Weekend 4/29-30
The thing we need to remember here is that an awful lot of stock is in weak hands. Who among us doesn't have a stock that, "if it just got back up to break even" we'd think about dumping. Well there are a ton of folks with that on their mind. That is the reason I can't see any truly sustainable rally happening for quite a while.
Well, I have no idea what Monday is going to be. A lot of stocks are at resistance or finishing a pennant. It looks like something is in store but I have no idea of direction. With the Nasdaq being still very slight to the oversold, it could continue the move. The NYSE was neutral Friday and couldn't extend anything. Utilities seem to have peaked and ready to fall back again.
If the market doesn't head fake and does starts to rally well on Monday. I wouldn't be surprised to see the market string together several good day. The safe buy will be the second move of the day. Although, the best days we've had of late have all seemed to start weak. So another play would be if the strong stocks start to rally and continue it from the first hour. There I'll try to pick up any of the leaders in Bios or infrastructure. (Like MLNM, I bet...)
The Dollar is unbelievably strong. The dollar index is at an all time high. That can't last forever. Europe must do more to prop up the Euro. They raised the rate last week and Big Al may see the quarter and raise a half on the 16th. The Euros may take out a contract on him.
There's been a lot of talk about inflation forcing the Fed to move big. I just don't see it. The Fed is the responsible party for the weak inflation we see. They poured money into the supply for Y2K. The first of the year had huge amounts of dollars in the float. When that much money is out there you get inflation--period. That also makes money available everywhere--like margin accounts and weak loans. One could make the case that Greenspan is both source and solution to a manufactured problem.
4/29As far as I am concerned, the market is entering into a trading range. The market is still oversold but not by nearly as much. It could make 4000 this wave. Monday brings the new month and new money into the funds. But, I expect some profit taking. That could be followed by a couple of good days as they put the new money to work.
I will not consider the financials until Greenspan get the deal. We have that coming up and the Fed is another reason I see a correction ahead. If it comes off the way I think, we have a few good days next week and then start to correct into the meeting and rally after. Lot of Oijia Board looking to come up with this scenerio. You got a better one? Write me and I'll post it in the e-mail area. The VIX looks headed back up and that says weakening. We reached higher with the oversold but I don't see it moving to the plus side very far this trip. We need some higher lows and highs for a while to mount the ability to sustain the rally. I do think we've found or are close to finding a bottom.
If you have some form of money stream to watch, the strong stocks will be identified by in on the pullback. The good plays for later will diverge from the money stream in a bullish way. One of the stocks I should have bought yesterday--CEGE--is such a stock. MLNM that I sold today is another. (It made me 50% and half of that was today!)
My sales on Friday could easily come back to haunt me. If this were earlier in the year you couldn't have drug me out of those stocks. As it is, I'm hopeful I can buy them back cheaper.
You can make good money in a range bound market. You just have to play it for a shorter time frame and make the plays smaller in size. My ideal portfolio is 8 stocks. I'm willing to own 12-15 over the next few months. And, I'll be looking at 5 day charts more.
On the side of being long (I still am) on Monday, is the Naz Composite. It closed above resistance of the earlier in April recovery failure and that could get those other couple of hundred points that I can hope for. There is more resistance just below 4K and it may stall a bit short.
Fri 4/28
B: DUSA 15 5/8 S:MLNM 77 1/2 EXDS 88 1/2 DUSA 16 3/4 HGSI 75 1/2
The day was a surprise on the size of the ups. I expected the day to be pretty good early. It was better and then held; probably to do window dressing of the end of the month. Monday could be May Fools day. So, I banked a bunch.
Big ramps so I took some profit. Probably wrong but makes for a more restful weekend. Rockets across the board seemed overdone. I made 14G's and change today. Long time since I had a day like that. This time I'll keep some... Back to near 40% cash.
Well, it is 11:06 and things are going very nicely. Just had to buy something. DUSA has been a favorite and is weak on very low volume so, I climbed aboard with a partial vest.
7:36CST The Globex is ramping. The hot areas (I-watch) are technology and services. Interesting day ahead. TNB on the Pullback List has broken out from a cup & handle and looks good for 20%. Same list: BBRC is in the same sector and has 8-week consolidation. Could be a strong breakout. CNC looks to be a pullback from the open buy due to news--they snuck in yesterday and instutional pre-open strength in spades.
The title for yesterday's session could be, The Pullback that didn't happen. "The Numbers" were horrid. The market could have really pulled back on that. I have to think the markets ability to absorb such bad news is saying this might really be "the bottom" or close to it anyway. For my trading it means I'm more willing to carry things into next week. I was seriously considering getting out of stocks that moved well early--thinking the Friday afternoon pullback could be stronger than usual and I could buy them back on Monday morning. Not really sure what I'm looking to do now. My remarks about the pennant/wedge formations yesterday makes me stay nervous--is it good nervous or bad nervous...we'll see...guess is good.
Started to try to download the data at 4:30 CST. Finally got them this morning about 5:30. Vendor was changing servers--I found that out after hours of trying and corresponding with their support people who kept saying 20-min or 30-min. Finally quit at 10:40 PM. Nice people but they screwed up royally.
Thu 4/27
B: GTHR 11
It seems like every stock I look at has a pennant or wedge formation. Even the Indexes have them. And they all look ready to complete. We know that these formations signal a move--typically in the direction of the trend--down for the most part. However, we are so oversold on so many stocks (look at the stochastic) that I think we'll get a nice bounce--if we can survive the ugly Friday syndrome.
Not bad! You could have already bought the low for a profit in a lot of stocks. (10AM) We could rally here. We're still way oversold and it would be that kind of rally. Don't get carried away. Tomorrow is Friday! They have a hard time being up days...but, who knows anymore.
Opening looks deadly. All the Globex are in the hole. Look for bargains!!!
I did a special run of stocks that went up May thru Sept of 1999. Take a look... This is the only reference to the list and I'll probably keep it up for a week or so. Don't know if it is any help but it looks interesting. BIG LIST 1300+ stocks. Save it and browse it off-line. The only way I could load it was using Word. That made it over 600K.
If you are 50% or more cash, I would make a few small buys here. See a good one that's down during the day and take a partial position. It gets it up on the radar screen and, who knows, you may be buying the low. Buying the low isn't really the goal. Getting stocks that have big potential down the road at a price that'll make you money is the goal. That means the gorillas that are down but not out.
Well, we had another one day trend. The heads are saying it is the waiting for numbers problem. Why weren't we waiting for numbers twelve hours earlier? I guess this market can't look 48 hours. Can it look 36, 24, 12, or 1? The voting is still out. The only real question to ask after the close was, "Your bar or mine?"...
At least I went with underweight positions. That's a pretty sad brag but it is the only one I've got.
So what do I think? I think we wait tomorrow until "the numbers"; they come out an hour before the close. Until that happens you go with your gut and that a poor way to trade. The solace is if you bought good stocks. What's a good stock? Right now it seems to be one that gets you whole...
Wed 4/26 (white paper update)
B: EXDS 76 1/2 MAGN 2 1/2
Humm, I should have resisted...and I compounded it by taking in some MAGN that has been flat to down. I have to break myself of these masochistic tenancies.
Just could resist the EXDS that was sitting on major support. Can it hold? Just have to stay tuned, I guess...it moved up...it is falling back...should I ride it here and go against my on short term only call? I hate this market!
Ok, let's try to make some sense of things. We had an O'neil Follow Through Day but on modest volume. We can see at the end of the day just how false that was. Many of the key stocks moved well but again without impressive volume for most. The McClellan Summation index has recovered to around -800. I wonder if it can do the bullish thing on this pass and make it past the 0-line. The New High/Low list went more negative today--not the best sign in a recovery. We have been massively oversold on the Naz--which makes us suspect this is an oversold rally. The McClellan oscillator made a lower low in this bottom and that is bullish. The Vix made it into the 40's and has dropped; but, it didn't make it to last October's levels.
Do we believe here? Can't say with any certainty. The picture is cloudy, very cloudy. My gut says things haven't gotten negative enough to really be the rally that we want; but it also remembers all those rapid recoveries the market has given.
So, the medium term is out. Keep more cash than normal. Play the short term. I think we are trading range bound until October. With the decline the range could be a slight upward channel. All the things I 'like' are stretches. You don't want to go overboard on stretches. I am going to reduce my standard amount for investments. I don't like to do that under favorable conditions. I try to only own 8-10 stocks. I'm happy with fewer in a strong market. But, that makes money management hard in this kind of market.
Tue 4/25
I would have really liked to see this move happen on substantially greater volume! I guess I am looking a gift horse in the mouth--but, it has halatosis when I did. The market needs to move well beyond last week's aborted move or we will be looking at a 'M-Top' and there is nothing bullish about one of those. If it can move and hold above 4000, I'll think more about real recovery getting closer.
However! it was an O'neil Follow-through day. (see FAQ just under the Bear Market heading) But, that volume is still a worry. Show me the volume and an up day tomorrow and I might climb back on board.
We want to be ready with some cash raised. When we see that the bear market is really over, the top names can ramp at a massive pace with congestions lasting for a few days at a time and then ramping again.
As an intermediate-term trader, we'll want to own the issues showing the best tape action at that point.
The blue chip N100 stocks don't lure me at the moment. Other stocks have corrected far more. Valuations on the gorillas are still high--maybe too high! I expect they will correct soon.
Globex Futures are strong so the scenerio where yesterday made the double bottom seems quite promising. If this is right then we could see a very nice pop for the week. But, the market need more consolidation so avoid thinking too far into the future. I'd also wait to see if the early pop is a headfake. The time to buy today might be around 3. Still strong an hour or so in might also work.
There are positive divergences galore that call out major rally. Yet, there is one missing ingredient and that is sentiment. When rallies are called like this they typically are going to fail fairly rapidly.
I am tempted to put the CEGE back in play. (I should have! It had a great move.) It held up pretty well in yesterday's bloodletting. But, it is an impossible market. Even with today's brighter outlook, it will be hard to make money. These whipsaws allow only the most nimble or persistant to make a little money.
Mon 4/24
S: CEGE
I am looking at adding to LSI here. It may have made a stable bottom for this move.
I am looking at ELN as a drug possibility with higher than average growth potential. It is close to it's 50 day here and may reach it again where it has rebounded twice. Great drug channel and good P/E--34 and up 37% on a 1 year basis. Might be a bit early and would rather consider this on the breakout or after strong up volume day.
Note that my selected highs list is a lot fatter this eve...
Well, it was nasty! We got the late recovery but it didn't kick in as early as I would have liked. We may have (not quite though) made the second bottom I was looking for but can't say with any certainty. Have to say tomorrow mornings activity will be the tell for the Nasdaq. If we get a morning pop we may have seen a short term low in the Nasdaq. This would still be seen a short term and I can't see it be a major recovery but hopefully nicer than the last weak try. We'll need more consolidation to get thing to really move--and that may really be the fall...
Well, it is looking nasty in the preopen. MSFT has clouded the waters further. My thought is we will rally from the open but that view isn't strong enough to support with money. The best that could be happening to the Nasdaq short-term is to fall back to the support and then rally. That could give us a decent pop. And, I am still waiting to sell into a pop. I am not a happy long.
They are touting financials on the TV. Can't see it beyond the short term. The Fed is the predator that can take down financials like a lion after a gnu.
Fri 4/21
Well, my ideas for the week sucked. Thursday ended the week without noticeable expiration activity. The day to probably exit would have been Wednesday. That said, I made a couple of hundred bucks by sticking around through Friday. Now all that has to happen is for Monday to be a good day.
I also failed to trade the day. And there was money to be made there. Seems like sell the open works almost every day. If you are nimble and can sell within the first five to ten minutes on the opening pop, you can buy back later with a very nice profit. The swing between my high/low for the day ran almost 8%. If you could capture just half.... One thing is for sure, there is no real way to do it as a Waterhouse customer.
Thu 4/20/00
It is still a lousy market. Can't expect it to change much. Still planning to be out by Friday P.M. This is an oversold rally and they are unlikely to be little more than dead cat bounces. Don't want to be silly but do want to profit where I can. We could have a W-bottom coming up that gives us a better bounce but even it is unlikely to do more than a pop. We need congestion and we are going into a period that is great at them. So I figure we get the standard/real fall rally and trading ranges and congestion between now and then. That isn't what I like to trade...duhh. Have to try to take what's available.
So, selling the short term positions off on the bounce. I think we've seen 2/3rd of this recovery. Reminding myself not to be greedy. Nothing wrong with missing the very top. Holding the weak sisters that have been building bases or I don't want out of at the current level--old, intermediate-term position trades.
Wed 4/19/00
Is this a bear market? My view is yes and that it isn't over. One of the facts about a bear market is that it is quick. That is in both the up and down moves. So, take profits when they are there! Don't look for the last dollar on the table. Take the money and run. Tomorrow is another day. Note the declining volume for the two days following the selloff--that ain't very bullish.
My trading yesterday was atypical but made me money. I hope I can emulate it for a while. Use stops; even if that isn't your normal style. Profits can evaporate in a moment.
Wm O'Neil is a chartist extordinaire. He has a mechanism for calling market bottoms. It is called A Followthru Day and today could be one. What's required is a 1% gain that happens three or more days after a bottom on higher volume. If we can take out the volume on the big down day and rally strongly, it could be a true bottom. Don't think so but... (The last two days only qualified in one of the three criteria--gain.)
For those who like Fibonacci numbers. The move back up on the 4475-3227 numbers are: 38%=3701.25 50=3998.25 61.8=3998.25 78.6=4185.50
HON is on a nice cup and handle. Keep an eye on a breakout. Should be a good sector for spring weaknesses. SKO is on a double bottom and could be bought on a rally. Could get damaged by the interest rate / inflation terrors. But, it should do a couple of bucks short term. PALM may have found a bottom; I'd like it better on the pullback from a first try. CBST was strong coming off a V-bottom. HHGP rallied nicely on normal volume and a double bottom. ADRX show a rebound off its 50 day. These are more decent long plays than I'm used to!
I ran through the first third or so of the N100. The thing that stands out is the lack of really strong volume on any stock I looked at. There are some nice plays. A lot of them are V-bottom ones that tend to run out of gas. Some of the W-bottoms have a lot of overhead resistance. A lot seem very good as short term plays. I only saw a couple that look like they could make it to intermediate term plays. Playing but still plan to raise cash again going into the weekend.
Tue 4/18/00
B: CEGE HHGP MLNM S: HHGP MLNM B: HHGP MLNM GENE
It is mid-afternoon; one hour to go. It looks like knife catching is over for a while. I'll be looking to be fully invested tomorrow and back to lots of cash for the weekend. I am expecting this expiration to run some of the top stocks up and carry the intermediate level stuff with it. Could be wrong but I'm betting I'm not...
Can't forget it is expirations week! The monied folks will be playing their games. If it is up too much from normal, sell it! If it is weak where it shouldn't be then hold. If I am wrong in this I not any more wrong than the market has been.
I don't like the CSCO's here. Might be dumb but money flow is negative. I'm not saying sell it this morning. Just don't buy here and take a profit as they play expirations runup.
These biotechs have to rally here soon. They all have stacked a number of red volume bars together. Some haven't had an up day in over two weeks. I almost bought some yesterday. They are a short term play though. You take the deadcat and look for the W-bottom from the pullback for the intermediate term play. I like MAGN at 2 to 2 1/4. It could be a quick double off that price--but don't get greedy on quantity at these prices.
The Intel upgrade will help the CSCO etal group. I'd sell into the strength sometime this week. As far as Intel goes, I'd sell into the upgrade pop and do it fairly early. I'd like out on the quick pop. They report tonight and I don't see any ramping from that--regardless.
Mon 4/17/00
Well, I blinked. My paper trades killed today. I didn't have the guts to put my money where my mouth is. Best paper trade was GTHM @ 9; closed at 11 7/8. Darn, darn, darn...
Damn again. The market is a yo-yo. Back to staying on the sidelines until the afternoon. Tempting to play early. If I do it will be around an hour in on a pullback.
Damn. The preopen has gone from negative to positive. Could swing again. Could be a head fake. Staying with plan to invest late in the day or not at all.
The market's down and it is tax day. How auspicious! I still think we may have an afternoon rally. Emphasis on the may... Things are just too negative. The weekend and morning brought out all the doom and gloom talking heads. If this ain't the bottom it is getting close.
Today could see, hopefully, the last of the margin clerks maham. That means that between 2 and 3:30 we could see selling at any price. The clerks sell, period. Market makers aren't dumb and do nothing (except buy) to support the rapid decline. That's should be a very buyable period--maybe the only one-- today.
I am hurting on every position. I imagine your pretty close to the same. Hold! We're past the time to sell--at least sell a lot. You can dump weak sisters or free a bit of cash; but, if you like a stock and its a strong company, ride it.
I like the drugs for the tell on a come back. They are the most damaged and I don't think we'll see the margin selling in those. It should have pretty much been done already. So watch that area and if you see strength you are likely to be seeing the broader bottom.
e-Mail me your bottom estimates (why be nice but...) for the various Indexes and I'll post them in the e-mail area. The winner will receive--drum roll--the gratitude and envy of the rest of us.
Weekender 4/15/00
Fibonacci...mathematician...magic numbers... Well the COMPX ran from 1300+ to 5000+. So what does it say? 38%=3645; 50=3202; 61.8=2767; 78.6=2147 We are at the 50%; it is also around the 50 week--deadly. The next stop would be around the 200 week and that is under the 78.6. We've blown away the daily averages and have to think weekly averages.
One principle of technical analysis is the 200-day moving average. Stocks that trade far from this average are vulnerable to the downside but also represent an attractive upside movement when in a strong market. We are in a weak market...duhh...and so have a great vulnerability to that downside risk. The problem today is balancing that downside risk and where we can reenter to the long side. Nobody has the answer. But the Nasdaq is way oversold. That doesn't mean it can't go more oversold. But, we at least should see a dead cat bounce here...
Yet we want to reenter these stocks at an opportune time. I am talking about reentering. Yet, there isn't anything wrong with waiting. The choice is how aggressive you want to be; not finding the perfect reentry point. If you aren't fully comfortable with the market--who is--then stay on the sideline! Below I say I am going long. But that is under "good" circumstances and it won't be at the start of the day. If I buy it will be near the close on Monday--not anywhere near the open. So take the morning off and catch up on other things.
Well, bought the HGSI at 65 and it proceeded to tank further. I had other orders in but canceled on the horrid continuing action. All the talking heads are talking about more down moves on Monday. So many stocks are at or near final support. That makes me think that Monday is the day to reinvest later in the day the better. Although, it could be staging some recovery by then. Have the feeling that there will be a dead cat bounce of strong proportion. To be optimal the fall back from that should not retrace fully. Won't be surprised if it does but would say bullish plus if it can start an up trend line—however brief it is.
I was around in `87 and the action seemed as deadly. The second day was worse than the first. However, that came off of a much weaker decline before the event--it was only about two weeks worth and smaller in scope. People who bought that decline got rich and the return for many stocks was fairly rapid. If you don't buy them now you may not be able to buy the best ones in fairly short order; but, it took almost 2-years for the broad market to make it back. Buy strong stocks! They will lead. Everyone talks about many not making it back and they are right.
I am looking at NOK $40 NT $33 JDSU $75 CEGE 12.50 YHOO 105. I am not saying they will get there; but, they may! And, I will be there if/when they do. These will be half vests though. I'll buy on Monday and hope I'm not nauseous on Friday.
Take a look at the charts area. Fri 4/14/00
Well, so much for head-fakes... The CPI killed all thoughts of opening up. Market seems very buyable on this open for a day trade.
The market has been making a long series of head-fakes. The market opens to a rosy look. The futures were up and stocks pop. The market then declines to the close. This is referred to by traders as: “Fading the Market” and can be deadly. Don't be quick to enter until you can hopefully identify that isn't the appearance. The closer to the close you buy, the better your advantage. Remember, today is Friday and there has been a late sell off on most Fridays of late.
Well, didn't look too bad up until that last half hour, yesterday. Could have lived nicely without it. Should have day traded when I thought I should. Hate to day trade! I put a chart of the VIX up in the pullback chart area. Need to rename that one. Last couple had nothing to do with pullbacks. I'll try to get it right today.
I've been trying to formulate a reentry point. You can't game bottoms. I think Biotechs are still a story and I want back in that area. They have, obviously, been decimated—cost me a bunch too. So I want back in and have tried to figure what level means the lowest possible risk. We may or may not make it there; we may or may not hold there. But, I'm willing to release the cash at those levels. Examples are: CEGE 14.50; HHGP 8.25; GENE 12.50
CEGE has great items in phase II and lots of assets including another biotech. GENE is another high potential play. HHGP is a mix—being a investment banker with interest in the net and bios and other interesting startups. If I can hit two out of the three, I’ll do very well. Pick the ones you like and compute the strong support level beneath the current price. If you don’t buy them, at least game them in a trial portfolio
The strength of LSI has made me bullish on ADRX—go figure… (Nice to have profits show up in the green again.) Both are now 1.5 weight positions. In at 58. Average cost: 60. Avg cost on LSI is 63 5/8. MAGN was bought at 3 ½.
My feeling at the moment is that if you don’t already own it you shouldn’t buy in today. It looks like recovery but we’re close to the weekend and we’ll surely see the Friday late selloff. So trade for the day but don’t trade longer term.
The new high list was 119 and my high list shows 26. The difference is mostly low volume fixed rate instruments. The only thing that is bullish is the “quality” play—no thanks. Just too many of the stocks that have been running of late are at or near resistance.
Futures are up. (ND-M are +79 as I write) LSI looks broken and really needs to open up. ADRX is a bit bullish having had an inside day. I am still doing lousy picks. Came close to playing off the new high list of the day before instead of pullbacks. That would have worked. HD…etc. Was going to buy a bank but it had jumped too much early. Others on the new high list were too vertical.
Why am I buying? Well, with all this crashing there has to be a recovery. It may not be the “real” one but it should be substantial. I can be on the sidelines or playing. So, I am playing and losing. But, there’s still a bunch of cash on the sidelines—55%.
Couldn’t stay out. Bought these on weakness. LSI became a double vest on added weakness.
Well, I went looking through the sectors. Banks are a maybe on a few. Cyclical areas are a yawn. Oils are a forget it. I look for good trending potential and just about everything traditional owns a bunch of overhead resistance not that far above the run. I see a nice play on the 5 month and move out to a several year weekly. The good ones all seemed to be just under old resistance. There are short term trades available but I can’t find the ones that look like they can really trend.
Yesterday, I bought CSCO and got stopped out at break even. Should have taken the 2.5 and run. I hate to just day trade. That may be what I end up doing though.
Don’t know if it is wise but I’m looking at SEG here. Also AHP. The best momentum stocks seems to be ADRX—a mix of traditional and cutting-edge drugs. CPQ has a huge pennant and could be a nice earnings play—but, a bit too dangerous and ambiguous for me right now. For an earnings/bounce-back play, I’d like KLIC better if it wasn’t for that true head & shoulder top. I’m seeing weak picks for the most part and that doesn’t say take a lot out of cash! I will probably pick up some ADRX though
Got stopped out of CSCO at the break-even point. CSCO had one of the few, remaining, good charts going for it. I’m now 92% cash.
Transferred about half my account from Waterhouse to Datek. Looking good. Made the CSCO buy there and it was a whole lot slicker, faster than old TDW! And, I saw my new actual cash balance when the trade executed. I can put away my little price computer except when trading at TD Waterhouse. Have the feeling more of the account heads to Datek…
Had to pick up some CSCO when it fell to 69. One larger position left: HHGP; the others are fractional vests I can live with.
May you live in interesting times. —Chinese Curse
If you have to buy something—I don’t—maybe the autos is a possibility. Momentum plays and cup and handles available; no waiting. Have to think it is very temporary. Autos and higher rates are good buddies.
If we get any pop at the open, I’m gone. I figure it is more likely down followed by a weak rally where I’ll sell. I have limit sells in that won’t hit—but I can quickly change them to market orders in a speedier manner. With my exposure, I am not desperate but I’d rather be 100% cash. There will be opportunities galore in a month or so when all this starts to sort out. The idea is to preserve capital.
Where you really like an idea (stock) and it’s a loser that you’ve held up to this point, then it has just become a long-term holding. (I just described 3/5th of my portfolio.) I will think about averaging down (dangerous!) on those that still seem a great story in a damaged sector—but that’s probably weeks off. At that time, some of the stocks in the core holdings list are likely be every bit as attractive and better places for that money!
Today I want to look at weekly charts for the stocks that have been my favorites. Where is solid support at lower levels? I’ll make a list and see which ones hit those targets. I’ll buy those points. I’ll be looking at really lower support points. Some should make it! e.g. GENE @ 9.25
You can play the rotation. Drugs are fairly immune to the fed tightening and it is the traditional stock for conservative positioning.
TV talking head just said MSFT. NOT! MSFT should merge with MO and then they can put tobacco and OS together and just give it to the American Bar Association—that cuts out the middle man…
Well, it sure didn’t hold did it? Time to put it all on the sideline here! For those who can’t avoid being invested the pullback list has some possibilities. BUD is one. TEVA is another. PFE looks like it still has legs. But…
Another half hour and it is holding by the skin of its teeth. I don’t like all this weak volume. You know we haven’t really had volume sell-offs? I guess we can try to make that a plus but I’m starting to get dubious. I’m starting to feel that we need that sale. The market just seems too complacent for it’s own good. That puts the risk reward here at a really bad ratio. Sell into any recovery!!! I don’t care if that ends up the wrong advise; if it is right, it will save you a ton—and that is the important part!
It is a bit after 2PM and stocks are down but holding close to support levels. If we drop more here, I will be even less optimistic. I think the Bios will continue to retrace. Stupid buy the other day on my part. But, I’ll be tempted again on a double bottom formation. First recovery there should hopefully take out this mini-recovery. Although, real recovery is a long ways off, IMO.
Looks like the BioTechs will retrace to their lows sometime this week. If they can hold at those lows, I feel we get a decent rally off the W-bottoms that would form. Don’t really see good intermediate term plays in the areas I watch so am sticking to lots of cash.
The only index that shows any real upside potential is the Dow. S&P is “ok” I guess. The others look sad. The volume isn’t there for any of them to look like they can sustain anything to the upside.
However… The better moves up have been off of weak starts of late. So, we just may see some rally. I’m happy with my exposure thought and am not going to game such a weak idea.
The DJIA gained almost 190 points over the week, or 1.7%, while the NASDAQ Composite closed the week down 126 points, or 2.9%. Next week, we start to get the first glimpse at earnings, which obviously, could send the market either way.
I’m still ambiguous about going stronger. One thing is certain, this is a stock pickers market. I’ve been reviewing charts and looking at the long term pictures on a number of stocks. Outside the techs, a lot of stocks appear intact. But, you look at the short term chart and they are ambiguous. I am not seeing stocks that excite me. I’m in the process of transferring half of my account to another broker. I am doing that with cash and don’t have a huge amount of free cash to buy more at Waterhouse, anyway. That may cloud my outlook.
I’ve added an e-mail section that shows messages about the site. So far have just a single poster. Let me know what you think of the site. Yeah, you can laugh at my ramblings too…
Long Potential: ZOOX TUTS QCOM KING (nothing amazing) RFMD (earnings coming)
I made several additions to the site. See if you can find them on the home page.
It is afternoon and things are decline as I thought they might. If this continues I may open some more positions near the close with the thought that we could see an up Monday. (Didn’t add/open anything.)
Well the numbers are out and they’re benign. Looking for a good day. JDSU is up 2 and change in the pre-market. That may keep me out for now. BTW, have you noticed that the really good days have had weak to down pre-markets? Some of the best have been where we had early sell-offs. To many hot opening the last 6-weeks were the days high for many stocks. Really louses up entry points. Yesterday’s buys are an example
The BBH is bumping against a resistance level. That makes me think we see a flat to down day today in Biotechs. Next week it has to take out the resistance. If not, I’ll fold my tent for a while and look for it to fall back to support levels—such as the are.
Writing before the employment numbers. So, we’ll see if that was viable. Expect the day to end down. Don’t think the trader’s are going to want to carry inventory into next week after this volatility. Traders are cowards—at least the living ones…
Really tempted to buy some JDSU this morning. May go with a half position. With the iffyness of the market it could pullback to that upper 90’s support. Just too good a stock to not take advantage of in this pullback. Looking back at 1999, this stock didn’t falter over the spring-summer period. That’s appealing going toward that period. You look back at a stock like this and kick yourself around the chair. If one of you is sitting on this stock at 4-bucks, DON’T TELL ME ABOUT IT… J
I will probably go into Monday with my current holdings. But, I feel iffy about owning stocks through today. I don’t see this mini-rally ending quite yet and I’d like to take advantage.
Look at that congestion in the 4351/4507 block. I can’t see this rally moving a whole lot above that area on this try. So, I’m staying with a lot of cash here and expecting another opportunity. That may not come for a while. Not anxious or worried about not maximizing profits. Still thinking preservation of capital. The blue line is the money flow…it sucks…
If it takes out the resistance, I’ll jump on it.
Took a position (small) at about noon. Should have waited. Both buys are losers. Glad they were very modest vests.
I ended up with a nice hop. 4% That got me back to about even for the week. I will either sell a good portion on Friday or set tight stops going into Monday. That is assuming two good days making the week an up one. I am using DUSA as my tell today for the Biotech stocks going out. It started back up early and already began a correction. If it can halt that, I’ll be less likely to wholesale dump them on Friday. Just about any I am holding could be short term plays today. All are down bunches and showing signs of doing the dead cat bounce. They’ll need to retest to build some base before they can ramp again.
GILD is a bio that I haven’t owned but does have an interesting chart. It is on a little W bottom. Close to a trend line it has yet to violate and close to it’s 200 day. It is the safest looking bio chart I’ve looked at of late. It is an easy entry here with an easy to define stop loss setting. It’s a 10:30 AM pullback from opening up candidate.
With the Tuesday sell-off I am now 75% cash. I am not overly excited about buying anything.
Want to look at YHOO next week. Silly stock always beats estimates and then sells off for a while. It should be a safe net-tech stock to own going out.
http://www.tscn.com/wsc/GR-R-YHOO-524120-0-1-0-5-595-290-3CC2AA2B2A7B04C94F59DFC59400D4A51177CCAE.gif
You can see on this chart there was a great buying opportunity on Tuesday. Keep an eye pealed for one today. The negative response to good earning may make it possible. This is a “Buy them when you can; not when you have to.” kind of play.
Added a chart in the review area. Not a buy here; just an exercise.
Well the market has been open and hour now and just gone positive. I think we may have put in a bottom but don’t believe it is the recovery. It is a bounce back at this point and trades should be short-term goals still.
The N100 futures are down 77 as I write this. Doesn’t bode well for the open. Yet, I don’t see a huge amount of damage left and my sale of the leveraged shorts last night will still be active today. This kind of decline has to stabilize around the 50-day here and try to rebound or we are in really deep doo-doo. We almost ran to the 200-day yesterday. We may today.
Lets try to find the good here. The decline gave us the heaviest volume ever; yet, we closed in the upper ¼ of this huge range. The VIX is outrageously high at 32 and change. The volatility said selling climax.
On the negative side: The great stocks like CSCO got clobbered and without blowout volume. People are still holding into this decline. The market can still be moved on weak volume and that doesn’t seem like a real bottom. People need to get a lot more negative.
Confession time. I always have trouble trading the first quarter of the year. I thought I was doing better this year but made several telling mistakes that really damaged the gains. I gamed the Biotech move as pullback that would resume like the nets had in the past. It was a volatile sector but it had so much going for it. I was dead wrong and left a lot of money on the table. I’m still ahead for the year but nothing like earlier. My trading has really sucked of late.
I think we see some recovery in the next few days. I don’t think it is going to sustain it for long. And, I think we’ll see another pullback that will test the current Nasdaq lows. I think the Dow will outperform short term but pullback too. If the Nasdaq holds that level and puts in a W bottom, I think it will begin a trading range. We need a lot of consolidating to get over the damage. If we see another BioTech-like move it won’t happen until fall sometime.
Welcome to the first crash of the new millennium. If you haven’t sold yet, I’d hold—and it will still hurt. Keep telling yourself, “It isn’t a loser until I sell.” which is a lie that we can feel good with. And, don’t expect a quick recovery. Stocks are so damaged they won’t really recover without a long consolidation. Take advantage of any dead cat bounce we may see. The name of the game is preservation of capital. I am not saying buying isn’t possible here; I am saying it takes major guts.
The scary thing here is how few stocks have had climax selling volume . There could be worse times ahead. The option clerks will run rip shod again. I’ve started writing this about 1 P.M. on “the day before” and am waiting to see them kick in—although they may be starting early today. The DOW isn’t quite as bad off but it wasn’t all that healthy to begin with.
The day ended on a huge up note; but I’ll leave these less than right comments here to show just how quickly things change. I could be a bull (demi-bull—short term bull) again in short order. Go figure. I look a bit like Fido’s backside here…
A lot of people traded for a lot of gains in 1999. Those tax bills are coming due and many have little left to pay the piper or Uncle. That could make things a whole lot worse! Do you realize how many people are thinking, “If it goes up and makes me whole I’ll sell”? This market has overhang that says we could see general doldrums into fall. You will need to be a better chartist to eke out small gains (it is all relative) between now and then.
Don’t get rammy to go longer until your see climax selling. Watch those volume bars! This crash may end with a whimper but I doubt it. While the overall market seems to have climaxed today, individual stocks don’t seem as confirming.
I really am having a hard time getting excited by anything on the pullback list. If we’ve reached a bottom—big if—I’d want to look more for sector leaders that pulled back less than the rest of the sector. If you don’t subscribe to historic data that includes sector review, you need to visit a site that can give you that. Starting picking a few you like for intermediate recovery plays when the bottom gets confirmed.
Entered after close. Hoping the worst is over for now
Charting Tip:
You may think you are seeing head & shoulder tops that indicate the worst is yet to come. To have a true head and shoulder top you need descending volume across the pattern. Very few will have that. Don’t let them fake you out. Throw an average on your charting tool, if you can.
Biggest one-day loss in Nasdaq history. My USPIX kept my other losses “reasonable.” You keep thinking it can’t get any worse and then...
Too many stocks have been maimed. Not just certain sectors or stocks. Even the great stocks that are down are going to need to consolidate at the lower levels. That’s what I meant about not investing until the fall—those were my normal intermediate term plays. I may be wrong but I’m letting things settle out here. I’m sticking with the current cash for a bit. I just can’t think banks with Greenspan on the loose. PFE and the like just can’t get my juices up. There should be a dead cat on my stuff that I’ll probably sell into. Several of the plays are recovery ones anyway. So, I’ll regroup and then get active again.
Weekend 4/2/00
Don’t know about your blood but mine is lying in the street. I should have done a better job of protecting capital. Too many quick bounce backs from previous pullbacks clouded my mind. I am 50% cash today but should have been several weeks ago.
On the good side, Friday had a nice recovery late. Can it follow through on Monday? You got me. We had a weirder than normal week due to end-of-quarter machinations by the fund managers. So, the close is a bit suspect and I want to see solid confirmation before putting that money back to work.
Banks seem prominent on the pullback list and that doesn’t make jumping back into techs or bios seem prudent yet.
I will not put money back to work until I see what looks like a recovery. And that may not happen until fall! I’ll try to make two to three day trades on movers but my intermediate term (real) trading is on hold. The stocks I do hold for the intermediate term will be sold into any bounce. That includes stocks I consider core holdings.
The current stocks I hold are CEGE GTHR HGSI HHGP MAGN USBC. Some are core. Others are comeback plays. Only HHGP (core) is a full position. The term friend Myst likes to use is “nibbling”…