929 it isn’t “that” horrible. But the media, with a Republican still in White House, of course, made it sound like all hell was breaking was loose.
Maybe that is why the market could not build on the weakness and instead rallied higher the rest of the day off the lows until 2pm when traders unwound some of their longs into the weekend. Overall though, it was very positive action, following a strong rally on April Fool’s Day. That now makes it three constructive sessions in-a-row where stocks have held on to the gains.
Volume, however, was, once again, nowhere to be found as it came in lower for the third straight day on both exchanges. I would be A LOT more happy about the low volume consolidation if the indexes were pulling back. But they are slightly rallying on this low volume and while not bearish, by far, I still would much rather see higher volume gains and lower volume pullbacks. It is good to see that two of the three days on the DJIA have been lower. But overall they are slightly rising on lower and lower volume. Overall not a good LONG-TERM development. BUT! it is a very good short-term development as this is the first rally attempt that has not been thrown back immediately.
