Very Bullish Intraday Reversal Sends Stocks Well Off Their Lows As Top Stocks Continue To Outperform The Market

October 17, 2007

I am not sure if I will have time to post a long commentary tonight, since I am going on a dinner cruise. Therefore, I want to make sure that I let everyone know that I found today’s market action very bullish and very comforting to my portfolio holdings. The pullbacks in my port were on low volume the past couple of days and almost all of my pullbacks have been right to support. So the fact the market bounced here and bounced on very large volume on the Nasdaq can only be spun in the bullish direction.

However, the bears were on it saying that it was just a lame bounce back to resistance. The problem with that assumption is that many leading stocks like AAPL and RIMM are hitting or very near hitting all-time highs again and the Chinese momentum favorites like SNP PTR SHI ACH CHL LFC CHA and SHI, along with the solar stocks, are showing newfound momentum recently after a bit of consolidation. Seriously, by looking at these Chinese stocks starting to take off in a 90 degree angle it is becoming very obvious to me that the gig has to be up soon. By looking at the FXI on an arithmetic long term daily or weekly, you can clearly see the bubble is now in full effect. But calling for its top is only a game the completely ignorant amateurs do–sure are a lot of them around, all of a sudden, in this market.

I don’t like calling tops and I would much rather be involved in the bubble uptrend (which I am) but we have to definitely be prepared for a top. The way these charts look, there is no way in hell anyone should enter any of these Chinese momentum stocks with them so far extended from the 50 and 200 day moving averages. But if you are long, don’t you dare dump all of your holdings. As far as we know the FXI index could easily touch 300. If this was the Nasdaq of 2000, the FXI will hit 350 before it stops. So you must keep that in mind. Momentum can last a lot longer than you think.

And with that, this uptrend can continue a lot longer than you think. The wall of worry is so damn thick right now and I see that approval rating of Congress and Bush are hitting new lows again. This just helps keep stocks high, as far as history is concerned. The fact that so many economically deficient individuals are out there saying that the economy is either in a recession or they are “for sure” it will be in one in the next six months just tells me that we probably have another six months of gains ahead of us at this pace. The crowd is always wrong and the crowd is really fucking stupid right now. Pardon my very strong French but I can not remember the last time the overall comprehension level of the American people of simple common sense measure were completely absent. People simply have no interest in the truth or reality anymore. It is all about an agenda of socialism. The tolerant are the most intolerant in this country. The fact that so many are bearish right now is just simply mind-boggling to me.

As long as this way of thinking amongst the general public continues, I will continue to ride my very pretty green-filled charts higher and higher. Instead of bitching about oil, how about investing in dry-bulk shipping companies or stocks like UPL? The public can no longer think for themselves. Mommy and daddy syndrome lives on. Luckily, I have learned that thinking for myself and not listening to other people can make you very wealthy. APPY/DRYS/IHS/KHD/ZNH/DECk/VMW/ASTI/OIIM are just a few of the stocks that have helped me do very well the past few months. Trust me, I didn’t find any of those from watching CNBC or CNN or reading the Wall Street Journal or NY Times. Just something to think about, if you haven’t thought about that yet.

Aloha and I will see you in the chat room tomorrow!!

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