Ugly Open Reverses With A Strong And Choppy Intraday Session; Stocks Still Close Lower Despite The Intraday Rally
August 2, 2008
Even though inedexes closed down .5%, they really did not go very far but they did do it in a very choppy motion. So unless you like turbo trading support and resistance for peanuts then there really is not a whole lot to do. I do understand that some people love daytrading and love to spend all day trading. Well if you enjoyed Friday then you are for sure a diehard market fan. It simply is not the way I want to spend my time. Now rewind back to 1999. I was making a TON of money HOLDING stocks. Not daytrading. But if I was bored had access cash and did not have perfect stocks to invest I could and would daytrade. I have to admit it was not as much fun as I did not get to see my pretty max green BOP charts and I did not like the feeling my heart had when I had multiple positions on. But if that is what you like doing then enjoy daytrading.
Right now, I think trading to the downside is the right game but as it is clear the markets are trending below the 50 and 200 day moving average. I tell you what, if some of you are impatient and can not stand having on longs (even if the chat is ugly; why???) all you need to do is go out and have fun until you at least see the price bars above the 50 day moving average. Once you see that you know that in the short term prices are moving higher. Then you can go in and look for max green BOP beauties like my XSI long that I have on. It isn’t perfect but nothing is in this market. I just want you to study all the green all over that chart and notice the perfect bounce/breakout on volume in late June. If you still don’t see these after the 50 DMA is taken then sooner or later you will once the indexes prices on the averages cross back above the 200 DMA. Once the indexes are above the 50 and 200 DMA there will be a few green filled BOP charts (hopefully) for us to enjoy.
If not there will be at least some CANSLIM quality longs that will show up in our new leading industry groups that will produce some huge returns. Trust me when this market turns I will be in the leading stocks in the new leading industries with the perfect CANSLIM stocks. If the chart is loaded with max green and breaking out of a perfect pattern or the stock is a perfect CANSLIM quality long breaking out of a solid pattern we will be long and ready to make a lot of money.
I know a lot of people are sick of waiting this market out but that has to be done or else you looked like all those idiots that were yelling at me in January that the market bottomed an that buying bank stocks had to be done. Well some told me to load up on JPM, some told me to load up on GS (that wasn’t that bad of a pick), but some told me I was an idiot for not buying MER. Well thankfully I saved myself I think a 50% loss. But I do want to explain how I look for potential bottoms. First off I love to see sentiment like it is now. I think the put/call has backed back off which shows that we are bit too complacent which is not good. Before we were a bit fearful as the put/call hit numbers like 1.3 on the most recent low which was real bearish. That showed the dumb money was definitely buying puts which is bullish long term.
On top of that, the bears in the investors intelligence survey were just hitting 50%. That is the first time in five years that 1/2 of the newsletter writers were bearish. That goes along with the weak week before that showed only 27% bullish which was also a five-year low. These are some extreme numbers. The only thing that would have been better was a put/call ratio around 2.0 as the 1.3 reading while high was still below the 1.4 levels in March. Still it was bearish out there.
However, there is one stock in particular that I am watching to help tell me if we have put in a tradeable low. My first clue that we have one is that my two most recent near-perfect charts have hit me with immediate advances one lasting 15 trading sessions and one lasting one month. And one stock that had a HUGE bullish intraday reversal on the largest volume ever after many years is my bullish tell. I will need all three stocks to continue to work in fashion for me to believe that my baby rally with a weak market can last. It is just nice to know you that we can make some gains after such a long time of ugly action. DGLY and PDO were godsends while BRKR, BKE, BCO, and AEHR were typical of a market near the end of a bullish trend. I personally hope the worst is over but something deep down tells me “yeah right big boy.”
Some of the reasons I don’t believe we are at a real bottom is just because I hear too many people talking about how they would like this to be the bottom. That is not the usual “I give up” repsonse by most market players that I nomrally hear at bottoms. But I have to admit I only briefly catch stuff from CNBC, the free chat rooms, and random comments at Realmoney.com. But just those few visits tells me a lot about a market and even though many are VERY BEAISH on this market a lot are still “believing” in a bottom. Normally for there to be a real bottom people have to completely give up. I don’t feel like people have completely given up. I know that the fact that I see some hot chats working indicate to me that the market could be at a bottom. But if I don’t get much more from my two longs that are near-prefect and instead the gains end abruptly, like DGLY and PDO, I will be upset and sad and ready for more losses before we can get gains.
Trust me, my hot chart will come back, just like they have in all bull markets. But trust me that patience and finding other hobbies is necessary in markets like this. If you spend every day waiting for a TASR or FMDAY of 2003 to come along, you will wear yourself out and blow yourself out via boredom and burnout. Poor market conditions throw up too many ugly charts and unless you love shorting America and the market it is very possible that you will burn yourself out and by the time the end of a 2002 to 2003 market comes, you will be long gone and miss the beauties like USNA and EPIC. Both were beautiful and perfect and both were missed by 90% of investors who failed during the 2000-2002 market fallout.
Why did I survive and why will I survive this bear market and the next? I love this game!!! You must love this game if you are to make money. If you get involved in the stock market to make money, you can do it but it sure is not easy. My love of this market is the reason I am holding cash saving myself from financial ruin like so many others while being long a few stocks that are moving higher despite the falling market. I love this game and my love for this game ensures that you could make money if you too love this game. I promise you one thing. In my hands, you are very safe. Just study all my past big winners from 1999-2008, notice how similar they are, and remember I will find these and make a lot of money in the next market environment that rewards me for finding these kind of charts. I can’t wait. I hope you are excited as me. In fact, I hope you are more ecited than me. Some of you are but some of you are impatient. Thank God you were not around during 2000-2002, you never would have received SINA, SOHU, GRMN, SSYS, USNA, HIL, FMDAY, TASR, EPIC, EVOL, MOBE, or even IST, AAPL in 2004. Life was good then and life will be good again shortly.
It is very rough right now but without these moments, I would not have the moments like 1999 and 2003 that I use to make a career. Anyone can get lucky for a year, but can you beat the market year in and year out? Not only that when you have the chance to destroy the market do you? You must not beat the market every year but in the few years when the market is up 10% to 50% you need to beat the market by double to triple the returns. Once you get in a real bull market and the market gives you the max green BOP charts with top CANSLIM ratings you need to KILL the market. If you can do that while just beating the market in years like this you will make a fortune by the time you retire.
Those of you that read this site to get rich quick, you better pray I find another MAMA in December of 2006 or a BFUN in 2003. MAMA was a 230% gain in 11 days and BFUN was a 250% gain in 10 days. That doesn’t happen too often and both were max green BOP and huge accumulation charts that I went long for quick huge gains. They didn’t last long but I recognized it was beauty over CANSLIM quality and they were very fun. However, the chances of finding them again in this market are nill. We will need another exciting bull market. Don’t fall asleep. It will be a while. Aloha and I will see you in the chat room where quiet weekends turn into wild weeks. Just like I like it!!! ALOHA!!!!!
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Guys please do not watch CNBC or read the Wall Street Journal.
I can not stress this enough. If you do not want to get crazy or go crazy watching the bad news that continues to spew out, do NOT turn on the TV CNBC or open the paper WSJ. I even watch the way they talk to us like their job is to scare us. It really is very dangerous for a professional investor that is worth under $100 billion. If you are a CEO or a business man then CNBC makes sense to watch but if you are trading a $5,000 portfolio or a $5,000,000 portfolio I am telling you CNBC and the WSJ will waste your time. The time you spend watching that noise you could be scanning charts finding the top industry groups that are holding up the best in this market and then find the best CANSLIM quality long for a possible future long.
The most important thing you could do instead of watching CNBC would be to reread “Reminiscences of a Stock Operator” or “How To Make Money In The Stock Market.”
Joshua,
Couldn’t agree with you more. CNBC in particular is just a sensationalist disinformation generator.
Not to beat this dead horse any further, but on the Cramer the Clown show last Thurs. or Fri., the dwarf made a claim in one sentence that he was a) positive on NOV, owning it for the money-burning “action alerts plus” premium account and b) he had been positive on the stock since 2005.
The way he said it implied that he had people in NOV since 2005 for “AA+” for a gain of like 300%.
This is a lie.
This is a damnable, calculated lie.
This is just one in a long list of deceptive, self-promoting statements from this little prick. But it just really hit home at a time when I think he has cost people fortunes.
Okay, that’s enough. Venting doesn’t make money.
Hope you’re feeling better and getting out on the waves.
Thanks for all you do,
jobuck
I went after a few of his longs and proved how I played some up and down like IMA, I talked how he was late to AUY, I talked about how his SGP was a short. I talked about how his C 50% loss was a horrible trade from the start…it got me fired (basically).
The monkey sure has a love affair going on. I saw so many ppl call and say how much they love him yet I can not find more than a few stocks worth recommending. Yet he is telling ppl to buy this and buy that, kinda scary on both ends.
How can people be fascinated by this guy. His fund was lame compared to those who used the CANSLIM system in the 80s and 90s. It is amazing because of his movements about the 1987 crash has made him so famous.
A man that acts like that on tv…and people stillw ant to take his advice.
Pretty soon on my paid site I am going to start using camtasia and going over my past big winners with my voice and current charts with my voice. That way you can hear the analysis and see it with the pointer. Basically I am doing the same thing I am starting to see on a lot of TA websites. I think some of you would greatly benefit by watching me do this. It would be like the Daily Stock Analysis and the Market Wrap videos from IBD.
So we are going to be able to use my voice and power of voice command to prove to you my conviction in certain chart patterns. I will also give paid subscribers special voice psychology lessons that will help you become a better trader.
So we are looking to do some neat things for you guys in the bear market. Plus offer silver to go to gold and then go from gold to platinum if you want to upgrade your subscription package for a low price.
I would like to be the place to go post-Rev Shark. I think if I get one more bull market I will be able to convince the last amount of ppl that still do not believe that I am as good at the market as I am.
My services are very cheap and I want as many ppl as possible to make a TON OF MONEY in our next bull market. There will be 100 charts and 50 max green BOP charts to choose from. The key question is is how much do you want to make in the next great bull market. Try not to lose a lot now, preserve capital, and keep losses small for now, and maybe we can make some money on select few longs and shorts. But come the real moment when the indexes are rallying hard like 25 to 40% are you going to make 40% or are you going to return 300-500%? I know which portion I will be at. I have 99 and 03 as my guide. I hope you are all studying and/or if you are a subscriber are going all over my stie memorzing the past so you are ready for the future.