Cash is King and the Stock Market is Toxic
October 24, 2008 | Comments Off
For those who haven’t been paying attention to Big Wave Trading, we have been advocating anyone who is new to the market or anyone who hasn’t held onto a Monster Stock to be in 100% cash. Many, however, try to pick bottoms and continue to be wiped out. It is going to continue as many are not factoring in the global slowdown and what it’ll mean to overseas economies. Regardless, we have 1 chart when we should have MANY. This market is trash and will remain that way for awhile!
For the haters and the jealous, keep your trash out of here; especially Joey Fontone who told us we were idiots for being short and in cash. Joey said he was long the market, no Joey is swimming under water. Don’t be Joey.
MS
I Guess It Really Was That Bad
May 21, 2008 | Leave a Comment
I am not panic selling ANYTHING! But there is no doubt today’s action is negative and does hint that the uptrend very well could be over already. However, like always I wait to make my decision after all the data from the close is in. That will not be for another few hours.
No matter what, though, I will be locking in gains in a lot of stocks that initially have made big moves but have given so much back in a few short days that we must protect some gains just in case they become losses. So there will be a lot of selling tonight but if I am long a stock and it is still in an uptrend above the 50 day moving average there is no way I am going to sell it all.
Is this action disappointing? You better believe it is. Am I surprised? No. I have been telling you that there are no more perfect charts, have warned you about all the perfect charts turning into mediocre charts, and have been complaining about the low volume rally.
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.
Lower Volume Selloff Hits Stocks As NYSE Volume Is Still Below Average; DRYS, EXM, and DSX All Put In Nasty Intraday Reversals Near Old Highs
May 19, 2008 | 1 Comment
I am not going to write a long commentary tonight as I really don’t see anything too important out there that I need to spend too much time focusing on. The biggest event was the late day selloff in the stock market. However, some are forgetting that the DJIA and SP 500 still closed higher and that volume was lower on both exchanges, with volume being below the 50 day volume average on the NYSE for the 41st straight day in-a-row.
Also, don’t forget the NYSE short-interest has hit ANOTHER all-time high at 13.66 meaning that it would take 14 days to cover all the shorts on the NYSE right now, on average volume. Even without volume, the market has an upward bias and I do not want to short a low-volume market especially when the short-interest are at astronomical levels in so many stocks. That is how you end up with MXC and PDO.
At the same end that I don’t want to be short or not long this strong market, I suggest that those that CONTINUE to buy stocks the day before earnings STOP. I always take my signals on my charts, almost NO MATTER WHAT. This takes all emotions out. But when I saw that PWRD had earnings my total buy that I had planned for Monday morning was chopped by 90%. Those that were in the chat room KNEW I did this. However, those here couldn’t have but I made it clear that this stock was not safe to go long for newbies. Thankfully, I did not see any horror stories about PWRD. But I am still disappointed as I thought I had myself a possible monster stock. But since it has failed, the last thing you will see me do is justify a WRONG position and hold on to it “hoping” that it comes back. Nope, that stock, along with GA, must be taken out. BOTH of those stocks show why buying a move the day of the earnings is a bad idea. Both charts setup up a buy signal the day before earnings and had I FOLLOWED MY OWN RULES I would have a little bit more money in my pockets.
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!
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.
Nasdaq Leads Impressive Day Of Gains On Slightly Higher Volume That Is STILL Well Below Average; NYSE Slowest Day Since December 27, 2007
May 13, 2008 | Leave a Comment
I don’t know what I can say about this market that has not already been said. I find it very difficult to BS about the market when there is nothing to BS about. But I will give it a shot.
I do not like seeing the IBD 100 lag the Nassy on a day of such strong gains. The other thing I do not like seeing is the impressive gains on much lower volume with the NYSE having its lowest day of volume this year. This is a clear sign the big boys have no interest in buying this market. However, as you can tell via my recent longs, there are a few stocks they are still interested in buying. That is why this is still a stock pickers market and thank GOD I can pick them!
Until volume returns to this market, there is no way I am going to let go of 25-33% of my cash. I am going to continue to keep that on the sidelines while I wait for another perfect long setup like the stock that had a good day today. If another chart can show up like that, I would be more than happy to drop that cash position. But still with the low volume, it is hard to get 400% invested on margin.
Another Perfect Day For Our Longs, Especially Our “PERFECT” Long; Never Short A Dull Market
May 12, 2008 | Leave a Comment
So far things are looking good and unless we close at the LOD and wipe out all of the gains I will be very happy. My charts continue to look well as some of my largest positions (9 of them) are up HUGE today making today a great day after two days in the country/jungle. what a great way to start the week. The only thing I will be watching closely is the close and volume. I want volume higher by the EOD and I want us to close strong or if not strong to make it a perfect day, at least not at the LOD.
Also another lesson of NEVER chasing is today in GENC. I have been taking profits on the way up and if you have been following all my sells in the forums you will see that I was already out of 40% of it before today’s decline. Even after the swoon today, we still have a gain in it. Also, do not sell it intraday. The chances are much higher with it being down this much that it will have a strong rally before the EOD. Even if it doesn’t, it doesn’t matter, the stock is a full sell and we still walk away with a profit on the full 100% with me already being out of nearly-half when the stock was between a30% and 60% gain.
Our leaders are doing well and remember if you own a stock up 20% or more in less than two weeks (which we have had a few quick monsters), you need to hold them at LEAST eight weeks.
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!
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.
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