Will We Get Our Bounce?
June 30, 2008
I am throwing away Friday’s action due to Russell’s rebalance. Although the action on the outside looked appealing it is too hard to tell what kind of influence the rebalance had on the market It seems “too good to be true” scenerio that stocks would bounce soley due to a rebalance in an index. The rebalance had a nasty effect at the end of the day causing stocks to pop and reverse very quickly. We did see indexes finish well off their lows but the quality of support came from an artificial source. Much like what we’ve seen with options expirations and follow through days the rebalance has done the same thing. It has created false demand and clouded many charts. Many market pundits seeing the action on Friday have issued “we will bounce from here” calls. Be very careful, bounces are tough to predict and crude oil is on the move.
Let’s not fool around with Crude Oil, check out the chart here:
Trade Prospector Review
June 29, 2008
Trade Prospector is an advanced trading information tool that comprises both an end of day trading information and trade candidate identification module. It also includes a powerful tool called a realtime charting/analysis system. It is much cheaper can when it comes to performance it always score more than others. Others stock trading software platforms have [...]
Bernanke and Friends Fail to Inspire Stock Gains
June 26, 2008
Stocks were boosted by a fall in oil prices but were less than pleased about the FOMC statement. At the end of the day, stocks simply stalled and fell back to where they were prior to the FOMC release. The only thing positive from yesterday’s trading was we ended the day mostly green. Even the hefty gains see on the NASDAQ came on lower volume. New highs continued to be dominated by better than a 6 to 1 margin by New Lows. VIX and VXN continue to be stubborn and bonds continue to shrug off any fear of inflation. This market will continue to be choppy and a difficult environment to achieve Monster Stock GAINS!
Keeping it short and sweet today. This market is getting very boring without hefty gains. I am looking at two stocks: AVAV and HIRE. I will do write-ups over the weekend and post here. But, both sport hefty growth numbers and their shares are in demand.
Stocks Turn Lower on Increased Volume; FOMC Looms
June 25, 2008
The FOMC started its first day of a two day meeting whereby they will be voting on whether or not to raise/lower/keep steady the FOMC Target Rate. There was much fan fare about a better than expected housing report but the report still displayed prices had dropped to 2004 levels in many areas of the country. Big cap stocks were able to hang onto positive territory until the end of the day. Although buyers stepped in at the close it couldn’t stop the market from ending in red across the board. Volume soared across the board, no need to count distribution days as we are clearly in a market correction or better yet: BEAR MARKET. The action does not look good at the moment, it will take some work to over come what we’ve just witnessed.
An important “internal” that his often referred to NH/NL ratio continues to spell more trouble for the market. Yesterday there were 715 New Lows and only 83 New Highs. We’ll need a favorable NH/NL in order to sustain any type of a decent rally. Yesterday’s ratio of better than 7 to 1 ratio of New Lows to New Highs demonstrates how weak this market is and has been. NH/NL is something to keep an eye on as we move forward with this market.
Financials Continue the Pain, NASDAQ Rolling Over
June 24, 2008
Stocks failed to rebound from Friday’s action as selling pressure was just too great. The NASDAQ lead the major indexes to the downside as big cap technology stocks continue to fall out of favor. There is no question that Small Cap and Mid Cap stocks are the place to be in this market, but more specifically Oil and Gas small cap stocks. With the FOMC meeting looming most traders will be hesitant to put on large trades prior to Wednesday’s rate decision. In addition to Wednesday’s rate decision we have oil inventories, an important reading because refiners should be gearing up for the July 4th holiday. Overall, this market is unhealthy and the area of real strength is small cap Oil and Gas stocks everything else should be left alone.
The NASDAQ took out its most recent attempted rally’s low reseting our attempted rally day count. It comes to no surprise as the Dow and S&P 500 look real weak. Not too mention over 200 stocks on the NASDAQ hit new lows yesterday. An overall weak market and one that should not be overplayed but played with extreme caution. Basically, I believe Cash is King and is the best landing spot for me.
Large Cap Stocks Continue the Charge Lower
June 23, 2008
Quadruple witching Friday added a bit of fury to the market’s fire. Since March, witching Friday has brought on higher volume up days or follow-through days. Heading into Friday many were expecting the market to rise. Stocks had a different idea. More fear about rising crude oil prices, Israel’s dry run (Military exercise; attack on Iran), and more worries about the economy. The higher volume sell off didn’t take out the Nasdaq’s previous attempted rally lows. However, the action on Friday has completely knocked out this rally attempt.
According to IBD the put/call ratio jumped above 1 to 1.25. Showing some significant fear levels, but VXN and VIX continue to lack the levels of real fear. New Lows obliterated New Highs: 495 NL to 69 NH. These are the sort of numbers you would like to see when you are trying to get a new bull market. Our Monster Stocks are solely in oil and gas small cap stocks. Large Cap stocks are lagging and dragging this market down!
ZeroLine Trader Review
June 22, 2008
ZeroLine Trader (ZLT) is the front-end for Interactive Brokers’ Trader Workstation and somewhat useful stock software program. It is very easy to use and it one of the most effective and reliable front end from IB. It can automatically send stop loss and/or profit target orders once your order is executed. Using ZeroLine trader you [...]
Stocks Continue to Slide, Oil and Gas Continue to Party as Inflation Looms
June 19, 2008
Financial stocks continue to weigh heavily on the major indexes as continued fear regarding the health of the economy and the banking system dragged down stocks. Assisting the fear was Light Sweet Crude Oil prices moving higher towards all time highs. Small Cap Oil related stocks surged higher from recent consolidation. Volume swelled double digits across the board a major hint large institutional players were net sellers. Distribution within an attempted rally trying to follow-through is never a great sign to see. Normally, we want to see continued accumulation or light volume pull backs. The day was an overall disappointment for the bulls, bearishness on Wall Street continues and price and volume echo that.
This is a scared market, the VXN and VIX rose over 4.5% on the day. The II survey of newsletter writers showed a “cross” where bears out number bulls (typically a bullish sign). Fear is gripping Wall Street at the moment and its most likely tied to woes in Financials and Light Sweet Crude Oil prices. Getting back to the “cross,” this isn’t an immediate indicator and its time to get long NOW. The uptrend may take a week and sometimes up to a month to form. Our last cross was at the end of March where we say a rally occur right through May. Be patient and let the market sort itself out. Extremes help us capture opportunities to make money in the market, the extreme fear at some point will allow us to grab the next upswing.
Stocks Slide on Continued Banking Fears, Volume Lower
June 18, 2008
Goldman Sachs banking note stating the US banks would need to raise an additional $65billion to offset losses. However, the note comes at a time where the industry as a whole stated $120billion would be needed. The additional funding Goldman had stated would push the total near the $120. The selling had a hard time picking up steam, but price action was negative all day long. We continue our low volume environment where price action has a bias to the downside.
Day #4 of our attempted rally ended without much fanfare. Days 4-7 in an attempted rally where we need to see a follow-through day. Occasionally, you will have a follow-through day occur after day #7 but these tend to be proned to fail and lead to mediocre uptrends. We aren’t in the environment where we’ll see Monster Stock gains but I do believe we can grab notable gains. Oil and Gas continue to be the place to be as oil and natural gas hover around their highs.
Summer Trading Volume Nets Nasdaq Gains
June 17, 2008
Volume was lighter across the board as many on Wall Street are taking vacations. Summer months, June through August tend be on the light side for volume. The Nasdaq showing once again it is the leader of this market. Big cap indexes like the S&P 500 and Dow Jones Industrials continue to lag behind the tech laden index. Price action on the Nasdaq continues to look higher as Tuesday’s trading day will be day #4 of our most recent attempted rally. What this market is showing us, it may be a bit difficult to pull off. However, lots of call buyers in GS for their earnings release which could spark a powerful rally.
As the nations mid-section dries out Corn has put in, for the time being a short term top. Corn is heavily subsidized for its use in ethanol. It has been the catalyst for the dramatic rise in price. Farmers who grow corn sure have powerful Washington lobbyists considering corn has to be broken down into sugar to make ethanol. It makes me wonder why we aren’t using sugar. At any rate here is the chart:
