Monday, December 28, 2009
Sunday, December 20, 2009
The market seems to be in the mood to give investors one more gift before the year is over. One more tradeable rally before all is said and done. We've shuffled sideways for the past 8-9 weeks with very few stocks making progress. But we finally have a tape that typically precedes tradeable rallies. Here is what I see:
- Large cap tech stocks have held up beautifully and consolidated their gains into new bases or bounces off moving averages.
- Small and mid caps are leading again with some new leaders and old leaders back at the helm.
- Overextended small and mid cap leaders have digested their gains and allowed moving averages to catch up.
- Recent breakouts have held…VERY IMPORTANT FACT.
- A lot of tight trading action after some wild weeks.
Other secondary opinionated reasons:
- Fund managers are not about to set off a sell off and ruin their year end bonuses. Why not try and run it and increase them.
- Too much of an expectation for a sell off…Market does like to fool the masses (hate clichés, but they are based on truth).
- Many investors that are flat or underwater for the year would love to jump in on a rally resumption to try and make something of this year.
- I can list many more, but all you need to do is listen to the news.
I don't believe the rally will last very long (2-4 weeks). The leadership has narrowed further from previous tradeable rallies and the base foundation underneath is shaky. My plan of attack is to take the trades as they come along, and use my market tops analysis as a trading guide. As of now it has turned positive for the first time since it's correction call in October.
So The market may finally give investors the climactic part of the rally they have been looking for. Of course it's all a self fulfilling prophecy as those same investors will be the one's driving the stocks up, with no one to sell back to eventually. Good luck, don't fall in love with your stocks(trades), and I wish everyone a HAPPY NEW YEAR!
Tuesday, October 27, 2009
Sunday, October 25, 2009
Tuesday, October 20, 2009
Thursday, October 01, 2009
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Wednesday, September 09, 2009
Friday, August 28, 2009
This list needs several iterations. I just see too much possibility right now.
I say next week is down and possibly right after labor day. Which would be a real good shakeout. But we need to be ready if market has other plans.
Thursday, August 13, 2009
Tuesday, August 04, 2009
Thanks and Happy Investing!
Wednesday, July 08, 2009
Thursday, June 11, 2009
Monday, June 01, 2009
Here's an updated snapshot of the double top on the VIX I sent out about 2 months ago when the market followed through. It is acting well and trending right along the 20dma and consolidating right near a support area. Another breakdown here could lead to a final leg up for this run. It's probably going to be fast and furious and finally lead us to the long awaited correction, right after the final suck in rally.
Tuesday, April 28, 2009
Tuesday, March 10, 2009
Monday, March 09, 2009
Friday, January 09, 2009
Sunday, January 04, 2009
The market is truly designed to destroy MOST.
I don't mean to sound pessimistic, since I've done well in it, but after an exhaustive study the past month of monster stocks and my own past trades using both CANSLIM and Darvas, I found that unless you're truly willing to hold through alot of early fiddling around and nasty volatility in the middle, trying to hold out for those promised 100's of percent gains is EXTREMELY difficult. I've bagged the triple digit winners in the past, but only because I did not try and trade around corrections and be too precise. I bought the initial pivot, allowed for the initial fiddle, and patiently waited out the week to see if the stock closed above or below the 50dma, unless the break was just enormous and near an already long bull market or the stock went climactic, as it scaled the chart (there are other reasons not to wait, but that's for another time).
In 2006 and 2007 even though I was able to bag some impressive winners (none over 100%, even though there were plenty), I found I did not really maximize the gain for the exact reasons I mentioned, I was trying to be too fine. The precision allowed me to get out near a top of an intermediate correction, but made it difficult to get back in because of the increased volatility as a stock scaled the charts. There are times for this type of precision, but that's too difficult to explain without illustration.
The reason for the title, most look at these monsters and just assume in hindsight that the moves were easy because of the way it looks in it's entirety. Most don't bother to measure the corrections a stock undergoes day to day, week to week. In many monsters, intra-week volatility can exceed 20% without violation in some cases of even short term moving averages (10 and 20). This simple oversight and misunderstanding leads MOST to overtrade, enter at the wrong time, and then in frustration of all the exhaustive non-profitable trading, become long term holders just as the stock is topping FOR GOOD (the laws of gravity eventually get them all, even if it takes decades, GM). Of course losing the majority of what they invested over typically the next few weeks and months.
Moral of the story, the only way to succeed is to study, study, and study some more and then execute your rule book. YOU MUST create your own rule book. No book or mentor can create it for you. They can get you started, guide and keep you on the right path, but in the end, you must understand how the different variables change and interact from year to year by learning it (repetition). Even though it's the same, there's enough of a difference to cost you plenty. YOU MUST write it down, your memory won't hold it or process it all when money is on the line. Your emotions will make your decisions. But if you learn to recognize the change, you won't be fooled because you will have a rule to handle the situation. It will take years to get it right, but the path is worth the trip once you do.
Most of you know this already, but thought it would make for a good new year reminder.
Some have asked about mentoring in the past, if you're still interested please let me know. In some cases I do it on a barter system for help in other areas.
Hope everyone had a nice NEW YEAR and all the best wishes going forward.