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.
Nasdaq 100 And PHLX Semiconductor Index Lead The Way Higher On Higher Volume; Leading Stocks Are Setting Up And/Or Breaking Out Everywhere
May 2, 2008 | 1 Comment
COMMENTARY WILL BE SHORT AS MY SURF SESSION WAS EXTREMELY LONG AND TIRING.
I was impressed by today’s stock market session, especially when it came to leading stocks, tech stocks, and even more specifically semiconductor stocks. It was amazing to get a rally in such high-tech group of stocks. What made today’s rally even better was that volume increased on the Nasdaq and was above the 50 day volume average for the fifth time in the past few weeks. This was the fourth time it was a big up day with volume above average. And even though the NYSE has only had twenty-nine straight days without volume being above average, it is at least in an uptrend and that with low volume is OK with more, for now.
A lot of people are worried about the market being right at resistance and being oversold since our lows. You know what, that is fair, I will agree with that. We do need to be aware that we are running into resistance, we are overbought, and the volume has been close to pathetic during the rally so it is possible we could run into some heavy volume selling.
Breakouts And Nice Round Bases Are Everywhere While Commodity Stocks Look Extremely Toppy
May 1, 2008 | Leave a Comment
I see nice round bases everywhere in EVERY long scan and CANSLIM scan that I run. Stocks like our HA long from 3/27/08 is already up 60% and MA from 8/2/06 is up almost 500% since then and now we have a lot of pretty green BOP filled charts starting to round out and complete bases. If they make handles, two or three-week tight bases, or another base on base, this market should be heading MUCH higher. Everywhere I look I see good chart patterns. Now if only I could get volume on the NYSE. But did you see the Nassy? Another BIG DAY OF GAINS ON HIGHER VOLUME. That is now five days of above average volume since 4/17. Only one was lower and it has seen a very bullish response today with even higher volume and much larger price gains.
Volume is starting to come back, my existing longs are now starting to put in some real strong gains, and bases are forming everywhere. This is definitely a market I want to be long. If we fail and reverse, it would be the NASTIEST reversal ever because this is how stocks should be acting before a powerful rally and a reversal of this super-bullish action would be in one word: NASTY!
Do You Have That Feeling That We Might Not Have Put In The Ultimate Bottom?
April 22, 2008 | 1 Comment
Today was not that bad, overall, minus a few stocks that were completely earnings related. However, the fact that volume did in fact pick up is still none-the-less technically a distribution day. Still with volume well below the 50 day volume average, it sure is hard to get too bearish over a day like this. But at the exact same time, it sure is hard to get really bullish here when I see so many potential nice charts start to setup only to not make it.
The higher volume selling that hit the market today was the second below-average volume distribution day in a couple of weeks. While long-term this is nothing serious, on the short-term a few more days of this could put a monkey-wrench into this rally. Right now, as it stands, though, I would not be too worried about these two days since the put/call raises to such high levels on these kind of days. If the crowd was getting more complacent, I might be a little worried that the selling might pick up.
But the fact volume remains low and the fact that almost zero stocks have shown up the past two weeks as strong short candidates is a clear tell that this isn’t a market you necessarily want to be short…or long really.
Another Quiet Day Of Consolidating The Gains; Lower Volume After A Day Of Solid Gains Is What I Like To See!
April 21, 2008 | Leave a Comment
It was another great day overall for those that are long the stocks we are long (well at least until AH when one got a gnarly ride) as the market took its time drifting around today before a strong close that saw the market basically end where it started. That is except for the SP 600 which fell .7% and the IBD 100, which is loaded full of leading stocks with great fundamentals and strong price action, which rose 1.2%. The 1.2% gain by leading stocks is very impressive during a day where the indexes basically closed flat to slightly lower. This is yet another clear sing that despite the lack of any volume out there, shorting a dull market is not a very smart idea.
Some of the bullish data points on today’s session includes the new highs which once again beat the new lows. This time it was 164 to 97. Not a killing but still good enough. As long as I continue to see new highs beating new lows on this list I will continue to enjoy the uptrend even if it continues on with small volume. The put/call also rose today to .81 from .77, despite the IBD 100’s 1.2% rally. This has to be taken as a slightly bullish development considering that more people bought puts (meaning they became more bearish) despite the market rallying. This is probably because those put buyers were more focused on the SP 500 and SP 600. Too bad they were, some stocks that we are long like WSCI are showing why that is such a bad idea
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.
Stocks Show Some Life, as Volume Continues to Fade
April 3, 2008 | Leave a Comment
There is certainly a bullish tint on today’s tape, but the low volume continues to linger. Whether or not you believe we’ve ultimately have bottomed, you can not deny the fact that institutional support here is VERY WEAK. Until there is an indication of institutional support this rally will remain suspect.
I would like to see gains on heavier trade and low vol pull backs. Yesterday we got just that, but up volume days continue to be below the 50dma. This market needs many follow-throughs to confirm the action. This isn’t the time to be fully margined, this ain’t March 2003!
Market Quietly Consolidates Yesterday’s Gains
April 2, 2008 | Leave a Comment
There was nothing great or horrible about today. The only thing I can say is that the retards who told me to buy stocks at the open sure were wrong. I do not daytrade and anyone that was trading like this today has a lot of work to do to become a great trader/investor.
The pullback in the spoos (up on IBD) and small gains (on tcnet; on IBD and RM I show small losses) by the nyse and nassy were very solid overall as volume did dip. However, a lot of strong CANSLIM stocks that I went long yesterday went from looking great with strong gains to looking OK with good gains by the close. This is not how leading stocks act at the start of a brand new nine-month “time to get filthy rich” bull market. This is instead how bear market rallies develop. Could it turn into a bull market? Sure. But it is still going to have to prove itself by making strong gains on heavy to huge volume. Volume under the 50 day volume average is your clear tell that only amateurs are trading (you and me). The professional money has only come off the sidelines four times last month in the Nassy.
Until these guys start moving the market one way or the other, you would be FOOLISH to load up on anything long or short. Nothing has changed today from yesterday. I still have NO HOT CANSLIM or speculative long charts. I only have about 50 really good looking charts. And even the best looking ones are losing technical strength. So this is still not a market I have ANY interest in being heavily long. I remain around 70% cash with ONLY 5% short (how does this make me a perma-bear, Wendy/Sandy Wright?) with the rest of the port in longs.
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.
