Stocks

Premarket Analysis for 8/8 - Upgrades/Downgrades, Gappers, Actionable Calls- Submitted By Optiondragon MyHappyTrading Rocket Testing for new site! How do you test a new kind of rocket engine? Step 1: Bolt it to a trailer in the middle of the Mojave Desert. Step 2: Vroom! In this case, NASA is firing up the 5M15, which runs on compressed liquid methane. The odorless substance has multiple advantages [...]
13 More Stocks Of The Worst Companies In The World aka Incompetence Is Fun!- VRNM, after a nice little 1-day runup on the BP deal, this thing tanked. I said don’t short it—it won’t be the first solid short I miss, I just stick to my rules and shorting contract winners is a no no since in my experience, the stocks usually act differently. I feel no regret whatsoever [...]
The 50 Day Moving Average Proves To Be Strong Resistance; For A Real Bottom To Happen The Public Has To Give Up–We Are No Where- August 7, 2008

I am extremely busy right now and will expand on this later but like I have said many times before: the most successful rallies come when the Follow-Through Day comes with a move well over 3% and takes the prices over the 50 DMA. When you don’t get that on a FTD day you normally only have a bear market rally.

A lot of people are wondering why it is so hard to make money out there. Well folks just taking a look at your charts tells you why. Since January 29, 2008 till today 8/7/2008 (I think I was on a two-day chart when I posted these figures in the longs/shorts analysis–subscribers will see the small variation) the market has moved a WHOLE NEGATIVE .10 PERCENT. I hate to tell people who love to make money this but without a real trend it is OBVIOUSLY impossible to make money in the market.
Another Selloff Hits The Market With Volume Well Below Average But Doing Just As Much Damage As Heavy Volume Would- The stock market indexes all continue to trend below the 50 day moving average with the 200 day moving average trailing right behind it. This is the most bearish possible scenario for the indexes to be in and looking to go long stocks with the indexes setup like this is just asking for trouble. However, the worst possible other factor is finally being relieved. I was not making money in my shorts recently with the market in this negative position but now my shorts are doing well and even the shorts that I lost due to reversals that were unexpected are doing very well.

This just goes back to underline how important it is to have guts. If the stock is breaking down on huge volume, with the indexes in clear downtrends, it makes sense that as long as the stock is within 20% of its old highs as long as the pattern is right then it makes sense to get short. I will be looking to get short as many mining, oil, metal, ag, and other stocks that have been rising since 2001 that are starting to show topping patterns.
Another Big Up Day But The Volume Is Lame, Medical Is Leading, And Innovative Tech Is Being Destroyed- August 6, 2008

Tech and bank stocks continue to receive no love, while the commodity stocks continue to top. The rotation, to me, is clearly going into medical and food stocks. I have listed a ton of stocks to be looking to get long and have gone long enough medical stocks that we have enough candidates to watch for possible buy points.
Nasty Reversal Below The 50 Day Moving Average Telegraphs Just How Weak This Market Is- It is never good to have a solid day that has so many people feeling contempt on higher prices reverse hard and show investors losses. But that is what we got today. Nothing short of the word disappointing can describe today’s price action. The reversal intraday of the good price action was a major disappointment to investors across the board.
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.
Follow Through Day Hits The Indexes On Day 10; Remember, No Bull Market Has Ever Started Without A FTD. But Not All FTD Leads To- July 29, 2008
How I Deal With A Market That Does Not Reward Trend Following- July 30, 2008

I definitely, first off, do NOT watch CNBC. This should be the last thing all of you newer investors should do. A lot of people that watch CNBC tell me that they do not have enough time to read Investors Business Daily and instead find it easier to listen to the raving madness of Cramer. This is baloney. All you need is 20 minutes a day to read ‘the big picture,’ ‘the investors corners,’ and any of the other investors education articles.

If you do this every day, I realize that it will not be fast, but eventually you will learn the right way to make money in the market. The same way the greatest traders ever, which were detailed year by year by John Boik in his fabulous books, traded is the same way you should invest. If the greatest all invested a certain way, shouldn’t you to?
Stocks Look To Be Starting Another Trend Down. Well They Already Have But Now It Looks Like It Could Get Worse; I Hope I Am Wron- July 7, 2008

If this is the case, as you can see, I KNOW there is only one smart thing to do and that is to raise cash. That is what I have recently been doing.
A FLat To Down AND VERY BORING Week Comes To A Close Leaving Us Praying For A Real Trend To Actively Invest- July 13, 2008
DJIA, SP-500, NYSE, and Nasdaq Breakdown On Very Strong Volume; The SP-600 (SmallCap Index) Is Starting To Show Strong Relative- Well there is absolutely nothing else that can describe Friday other than pure utter disappointment. I am telling you right now that the odds of us starting another leg lower has increased by leaps and bounds after Friday’s breakdown. Why? Because something that happened this time last happened in 2000. After an initial breakdown, some stocks recovered and some created very bullish chart patterns. After initially working, they soon all reversed as around August 2000 the stock market then resumed its trend lower. There is nothing that says that we are going to have a bear market like we did in 2000. However, the 10 new shorts that I have for Monday have the EXACT SAME PATTERNS that I saw in August to September of 2000.
“Talk Story” about the Market- I have to admit, those that think it is wise to be either a bull or a bear here are doing themselves a major disservice by not studying the past. This market is clearly a range bound market and taking a bullish or bearish side on the overall market is a terrible thing to do.

The correct stance to have is to be bullish in some sectors. Right now, to me, it is clearly obvious that the money is being made in energy stocks or even a couple select medical stocks. The one place you definitely do not want to be right now if you are looking to make money on the long side are the bank stocks which have 80 stocks hitting new 52-week lows. Besides the carnage in the Banks, Insurance, Leisure, Metals, and Real Estate stocks are seeing anywhere from 20 to 30 new lows daily. Now, if you are a bottom fisher trying to get the exact bottom of these stocks then you have suffered some serious damage.
Friday's Reversal Destroys The Euphoria From Thursday; I Did Not Have A Single Long Give A Full Sell Signal (There Were A Good A- There is no other way to describe Friday as uglier than ugly. When you have 4-losers-to-every-1-winner you can be sure that it was a very ugly day. That ugliness can be blamed on the unemployment jumping to 5.5% from 5.0% which was the biggest gain in 20 years and oil jumping almost $11 and a total of $16 (13% gain) in two days which was also the biggest gain in 25 years when they started keeping records of oil. Economist were expecting the unemployment to only increase to 5.1% so this was a LARGE miss. You can't blame the market for doing what it did today after a miss of that magnitude, along with oil jumping 13% in two days.

However, as I will be doing quite often, as I write this I will try to interject some bullish points to the negative headlines. For instance, it could have been 10-losers-to-every-1-winner. But, actually, that would be bullish as it would show the crowd was extremely bearish and I would be looking to get very long very quickly. Still there is nothing good to say about a day when losers did beat winners by such a strong amount.
Amazing How This Market Changes Like It Does. Now I Have Nice Charts Literally EVERYWHERE!- These charts that are setup in extremely bullish patterns right now, however, will probably be destroyed on Monday. However, just the thought of me thinking this might be the bearishness needed to make this rally attempt work. The bottom line today was that my scans "went off" with a ton of stocks giving long signals. Not only that but there are now so many stocks in my watch list that if this market starts moving, I am 100% sure I am going to have no problem making a lot of money.
HAPPY MEMORIAL DAY WEEKEND!!!!!!!!!!!- Happy Memorial Day Weekend. The new commentary will be fully updated by Tuesday morning.
What A Difference One Week Makes; Leading Stocks Signal That There May Be More Work To Do Before A Real Strong Rally Can Ever Ta- There is no doubt that I am suffering my WORST Multiple Sclerosis attack to date. Since Saturday I have basically been bed ridden and RIGHT OFF THE BAT I want to apologies if any of this is a little hard to follow because I feel like trash. I am not sure if this will effect what I am about to write but do me a favor and do NOT bust my balls if I misplace a word or misspell a word. My life is too short to deal with this.

I had a completely different approach in mind when I first wanted to write this but I figure I will stick with the facts. The facts are as quickly as this market looked like good times could be returning it in fact was possibly throwing us false "all clear" signal. Now while I never fully bought into this rally due to the volume, I still held hope that the rotation that I started to see into technology stocks would continue. Now I am beginning to wonder if that is what is happening or if they are making it appear that this was the case just to shut the door in our face.
Very Bullish Week Ends With Us Set Up For Some Big Gains- It was nice to see oil stop rising to the moon and for stocks to still continue higher as a constant rotation from commodity into higher quality tech stocks does seem to be evolving. In fact, it appears commodity stocks are going to continue higher with those new leaders that are starting to emerge. I can only pray that this trend of prettier charts and higher quality longs continues to show in the market.
Looking For Leading Stocks- One thing that I do not hear a lot about but that is very clear to me is that stocks that are leading ARE REALLY leading. That can be seen especially when it comes to the amount of stocks that are hitting new 52-week highs. About a couple months ago things started to slowly change when new 52-week lows stopped expanding at the pace they were.

After the March lows and a small market rally, the new high list started to slowly build. And now we are at a point where even on down days, the past two weeks, the amount of new highs either match, are breakeven, or barely losing to new lows.

On Friday there were 244 new 52-week highs to 95 new 52-week lows. This was the best reading I have seen yet, since God knows when. I know in the August to October there were a lot of stocks hitting new highs but I am not sure it looked THIS GOOD then.
Bullish Week Ends With Leading Stocks And The SOX Taking The Lead (Part Two)- Randomly continuing where we left off yesterday, besides the put/call showing a little of fear coming back into it even with some indexes higher. One index continues to print what should be considered bearish numbers. That is the VIX. The VIX closed at 16.47 Friday and intraday on Wednesday hit 16.10. That was the lowest reading since October right before the November top.

I know I am very bullish on this market, even without volume, due to all the setups and charts that are already breaking out out there. But don't question if I would turn, if we got like three major distribution days in-a-row. If that was the case and there was no bounce here, then you have plenty of reasons to get bearish and top calling. But as long as we have stocks like EXM DRYS, and even CNQR showing up, I think I will hold off on top calling. For all I know it will take the put/call to hit .40 and the VIX to hit sub-10 before stocks finally top off this current run.
Bullish Week Ends With Leading Stocks And The SOX Taking The Lead; The IBD 100 Finishes Up 4.2% And The SOX Finishes Up 5.8% Thi- There is really only one word to describe Friday's intraday action: bullish. Right off the bat, thanks to a report showing the University of Michigan consumer confidence number fell below 60 to a 28-year low, the Nasdaq fell 1.2% within the first two hours. This selling was pretty nasty but still the report should not have shocked the informed investors who saw the IBD/TIPP poll hit an all-time low last month. I am sure we can expect more of the same come Tuesday when the new data is released. Thankfully, for the bulls, cooler heads prevailed and quickly the consumer confidence news was taken as old news and shaken off.

By the end of the day, it was an impressive turnaround on all the indexes, as everything closed near their HOD. The leading index was the NYSE which scored a .5% gain. The SP 500 also was up today, gaining .1%. On the other end, the Nassy lost .2% and the DJIA lost .1% but both still closed near their HOD. Considering the losses that all the indexes had going after the first two hours there is no other way to call today anything but a victory for the bulls.
Bullish Week Ends With Mixed Trading On The Major Market Indexes; Individual Stocks Are Starting To Look Real Good- It was another overall boring session to end the week but despite the overall boring tone to Friday's session it was still a bullish session underneath as many stocks had solid sessions and many stocks that I was long had a very positive session. Overall, profit taking was quite mild in the AM and the strong mid-day rally into the close shows the bears are still not in control.

This kind of action on a do nothing day is just what I like to see in a market that refuses to do much. If there would have been a lot of blowups and negative action today, then I would have been a lot less enthusiastic about the non-event that Friday was.

By the close, the NYSE was up .6%, the SP 500 was up .3%, and the DJIA was flat. The Nasdaq finished lower but the intraday support and positive action by the close is something that has to be considered positive overall. I mean obviously if this market was real weak they would have sold them into the close.
Another Bullish Day Equals Another Great Day For Our Longs- Today was yet another day where the market did not do much but our longs crushed it. This time it was our recent solar stock purchases. This continues a very bullish pattern of where everything I buy continues to move higher. Once again, tonight there are four new longs and zero full sells. This has been a recurring theme and is a theme of any bullish market. Higher volume or not.
Another Very Quiet Day And Another Very Bullish Day For Our Longs; Fed Meeting Should Produce A One And Done...- It was a very quiet day of trading and until the very last hour appeared to be the lowest volume day the entire year. However, a pickup in action the past hour prevented that from happening. But instead of a rush to buy stocks there was a small little rush to sell. That helped take the indexes off their highs and helped leave them basically flat for the day with most indexes up or down between up .1% and down .2%. The biggest moving index was the SP 600 with a walloping .6% rally.
A Bullish Week Comes To A Close As Leading Stocks Lead The Market Higher; Volume Was Finally Over The 50 Day Volume Average On F- Friday turned out to be one of the best days without a doubt for the stock market in 2008 as the Nassy led the way with a 2.6% gain. Why Friday? Because this rally came not only on heavier volume but came after the indexes have already had a few up days. This is a confirmation of the follow-through day as volume was sharply higher on both indexes by 20%. Not only did the gains come on higher volume but leading stocks took charge once again as many leading stocks continued to setup in what are now nice looking bases--just a week ago they were not nearly as nice (this is why it is important to ALWAYS follow the market). That is what two very strong accumulation days will do when they are within three days. There are also plenty breaking out to new highs on strong volume and the fact that they are in so many broad sectors is bullish.
A Market That Moves On No Volume Should Be Treated With Caution- There is an old adage that goes "never short a dull market." I couldn't agree with that more and want to stress that it does not say "go all-in and long a dull market." No, it says, "never short a dull market." If we have to get down to the core of what that statement says it is clearly telling us that when volume is no where to be found the LAST thing you want to do is go short stock Low Volume Consolidation After The Big April Fools Rally Is So-Far So-Good; CANSLIM Stocks Setup And Breakout But Volume Is Stil- A weak open after a very poor employment report that showed the US lost 80,000 jobs in March with the unemployment rate moving up to 5.1%. It was a pretty lousy number but considering the fact that we had 25% unemployment after the crash of 1929 it isn't "that" horrible. But the media, with a Republican still in White House, of course, made it sound like all hell was breaking was loose.

Maybe that is why the market could not build on the weakness and instead rallied higher the rest of the day off the lows until 2pm when traders unwound some of their longs into the weekend. Overall though, it was very positive action, following a strong rally on April Fool's Day. That now makes it three constructive sessions in-a-row where stocks have held on to the gains.
IG Index Daily Market Update 7/08/08-
IG Index Daily Market Update 7/08/08
Boo Hoo, It’s Been 6 Days Since I Traded, Here’s My Response:- So it’s been exactly SIX trading days since I’ve traded any stock and you gotta multiply that number by about 100 to get to the number of emails and comments on this blog I’ve received from people questioning why I’ve stopped trading. Guys, my ideal plays do not come about every day. I rely on spammers [...]
August 7, 2008 Mid-Day Stock Indexes Review-
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August 5, 2008 Mid-Day Stock Indexes Review-
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August 6, 2008 Mid-Day Stock Indexes Review-
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White Mountains Insurance (WTM) Analyst Day - Introductory Comments- White Mountains Insurance (WTM) held its annual analyst meeting on June 17, and I finally got around to listening to the webcast. The URL is here if you want to listen yourself.

I wrote a post on the Reserve Issue at WTM, and this is a summary of the balance of Ray Barrette's introductory comments.

Introductory Remarks
Stock Market Trends: Is the 3rd time the Charm?- It’s do or die time for all the major indexes. On July 21st, we wrote, “the S&P could find some initial resistance around 1275, the Dow at 11750, the NYSE at 8575 and the NASDAQ runs into headwinds around 2350.” This is the 3rd trip for the indexes to their resistance levels. On Monday we [...]
Stock Market Trends: Microsoft the Dinosaur- Microsoft (MSFT) has officially become a dinosaur. By that we mean a large, mature company whose growth prospects have become limited. Shareholders will gain through dividends and share buybacks, rather than organic growth in earnings and capital gains going forward. This is the natural fate of any successful business, but it is interesting to see [...]
Economic Trends: Jobless Claims Feel Recessionary- Although we are not technically in a recession (that we know of), one indicator that is clearly recessionary is jobless claims. This morning, The Labor Department said that new applications for unemployment benefits rose 7,000 to 455,000. This is a high number and anything above 400,000 is generally perceived to indicate economic weakness. Various economists [...]
Daily Market Wrap for August 6, 2008-
Stocks advance as tech offsets financials.
Daily Market Wrap for August 4, 2008-
Stocks falter despite plunge in crude.
Looking Ahead: FOMC Preview-
The Fed is expected to hold rates steady, so the market will focus on the directive.
The Big Picture: Review of Fundamentals-
Almost all of the key stock market fundamentals have improved over the last 3 weeks.
Same-Store Sales Preview-
The July reports should show the consumer in a spending mode.
Stock Analysis: Procter & Gamble-
The global presence of Procter & Gamble helped lift their profit.
Daily Market Wrap for August 5, 2008-
Market rallies on FOMC, crude decline.
Jeffires & Co Bullish on Goodrich Petroleum (GDP)- I sold the last of Goodrich Petroleum (GDP) yesterday - what timing. I did not even realize earnings were out post close - they were ok (hedging techniques bit them) but this morning an analyst came out and said GDP should be 83% higher. Gee thanks - you could of not told the world that anytime in the past month? :)
Pawn Shops Starting to Hit Wall Street Awareness- It looks like the pawn shop thesis we've been advancing is starting to catch the attention of Wall Street. Always a bull market somewhere...
Bookkeeping: Initiating Position in Buckle (BKE)- Buckle (yle="font-weight: bold;" class="blsp-spelling-error" id="SPELLING_ERROR_0">BKE) is a retailer I've been watching for most of 2008 - along with Aeropostale (ARO) it's been one of the few "youth" retailers to do well during the past year. (Urban Outfitters (URBN) is the other name working in this niche) Today it is down 10% in early trading on 21% same store sales - expectations were apparently higher as the stock is selling off 10%ish. I'm fine with it when most of its peers are reporting negative 7-10% same store sales.
Transocean (RIG) Solid Earnings- The same pattern we've seen in many oil service stocks played out in Transocean (RIG) yesterday. Solid earnings. Falling on deaf ears. Due to the mix of ships (they have a lot of shallow drillers who have much higher competition levels) I prefer some other names in the sector in the here and now, but for the long run RIG is bringing on the most supply of deep sea drillers which is where the real money is.
Bookkeeping: Closing Pride International (PDE) on Earnings Spike- I am closing out ocean driller Pride International (aytoinvest.com/quote/PDE">PDE) to reduce exposure to oil - this is not my favorite name in the space but we specifically owned it hoping for a buyout bid based on evidence [May 2: Restarting Pride International as Takeover Bait] but it has now been 3 months and while there was smoke there is no fire. It might still happen but I want to reduce exposure and raise cash so I'm exiting with a small loss. The stock has a decent 5-6% type of pop this AM on earnings.
Gerdau (GGB) Stellar Earnings- Ah Gerdau (GGB) - they once loved you so [May 16: Brazil is Sexy] ... you used to appear on our top weekly performing stocks almost weekly. It is a shame the rest of the world will be entering a period of anarchy, rioting, famine and a return to lifestyles of the 1960s. Just in case the hedge funds are wrong on that thesis we will keep an eye out on you... this will probably be your last good quarter before the house of cards that is global growth implodes on itself, as America rightfully takes its place as supreme being and overlord.
AutoNation 10-Q- These 10-Q's are a fountain of information. A look at
AutoNation's (AN) today.

NEW AUTO:
Harley Davidson 10-Q- Some interesting items from the 10-Q released by Harley Davidson (HOG).

HDFS (Harley Davidson Financial Services)
Income from securitizations during the first six months of 2008 was lower as compared to 2007 due primarily to the loss on the first quarter 2008 securitization transaction and the absence of a second quarter securitization transaction. This compares to two securitization transactions completed in the first six months of 2007.
Third Avenue Files 13D/A in Bronco Drilling- Marty Whitman and Third Avenue Management (TAM) have filed a 13D/A in Bronco Drilling (BRNC) opposing the Merger with Allis-Chalmers (ALY).

From the letter:

Third Avenue Management LLC (“TAM”), on behalf of its investment advisory clients, currently owns more than 6.1 million common shares of Bronco Drilling Company (“Bronco”), representing approximately 23.28% of Bronco’s outstanding common stock. This letter reiterates the position we conveyed to you in our April 8, 2008, letter (the “April 8 Letter”), that we oppose the proposed acquisition (the “Proposed Merger”) of Bronco by Allis-Chalmers Energy, Inc. (“Allis-Chalmers”), plan to vote our shares against the transaction and urge other shareholders to do the same.
Altria Earnings Call Notes- Catching up on the notables from Altria's (MO) recent earnings call.

- Repurchased 53.5 million shares during the quarter at an average price per share of $21.81. Additionally, Altria declared a quarterly dividend of $0.29 per common share paid to stockholders of records as of June 13, 2008. This equates to approximately $600 million in dividend payments. Combined, the stock buyback and dividends totaled approximately $1.8 billion. This represents over 4% of Altria's June 30th market capitalization.

- John Middleton (cigar) delivered $50 million in operating company's income and grew its total cigar shipment volume by 11% to 355 million units in the second quarter. John Middleton is capitalizing on PM USA's sales and distribution infrastructure and expertise to help grow Black & Mild.
Whole Foods: "Shoppers Will Return When Economy Turns"- "Assuming no dramatic change in economic trends, we are planning for total sales growth in fiscal 2009 of 6% to 10%. We expect comparable store sales growth of 1% to 5% and identical store sales growth of zero to 4%." Whole Foods CEO John Mackey. OK, so, what defines "dramatic" John?

I hate these conditional predictions. Essentially no matter what happens, Mackey is giving himself an "out". How about just telling us either "we have no idea" or give us numbers that investors (I am not one) can rely on. Mackey basically told them nothing...
Don't Discount Fee Income at Fannie Mae-
The recent news that Fannie Mae (FNM) will raise the fees that it charges mortgage originators to assume the liabilities related to their loans will significantly help the company going forward. In raising the fee that it collects for buying and guaranteeing mortgages from .25% to .50% of the loan value, Fannie Mae has successfully expanded its fee generation possibilities. If the company can survive its current predicament, which is still very questionable, the company may just be able to drive earnings – excluding loan loss provisions and other charges – that will allow the company to create an asset and fee structure capable of supporting all of the dilution that has taken place over the last year.
Another Big Up Day But The Volume Is Lame, Medical Is Leading, And Innovative Tech Is Being Destroyed- August 6, 2008

Tech and bank stocks continue to receive no love, while the commodity stocks continue to top. The rotation, to me, is clearly going into medical and food stocks. I have listed a ton of stocks to be looking to get long and have gone long enough medical stocks that we have enough candidates to watch for possible buy points.
Another Selloff Hits The Market With Volume Well Below Average But Doing Just As Much Damage As Heavy Volume Would- The stock market indexes all continue to trend below the 50 day moving average with the 200 day moving average trailing right behind it. This is the most bearish possible scenario for the indexes to be in and looking to go long stocks with the indexes setup like this is just asking for trouble. However, the worst possible other factor is finally being relieved. I was not making money in my shorts recently with the market in this negative position but now my shorts are doing well and even the shorts that I lost due to reversals that were unexpected are doing very well.

This just goes back to underline how important it is to have guts. If the stock is breaking down on huge volume, with the indexes in clear downtrends, it makes sense that as long as the stock is within 20% of its old highs as long as the pattern is right then it makes sense to get short. I will be looking to get short as many mining, oil, metal, ag, and other stocks that have been rising since 2001 that are starting to show topping patterns.
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.
Follow Through Day Hits The Indexes On Day 10; Remember, No Bull Market Has Ever Started Without A FTD. But Not All FTD Leads To- July 29, 2008
How I Deal With A Market That Does Not Reward Trend Following- July 30, 2008

I definitely, first off, do NOT watch CNBC. This should be the last thing all of you newer investors should do. A lot of people that watch CNBC tell me that they do not have enough time to read Investors Business Daily and instead find it easier to listen to the raving madness of Cramer. This is baloney. All you need is 20 minutes a day to read ‘the big picture,’ ‘the investors corners,’ and any of the other investors education articles.

If you do this every day, I realize that it will not be fast, but eventually you will learn the right way to make money in the market. The same way the greatest traders ever, which were detailed year by year by John Boik in his fabulous books, traded is the same way you should invest. If the greatest all invested a certain way, shouldn’t you to?
Nasty Reversal Below The 50 Day Moving Average Telegraphs Just How Weak This Market Is- It is never good to have a solid day that has so many people feeling contempt on higher prices reverse hard and show investors losses. But that is what we got today. Nothing short of the word disappointing can describe today’s price action. The reversal intraday of the good price action was a major disappointment to investors across the board.
Stocks Look To Be Starting Another Trend Down. Well They Already Have But Now It Looks Like It Could Get Worse; I Hope I Am Wron- July 7, 2008

If this is the case, as you can see, I KNOW there is only one smart thing to do and that is to raise cash. That is what I have recently been doing.
A FLat To Down AND VERY BORING Week Comes To A Close Leaving Us Praying For A Real Trend To Actively Invest- July 13, 2008
DJIA, SP-500, NYSE, and Nasdaq Breakdown On Very Strong Volume; The SP-600 (SmallCap Index) Is Starting To Show Strong Relative- Well there is absolutely nothing else that can describe Friday other than pure utter disappointment. I am telling you right now that the odds of us starting another leg lower has increased by leaps and bounds after Friday’s breakdown. Why? Because something that happened this time last happened in 2000. After an initial breakdown, some stocks recovered and some created very bullish chart patterns. After initially working, they soon all reversed as around August 2000 the stock market then resumed its trend lower. There is nothing that says that we are going to have a bear market like we did in 2000. However, the 10 new shorts that I have for Monday have the EXACT SAME PATTERNS that I saw in August to September of 2000.
“Talk Story” about the Market- I have to admit, those that think it is wise to be either a bull or a bear here are doing themselves a major disservice by not studying the past. This market is clearly a range bound market and taking a bullish or bearish side on the overall market is a terrible thing to do.

The correct stance to have is to be bullish in some sectors. Right now, to me, it is clearly obvious that the money is being made in energy stocks or even a couple select medical stocks. The one place you definitely do not want to be right now if you are looking to make money on the long side are the bank stocks which have 80 stocks hitting new 52-week lows. Besides the carnage in the Banks, Insurance, Leisure, Metals, and Real Estate stocks are seeing anywhere from 20 to 30 new lows daily. Now, if you are a bottom fisher trying to get the exact bottom of these stocks then you have suffered some serious damage.
Amazing How This Market Changes Like It Does. Now I Have Nice Charts Literally EVERYWHERE!- These charts that are setup in extremely bullish patterns right now, however, will probably be destroyed on Monday. However, just the thought of me thinking this might be the bearishness needed to make this rally attempt work. The bottom line today was that my scans "went off" with a ton of stocks giving long signals. Not only that but there are now so many stocks in my watch list that if this market starts moving, I am 100% sure I am going to have no problem making a lot of money.
Very Bullish Week Ends With Us Set Up For Some Big Gains- It was nice to see oil stop rising to the moon and for stocks to still continue higher as a constant rotation from commodity into higher quality tech stocks does seem to be evolving. In fact, it appears commodity stocks are going to continue higher with those new leaders that are starting to emerge. I can only pray that this trend of prettier charts and higher quality longs continues to show in the market.
Friday's Reversal Destroys The Euphoria From Thursday; I Did Not Have A Single Long Give A Full Sell Signal (There Were A Good A- There is no other way to describe Friday as uglier than ugly. When you have 4-losers-to-every-1-winner you can be sure that it was a very ugly day. That ugliness can be blamed on the unemployment jumping to 5.5% from 5.0% which was the biggest gain in 20 years and oil jumping almost $11 and a total of $16 (13% gain) in two days which was also the biggest gain in 25 years when they started keeping records of oil. Economist were expecting the unemployment to only increase to 5.1% so this was a LARGE miss. You can't blame the market for doing what it did today after a miss of that magnitude, along with oil jumping 13% in two days.

However, as I will be doing quite often, as I write this I will try to interject some bullish points to the negative headlines. For instance, it could have been 10-losers-to-every-1-winner. But, actually, that would be bullish as it would show the crowd was extremely bearish and I would be looking to get very long very quickly. Still there is nothing good to say about a day when losers did beat winners by such a strong amount.
What A Difference One Week Makes; Leading Stocks Signal That There May Be More Work To Do Before A Real Strong Rally Can Ever Ta- There is no doubt that I am suffering my WORST Multiple Sclerosis attack to date. Since Saturday I have basically been bed ridden and RIGHT OFF THE BAT I want to apologies if any of this is a little hard to follow because I feel like trash. I am not sure if this will effect what I am about to write but do me a favor and do NOT bust my balls if I misplace a word or misspell a word. My life is too short to deal with this.

I had a completely different approach in mind when I first wanted to write this but I figure I will stick with the facts. The facts are as quickly as this market looked like good times could be returning it in fact was possibly throwing us false "all clear" signal. Now while I never fully bought into this rally due to the volume, I still held hope that the rotation that I started to see into technology stocks would continue. Now I am beginning to wonder if that is what is happening or if they are making it appear that this was the case just to shut the door in our face.
Looking For Leading Stocks- One thing that I do not hear a lot about but that is very clear to me is that stocks that are leading ARE REALLY leading. That can be seen especially when it comes to the amount of stocks that are hitting new 52-week highs. About a couple months ago things started to slowly change when new 52-week lows stopped expanding at the pace they were.

After the March lows and a small market rally, the new high list started to slowly build. And now we are at a point where even on down days, the past two weeks, the amount of new highs either match, are breakeven, or barely losing to new lows.

On Friday there were 244 new 52-week highs to 95 new 52-week lows. This was the best reading I have seen yet, since God knows when. I know in the August to October there were a lot of stocks hitting new highs but I am not sure it looked THIS GOOD then.
HAPPY MEMORIAL DAY WEEKEND!!!!!!!!!!!- Happy Memorial Day Weekend. The new commentary will be fully updated by Tuesday morning.
Bullish Week Ends With Leading Stocks And The SOX Taking The Lead (Part Two)- Randomly continuing where we left off yesterday, besides the put/call showing a little of fear coming back into it even with some indexes higher. One index continues to print what should be considered bearish numbers. That is the VIX. The VIX closed at 16.47 Friday and intraday on Wednesday hit 16.10. That was the lowest reading since October right before the November top.

I know I am very bullish on this market, even without volume, due to all the setups and charts that are already breaking out out there. But don't question if I would turn, if we got like three major distribution days in-a-row. If that was the case and there was no bounce here, then you have plenty of reasons to get bearish and top calling. But as long as we have stocks like EXM DRYS, and even CNQR showing up, I think I will hold off on top calling. For all I know it will take the put/call to hit .40 and the VIX to hit sub-10 before stocks finally top off this current run.
Bullish Week Ends With Mixed Trading On The Major Market Indexes; Individual Stocks Are Starting To Look Real Good- It was another overall boring session to end the week but despite the overall boring tone to Friday's session it was still a bullish session underneath as many stocks had solid sessions and many stocks that I was long had a very positive session. Overall, profit taking was quite mild in the AM and the strong mid-day rally into the close shows the bears are still not in control.

This kind of action on a do nothing day is just what I like to see in a market that refuses to do much. If there would have been a lot of blowups and negative action today, then I would have been a lot less enthusiastic about the non-event that Friday was.

By the close, the NYSE was up .6%, the SP 500 was up .3%, and the DJIA was flat. The Nasdaq finished lower but the intraday support and positive action by the close is something that has to be considered positive overall. I mean obviously if this market was real weak they would have sold them into the close.
Another Bullish Day Equals Another Great Day For Our Longs- Today was yet another day where the market did not do much but our longs crushed it. This time it was our recent solar stock purchases. This continues a very bullish pattern of where everything I buy continues to move higher. Once again, tonight there are four new longs and zero full sells. This has been a recurring theme and is a theme of any bullish market. Higher volume or not.
Bullish Week Ends With Leading Stocks And The SOX Taking The Lead; The IBD 100 Finishes Up 4.2% And The SOX Finishes Up 5.8% Thi- There is really only one word to describe Friday's intraday action: bullish. Right off the bat, thanks to a report showing the University of Michigan consumer confidence number fell below 60 to a 28-year low, the Nasdaq fell 1.2% within the first two hours. This selling was pretty nasty but still the report should not have shocked the informed investors who saw the IBD/TIPP poll hit an all-time low last month. I am sure we can expect more of the same come Tuesday when the new data is released. Thankfully, for the bulls, cooler heads prevailed and quickly the consumer confidence news was taken as old news and shaken off.

By the end of the day, it was an impressive turnaround on all the indexes, as everything closed near their HOD. The leading index was the NYSE which scored a .5% gain. The SP 500 also was up today, gaining .1%. On the other end, the Nassy lost .2% and the DJIA lost .1% but both still closed near their HOD. Considering the losses that all the indexes had going after the first two hours there is no other way to call today anything but a victory for the bulls.
A Market That Moves On No Volume Should Be Treated With Caution- There is an old adage that goes "never short a dull market." I couldn't agree with that more and want to stress that it does not say "go all-in and long a dull market." No, it says, "never short a dull market." If we have to get down to the core of what that statement says it is clearly telling us that when volume is no where to be found the LAST thing you want to do is go short stock A Bullish Week Comes To A Close As Leading Stocks Lead The Market Higher; Volume Was Finally Over The 50 Day Volume Average On F- Friday turned out to be one of the best days without a doubt for the stock market in 2008 as the Nassy led the way with a 2.6% gain. Why Friday? Because this rally came not only on heavier volume but came after the indexes have already had a few up days. This is a confirmation of the follow-through day as volume was sharply higher on both indexes by 20%. Not only did the gains come on higher volume but leading stocks took charge once again as many leading stocks continued to setup in what are now nice looking bases--just a week ago they were not nearly as nice (this is why it is important to ALWAYS follow the market). That is what two very strong accumulation days will do when they are within three days. There are also plenty breaking out to new highs on strong volume and the fact that they are in so many broad sectors is bullish.
Another Very Quiet Day And Another Very Bullish Day For Our Longs; Fed Meeting Should Produce A One And Done...- It was a very quiet day of trading and until the very last hour appeared to be the lowest volume day the entire year. However, a pickup in action the past hour prevented that from happening. But instead of a rush to buy stocks there was a small little rush to sell. That helped take the indexes off their highs and helped leave them basically flat for the day with most indexes up or down between up .1% and down .2%. The biggest moving index was the SP 600 with a walloping .6% rally.
Stocks Reverse Hard Selling Off All Session Into The Close, Closing Near The LOD; Lower Volume Eases Selling Pressure But Some L- The morning got off to a good start as the indexes gapped higher and started off strong right out of the gate, with the Nasdaq leading the way higher with a 1% gain. After that, sadly for the bulls, it was nothing but a slightly choppy ride lower with the market selling off the entire way lower with the 1% gain in the Nassy turning into a .9% loss by the EOD. The DJIA closed near the session lows for the second straight session. This was not a bullish session, to say the least.

Despite the losses, there was one bit of good news that can be taken away from this session and that is that volume was lower across the board. In fact, Friday's volume was the lowest turnover of 2008 and shows that institutional investors who make up over 75% of the volume in the stock market were not active at all. Still, you can't get too excited about low volume pullbacks when they come after low volume rallies.
Low Volume Consolidation After The Big April Fools Rally Is So-Far So-Good; CANSLIM Stocks Setup And Breakout But Volume Is Stil- A weak open after a very poor employment report that showed the US lost 80,000 jobs in March with the unemployment rate moving up to 5.1%. It was a pretty lousy number but considering the fact that we had 25% unemployment after the crash of 1929 it isn't "that" horrible. But the media, with a Republican still in White House, of course, made it sound like all hell was breaking was loose.

Maybe that is why the market could not build on the weakness and instead rallied higher the rest of the day off the lows until 2pm when traders unwound some of their longs into the weekend. Overall though, it was very positive action, following a strong rally on April Fool's Day. That now makes it three constructive sessions in-a-row where stocks have held on to the gains.
IG Index Daily Market Update 6/08/08-
IG Index Daily Market Update 6/08/08
IG Index Daily Market Update 5/08/08-
IG Index Daily Market Update 5/08/08
Bookkeeping: Adding to Research in Motion (RIMM)- Haven't added to Resea rch in Motion (RIMM) in ages - the chart says it all. We're moving it up from 0.3% to 1.9% of portfolio in the $126s.
Bookkeeping: Closing Yingli Green Energy (YGE)- I just had a tiny position left in Yingli Green Energy (YGE) so based on the non-reaction to earnings (which I thought were quite tidy) I closed it earlier today. The market simply hates solar right now and is to the point of pricing i n every uncertainty short of extinguishment of the actual sun. (that would be bearish indeed) ;)
Bookkeeping: Starting Big Lots (BIG) - Interested in Walmart (WMT) and Polo Ralph Lauren (RL)- Trying to find a retailer to replace the homebuilder exposure we let go of this morning. The thesis here remains we need exposure to something that works when the "it's time to buy America as the rest of the world implodes" trade is on. Now the funny thing, is in retail most of the stocks doing well, even today, as "rotation" happens are the very low end or higher end - the great mi ddle is still a chasm.
Priceline (PCLN) - Down 17% on Good Earnings?- Priceline (PCLN) surprised me with a very nice earnings report in May [May 8: 2 Earnings Reports of Note: AIG (est.com/quote/AIG">AIG) and Priceline (PCLN)]
Encore Acquisition (EAC) Pulls Itself off the Market- Just revisiting a name we owned in the natural gas play that has earnings out today, Encore Acquisition (EAC). One of the reasons we jumped in was the potential for a buyout offer as the company clearly stated [dmymutualfund.com/2008/06/will-encore-acquisition-eac-be-bought.html">Jun 18: Will Encore Acquisition be Bought Out?]
Bookkeeping: "We're Getting Destroyed" Buys- First time I've been able to look at the market today - it is quite a sad state of affairs for us. Enough is enough - I'm going to finally apply cash to the positions that have been busting us the past 48 hours and in fact 6 weeks.

Fundamentals mean nothing. The charts have broken down across the board, including many that Monday morning we outlined as over the 20 and 50 day moving averages - the "best of the best".
Cramer: Quants and their Machines- For those who have been around a while you know I constantly refer to the "supercomputers at the hedge funds" controlling things or at least being the marginal decid er of prices. As a participant in markets for a while now I have to say some of the things we're seeing the past year or so are beyond compare. In the 2000-2002 bear market, 2002 was the worst year with a constant pounding and abandonment of hope - the market was almost constantly down except for a few major oversold spikes.
Bookkeeping: Closing DR Horton (DHI)- I bought 2 homebuilders in late winter for a specific reason that is not panning out at this time. In the previous 4 bounces post major correction (Aug 07, Nov 07, Jan 08, Mar 08) investors flocked into these stocks since the thesis was the economy "will rebound in 6 months".
China Medical (CMED) Flying Since Being Highlighted- When it rains it pours - I wrote the China Medical (CMED) piece premarket yesterday morning [China Medical - Back

Foster Wheeler (FWLT) - Solid Numbers- Some good news and bad news from Foster Wheeler (FWLT)
r />Good: results were very solid in a very lumpy industry (quarter to quarter), stock is cheap. US growth is slowing (why is that good? I don't know but anything to do with the US is now "good" and the rest of the world is now "bad")
Bookkeeping: Adding Back Fuel Systems Solutions (FSYS) Sold Yesterday- This is quite a sad market. Friday we sold Massey Energy (e/MEE">MEE) post earnings pop in the $81s saying it would probably give up all it's gains. Within 2 sessions it fell to mid $60s. Yesterday morning I sold down a position in Fuel Systems Solutions (FSYS) in the lower to mid $39s on the "Cramer followers" pop.... by the end of the day it was down in the $36 and gave back almost the entire 10% gain. This has simply been the pattern - gains are not sustained. We can't do this over and over over 55 long positions in a mutual fund environment, but we are doing it here and there selectively.
WSJ: Don't Give up on that Fund - Not Yet- This story in today's Wall Street Journal dovetails nicely with the previous blog entry. I always say you are buying the fund manager, not the fund; the fund is simply the wrapper (although in certain fund families there is a deep research team of analysts which can help to some degree). While past performance is "no guarantee of future results", obviously it makes more sense to stick with someone who has demonstrated past success than failure.
China Medical (CMED) - Back on Track; Valuation Should be Higher- After some perceived hiccups the last 2 quarters, which in retrospect proved to be a great buying opportunity as the market overreacted to a 90 day (quarterly) period of time, China Medical (CMED) appears to be back on track judging from yesterday's earnings. The stock has taken some lumps earlier this year, and the last time around a lower gross margin rate and higher tax rates raised some concerns. Some of those concerns seem to have been alleviated with yesterday's numbers.
Whole Foods Wilts in a Sluggish Economy- Whole Foods reported disappointed earnings for the most recent quarter and the stock is bearing the brunt. Is this an example of a falling knife? We don't think so, and thus we think there is value for the long term.
Premarket Analysis for 8/6 - Upgrades/Downgrades, Gappers, Actionable Calls- Submitted By Optiondragon From Briefing.com Periodicals Wrap-Up for Wednesday, August 6th WALL STREET JOURNAL: Increasing commodity prices, tough competition, little international exposure and slowing sales all mean that Tootsie Roll Industries (TR) is a troubled company that may be a takeover target, according to the Wall Street Journal. “I don’t see why Nestle (NSRGY) or Hershey (HSY) or [...]
Does Anyone Really Believe Merrill's Thain?- Why does he insist on going out there and setting himself up? Why?

Lest we forget, some "Thainisms"....:
In January:
* "We're very confident that we have the capital base now that we need to go forward in 2008."

In March / April:
* "Today I can say that we will not need additional funds. These problems are behind us. We will not return to the market."
* "We have more capital than we need, so we can say to the market that we don't need more injections. We can confirm that we have tackled the problem."

Now, after financing the dumping of assets for 22 cents on the dollar, and breaking yet another of the above promises, Thain is at it again.

Watch the "explanation":
ADM Operating Profits Continue To Grow- Once again the MSM coverage skews actual results...This time they do it to Archer Daniels Midland (ADM)

The headlines "ADM Profits Falls" and "Archer Daniels fourth-quarter profit slips by more than half" are as misleading as they come. Why?
Shaprio Spins Like Crazy for Six Flags- Mark Shaprio is e/89041-six-flags-inc-q2-2008-earnings-call-transcript?source=feed&page=1">working overtime "putting some lipstick on the pig" that is Six Flags (SIX).

Ready?

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