It’s About Time!; Stocks Breakdown From The Triangle Consolidation (NYSE Reverses Its Breakout), On Much Heavier Volume
February 29, 2008
Well, I guess, all I can say is, so much for that rally. There were a lot of people that were very confident that the lows in this market were seen on 1/22 and 1/23. Those people that believe that is the case still, are living in serious denial about the true problems this market has. Unless you are only focused on the oil, gold, steel, metal, food, ag, machinery, or chemical stocks, there is no way anyone can be serious when they say they are bullish on this market. Everywhere I look I see some big damage that was caused by today’s selloff and the reality of the situation is very clear to me. This market is not a market to buy.
Today, stocks were crushed, as a raft of poor economic data and more subprime BS slammed the door in the face of the bottom-callers. Part of it was due to the consumer as for the third month in four their was no growth in spending. And for those that truly do not grasp how important that is, I hope I can help convince you, along with IBD, that it is indeed very important.
IBD echoes my feelings and they use 2001 as an example. If not for the spending habits of the consumer, there indeed is a high probability that we would not have rallied off that horrible time the way we did. We came back extremely strong and it might not have been that strong if not for the consumer. And after LTCM and the global crisis back in 1998, it was the consumer’s spending, once again, that helped keep the economy going just enough to keep other sectors moving. If you want to know what it is like when people stop spending money, take a look at post-bubble Japan in the 1990s. This is a big deal and is just another piece of the puzzle that shows the economy is in a lot of trouble.
The bulls want to say that this is just a minor dip and that things will be better in the future. Realist look at that argument and immediately take a look at the books of the homebuilders and say “wait a minute.” “This is just starting.” Yes, in fact it is just starting. How do we know that? Easily. I call it common sense. Do you think the Fed is lowering rates because the economy is on fire? Do you think that when they are done the market is just going to say “thank you” and start running again?
Our GDP numbers have just started trending down and when you look at factory backlogs and activity it is almost impossible to say that this will correct in just a quarter or two. But on top of this poor GDP is the nasty PPI and CPI which show that we have real inflationary problems. With that inflation we have a big problem with jobs as joblessness is rising and wages earned is growing at its lowest level in a very long time. This is not the proper macro trend for our stock market. And all you have to do to confirm that the macro trend is not good is look at the stock market. A bullish market with a strong economy does not look like this. This is a market eerily similar to the late 1960s and early 1970s. For those that do not know their history, 1968-1980 was the equivalent of investor hell, as the DJIA moved -.22%. So basically it was twelve years of nothing.
However, not to fear, active investors, as many stocks made a lot of big gains during that time. If you backtest your charts of the DJIA you will see that there were some very serious trends back then that allowed us to make some good money on the long side (1968, 1970-1971, 1972, 1975, 1980) and good money on the short side (1969-1970, 1971, 1974, 1977). During these runs, many stocks, obviously produced some great gains. So if we are about ready to enter a period of stagflation or enter a recession, there should be plenty of shorts for us to profit off of. If you are too nervous to short or are too inexperienced, don’t be shy about keeping those cash levels high. Most people, if they would have stayed in cash, during the past few months, would be sitting pretty with gains much larger than the market. I know a lot of people that have losses since the start of this year (like yours truly in 4 of 6 accounts) but the key is to see if you are beating the market.
A lot of people do not understand that just because you are down, does not mean you are a loser or a bad trader. If you are down 10% this year, you should not be upset. Instead you should realize that you are beating the Nasdaq by almost 5% and that makes you better off than well over 50% of investors out there. The best bet to do now is to make sure you stay locked in that cash. Let the mediocre stocks come flying by with their almost nice chart patterns that still fail in this choppy market anyways because 3 out of 4 stocks follow the general market. So if the market is going nowhere, chances are that your stock will not be going anywhere either, unless it is in one of the top 20 industry groups and only if that group has been climbing the list.
This is why I keep saying it is ok to be in cash. By going to cash, you can make sure you do not lose money while you learn how to trade and then when this crazy market is over and a new “real” uptrend starts instead of having $385,000 to try for that 1000% (which should be doable with 4 to 1 margin–study my ‘past big winners!!’) gain you will still have the original $500,000. And trust me more of you (like 99%) will end up with less money when you get out of this market environment.
Luckily for me, I still have a lot of short positions that did not signal any full sells while we had that very low volume drift higher. Those shorts piled it on thick today. Not only that, the longs that I own all pulled back on lower volume and still have nice chart pattterns–that is, of course, mostly the commodity stocks.
But there is a group of longs that I started to go long based on the strong fundamentals and charts. That is the medical stocks. However, after Friday, things have changed as HMSY, CMED, CHDX, and AMED all had to be fully sold today. This is kind of shocking, considering that medical stocks historically do well in bear markets. This along with the utilities falling in a bearish market environment has to be considered really bad.
I am not sure the reasons why these stocks are reversing. But what normally happens with stocks that everyone think should be going up but selloff on no news is that something bad is going on industry wide underneath but will not be known until much later. Taking those charts along with two popping into my head that I just saw (ELN XNPT) and I believe there is a deeper macro issue happening.
What I personally think might be happening here is one of two things, or both, or none. The medical stocks are selling off because consumers are so extended (130% in debt I recently saw) that they simple can not afford to frivolously use up their medical. Or it could be because the sector is looking ahead to a Barack Obama or Hillary Clinton winning and the taxes, trade barriers, and regulations that will be imposed on this industry, along with the insanity of the already-failed-in-Canada-and-England universal healthcare. No matter how you look at it, it is not good for this industry, and now the market appears to have recognized it.
Whatever the reason is the fact that these stocks are failing and reversing on strong volume and red BOP is very bearish. This leaves ONLY commodity related stocks that are moving up and to me that is scary. They are moving higher because it is obvious there is too much money chasing too few goods. This along with the horrible regime of Mugabe in Zimbabwe has helped to spur what could be 100,000% inflation by the end of 2008. But his is also impacting us here as corn is used for the ridiculous wasteful and “carbon emitting” ethanol fuel. This then effects the food chain and line. Combine this with some bad weather here and there and you get some real problems. Hence, all our great looking commodity charts and ugly everything else. There seems to be no end to higher prices in sight and the charts while going “exponential” are no where near at the end of a parabolic run.
Helene Meisler recently penned a piece suggesting they were parabolic. Well, my fellow colleague (who lives in St. Louis, where I was born; I think I got the better end of the deal ;)) Helene did not look at enough charts and if she would have overlaid the current ETFs over other parabolic runs she could see they are just starting. Fortunately, I am not the one that has to tell her this as Manning was immediately on top of this including his own conversation with Jim Rogers.
Jim believes we are only 1/2 way through this run and if it started in 1999 will last until about 2018. So take that for what it is. Jim is also short MSFT and so am I. So if the guy is long what I am long and is short what I am short, who am I to argue with the man. The only amazing thing is that Manning can talk to Jim. LOL. I don’t even think Jim would look at someone like me. Which is fine with me, by the way. I prefer to be the outsider looking in.
My returns with this CANSLIM system sure does prove that. These “professionals” couldn’t even touch my subscribers with their money. For proof of that, Cramer’s Action Alert Plus has an unbelievably pathetic 30% return since 1/1/02. Now I know that is wrong to say something like that and I do apologize for being a jerk. The truth is that he should have doubled his money. Look at the IBD 100, look at the IBD 85-85, look at the returns from the AAII screen that runs the CANSLIM system, look at Ken Heebner, and look at me, axman, market, and wutan (and many others). 30% is terrible. Yet I am sure for those that ONLY watch Cramer on CNBC, it is incredible. Not good.
Now, I will admit, I do not have the money Cramer has, but I lived in Manhattan and Manhattan prices have nothing on West Side Maui prices. Everything I earn almost goes into my cost of living, so it is going to be hard to be worth what Cramer is worth now. But when I am as old as Cramer is, trust me, my Action Alert portfolio will be doing a lot better than his. Mark my words, mark my ‘past big winners.’ The only ways it couldn’t be is if we never have another bull market ever again or if we are nuked. Either way I am screwed and at least I know how to surf. If there is no stock market, at least there might be waves. If there are no waves, there is still plenty to do in the ocean.
Getting back to this market, I want to go over some internal numbers that caught my attention today. First off, besides the NYSE and SP 600 which only barely made it over the 50 DMA, the rest of the indexes spent five weeks basing BELOW this key moving average and that combined with today’s crack on 20% higher volume is bearish. On top of that, new lows killed new highs by a wide margin of 39 new highs to 360 new lows. This is not what you see if the pullback was just a normal pullback in a market that had in fact bottomed. If that was the case we would have seen the new lows stay around the number of new highs since they were close the past few days. This expansion confirms the weakness.
Now, there are a couple of things that indicate there was some fear in this selling. This can be seen in the VIX that jumped 11% to 26.50 which is a good pop but still a weak reading as it is still almost 100% away from the 50 needed to signal a GREAT BOTTOM. On top of the VIX, the put/call ratio jumped to 1.21 which indicates there was a good little amount of fear in the market today. However, with the put/call, big jumps usually don’t matter unless the stock makes a big move lower and then puts in a very bullish intraday reversal closing higher. The near 3% move just is not enough to signal a day full of capitulation. So 1.21 is just not high enough. When we see another day similar to August 16th, along with the put/call hitting 1.5, then I may declare a bottom.
For now, however, without an extremely high VIX around 40-50, a put/call around 1.5, or the investors intelligence showing more bears than bulls, there is simply no way I can believe 1/22 and 1/23 are bottoms and today’s swoon along with all the ugly stock charts and fresh breakdowns signals to me to be ready for new lows. If that happens, I guess the bottom callers will give it another shot. They sure do think we are going to forget that they keep calling these out. They will continue to be wrong, until you do not hear any more bottom calls.
Once you stop hearing those bottom callers and start seeing more SWIR EGHT USNA EPIC EVOL TASR FMDAY DITC FLML SIGM MOBE from 2003, IST (MT) from 2004, LMLP LPTH MRVC PARD CAMP NEWP CRGN from 1999, HRZ from 2006, AFSI from 2007 and maybe, just maybe, CMP in about five weeks. It would need to continue to move sideways on low volume (with maybe a few big accumulation days in between) and max green BOP. If it could do that we might have our first “HOT” chart since APPY on September 19th and 21st (was too speculative to load up).
But if we continue to selloff and we do not see those pretty charts setting up then what I will be doing will be the same thing I was doing shortly after this market topped. And that is shorting stocks of these high priced ex-leaders that are clearly breaking down. Right now, almost every single stock that I am monitoring as a short is no where near being in a position to short. Most still are not close enough to the 50 and 200 day moving average to warrant any big short position.
Recently, I have been very lucky and two stocks have setup in good short positions two days in a row. What makes this even better is that I was already long these stocks going into Thursday’s session. Those that are silver to platinum know which two I am talking about and if you study those charts you will see two stock that have done everything right when it comes to being a good short position. It has topped, broken down on huge volume through key moving averages, rallied on lower volume back to the moving averages, and breaks down again on strong volume. To go along with that I like to see red BOP throughout the chart and see the RS line making new lows before price.
If I continue to find charts that are red and setup like this, instead of the usual “green” subjects, I will obviously be focusing on the short side and not the long side. However, right here, there are not a lot of stocks setup right as many are either down too much already or the stock did not rally back far enough to key resistance or the moving averages. So right here, you are basically still in no man’s land as it is hard to short and hard to go long.
Now, with all of this being said this weekend from me, it is probably obvious that I am very bullish on commodities (via the charts) and very bearish on the economy (via the charts and macro data). And even though I know we have not seen any real fear with the VIX failing to hit 40-50 and the put/call refusing to print a ridiculously high number, I do not deny the fact that we could see the lows shortly, if indeed this is just a minor blip in the world economy and not a major setback that will take years to fix.
If that is the case, and the market puts in a powerful follow-through day on huge volume (which it NEVER did off the 1/22 reversal), then my short side bias will obviously drop. It will drop further if I can find some more charts that are looking like CMP and SWC. You already know about CMP, but if SWC can chill-out for five to seven months and create a nice quiet base, just like CMP, SWC could easily be a huge winner. It has already built a right side of a base on mostly green BOP running up almost 150%. If it can build a high tight flag, flat base, or another base on top of it, I would be very bullish on this stock. And if I see more stocks like these then I will be very happy. The last thing that would have to happen to get me fully bullish would be for the remaining shorts to have an extremely bullish day (basically following-through off the lows) that lets me know that the easy gains are over.
I have no problem with being a bull here, but to do that I will need reasons to be. I am not just going to be a bull for the sake of being one. I don’t need to call a bottom. I don’t have to impress anyone, my accounts give me enough feedback that tell me all I need to know about what being a bull is all about here: ignorant pain. That is unless you are long the commodities. But besides the gems, there is nothing out there with “hot” chart patterns that are slowly and steadily climbing the 50 DMA and 200 DMA higher.
When I have proof and reasons to be bullish I will be bullish. Give me a high VIX, more bears than bulls in the investors intelligence survey, a high put/call ratio, a stock market follow-through day with a HUGE price and volume gain, and a couple of handfuls minimum of stocks that look like my ‘past big winners’ and how CMP is starting out and I will be more than happy to come down with a case of “irrational exuberance.”
Until that happens, chances are very low that you are going to get any kind of rally that has any kind of legs. Yes, we have the commodities moving but unless you are experienced and know how to hold through some volatile trending there is not going to be a lot of gains to be had by nervous traders who sell on any sign of weakness. There are sure to be some volatile movements in these stock prices if they continue to rally.
The best thing I can advise, once again, is that everyone keeps their trades very small, if you have to even trade at all. Keep the cash levels in your account very heavy. If you are experienced with the short side, then by all means take some of your favorites that are setting up in proper short positions short. If you are a newbie and you have not established a consistent long-term track record of making money on the long side, then please heed this advice and go to cash. Your account will thank you. It will be difference of starting the next bull market run, that could produce for you a 10,000% gain if you buy the next NTES, SOHU, and SINA and get those 2,500% returns in a year, with all of your starting equity (let’s say $500,000) or just some of your equity (let’s say after a year of trying to trade this market you are left with $390,000). $500,000 x a 10,000% return, versus $390,000 x a 10,000% return, is a much better way to start a new bull market.
What most fail to realize is that the chances of you losing money in this market is at least 75%, since three out of four stocks follow the general trend of the market. And that is why for one last time I am asking that newbies please keep their cash levels high here so that when the next trending higher, heavy accumulation, max green BOP, perfect fundamentals stock comes along you will have all of your money to put into it instead of some.
Most traders are churning their accounts slightly lower here. Including yours truly as I have some accounts down for the year. However, being down 1%-5% is A LOT better than being down 15% like the Nasdaq is near. There are a lot of bear market where some sectors do extremely well. That sector, for us, is commodities. Besides maybe poking a few tiny longs here and there, please keep that cash level high, so that when the next 1998 or 2002 bottom occurs, you will know that it is time to start looking and to start actively investing on margin.
I hope you all had a great week and that Friday did not get any of you leaning too heavily one way or the other. If you got caught, at least you can’t blame me. In my RealMoney columns and on this bronze commentary, over and over, I have advocated new active investors to raise cash. If you are listening to what I am writing, then you are sitting pretty and should be very excited for when that next bull market comes. I know all I have to do is stair at my ‘past big winners’ for a little while and the joy and passion I had during those times hits me like a great acid flashback (is there such a thing?).
Have a great weekend, don’t forget to read my RM column. It was posted late due to internal website problems. Aloha and I will see you in the chat room where it is always a bull market somewhere. SURFS UP!!
current holdings up this week and their returns since their purchase: WILL BE POSTED LATER TODAY
Last 5 posts in Bronze Commentary
- FAQ - March 27th, 2008
- There Sure Is A Lot Bullishness Out There After Today's Huge Lame Bounce; Real Bottoms Come With Volume, Unlike What Cramer Tells You (How Often Is He Wrong?) - March 18th, 2008
- DJIA Leads The Way As BSC Rocks The Stock Market On Mixed Volume; How Can This Be A Bottom Without A HUGE Surge In Volume On the Nasdaq And NYSE? It Can't Be! - March 17th, 2008
- BSC Blowup Proves A Chronic Emailer Wrong And, Once Again, Proves The Power Of CANSLIM; Stock Market Indexes Selloff On Mixed Volume But Hold Recent Lows - March 14th, 2008
- Time To Look For A Follow-Through Day, After Today's Bullish Reversal Off The Morning Lows; Metal Ore/Gold/Silver And Select Oil&Gas Stocks Are Our Leaders - March 13th, 2008
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Hey Josh,
I’m looking st SPW as a possible short. Do you think it’s set up correctly?
Thanks,
Tom
Meant to say “setting up correctly”…. know it hasn’t crossed 50 or 200 DMA…
ABSOLUTELY NOT! It is still in an uptrend! Shorting stocks in uptrend is THE EXACT OPPOSITE OF WHAT WE DO HERE!
HISTORY HAS PROVEN!!! THAT THE BEST TIME TO SHORT STOCKS (WHEN THEY MAKE THEIR FASTEST, BIGGEST, AND CLEANEST FALLS) IS 5 TO 7 MONTHS AFTER A TOP IS IN.
How can this stock be a short when I was just long? It could but not really.
BUT :)………………..
If it can breakdown below the 200 DMA and then rally back to the averages on low volume I would think it would be a good short. As long as volume is big on the downside. I would assume it should fall to at least the 2008 lows and at best the 2003 lows.
Excellent reading, Joshua. Like you, I have more than half my shorts which never gave sell signals, and all but one of them worked it yesterday. Patience is a virtue in this market–overtrading will generate nothing but losses & commissions.
If you have nothing to do during this boring market, check out this article from Harpers:
http://www.harpers.org/archive/2008/02/0081908
It’s a good overview of the entire history of bubbles in the USA–how we got to this one, how it might end, what it would take to get us out of it.
Thanks for the column Joshua, and thanks for the link Brian. Interestingly, that’s the second article I’ve read this week that is not focusing on “doom and gloom” and a “declining market”, but specifically a “crash”.
There’s a guy I read (billcara.com) who is well-respected for his economic analysis, and he’s been calling nominally for 10,000 on the Dow and 2,000 on the Nasdaq before we can even think about putting in a bottom.
If you have time, you might be interested in his comments from Wednesday, pasted below (by the way HB&B means humongous banks and brokerages):
“HB&B got away with the problem that the asset backing was dubious at best for a time because some of those mortgages were maintained in good standing, and because the bankers were saying to their clients, “Trust us; we’re your bankerâ€.
But they knew, or ought to have known because it was their professional responsibility to do so, that the collateral was deficient. It was only because they said their products held a certain value that the buyer accepted the price. The buyers were deceived, and now the world is about to see at least a trillion dollars of class-action law-suits against HB&B.
Legal action takes time to pursue and the result is often unknown. But in this case, the defense is virtually non-existent. The result is almost a foregone conclusion. What that means is that the capital that props up HB&B today will be removed tomorrow.
Its one person’s opinion but I think these banks are done like dinner. Kaput.
Yesterday, Goldman Sachs, which claims to be free and clear of the credit market crisis, dropped -2 pct in a heartbeat about 3:00pm, hitting a 171 handle. Two weeks ago GS was trading in the low to mid 190s. Three weeks ago, GS traded over 208. The image that comes to mind is rats jumping a sinking ship.
You will not hear this from Financial Entertainment TV.
That’s why I say, we trade prices. By doing so, we have been forced to live in the real world.
Last night, I pointed you to Glenn Beck’s concern over FDIC because you ought to be listening. There is no industry insurance in the US that is capable of saving the banking system. In recent months, the world saw there was no industry insurance in the UK that could save banks as the government, meaning the People, had to guarantee the debt of Northern Rock bank, which is one of many in trouble, which means that the People now have to save all the banks.
The amount of the People’s guarantee of the debts of Northern Rock – a single bank in England that I’d say 99 pct of Americans had never heard of before – was many times larger than the total value of the FDIC industry insurance for all the banks in the United States. So, what does that say about the crisis in America?
Bankers rely on what I have referred to as the credit ring. If enough assets go bad, meaning that the bank cannot collect on their holdings, the bank fails, which was the case at Northern Rock. But one bank is also the customer of another bank, which means that when Bank #1 fails, Bank #2 is in trouble, and so on down the line.
The notion of “systemic failure†at HB&B is like a nuclear reaction in silence. By that I mean, HB&B will not – can not – tell you they are insolvent. Bank #2 will report to its regulator that the loans of Bank #1 are good, and they will do that until Bank #1 closes its doors, which will not happen as long as FDIC has some money in the cash register or the Treasury Secretary (the former head of Goldman Sachs, who I’m guessing is leaking word to his friends that the good ship America hit an iceberg) is able to run the 1-800-HELP flag up the pole for bankers under the pretense of doing same for so-called lowly sub-prime “liar loan†offenders.
HB&B controls Other People’s Money in the trillions. In less than the blink of an eye, a cornered rat will use that money to push up stock prices (and US Treasury prices since the “government will always payâ€).
So, while Mom & Pop are watching serious problems hit the economic and corporate world, they cannot understand why prices of stocks are so high. I said it before: prices are where they are because HB&B has put them there. But if you look at the 12-month performance table in my Daily Report, look at where XLF (Financial sector dominated by HB&B) stands in relation to the other sectors. It’s a disaster for shareholders.
But think for a moment which shareholders. Do you really think these HB&B executives don’t know what’s going down, and, while keeping mum, have not been selling their own stakes in their banks?
Remember the word credulity syndrome: don’t get afflicted. Not to pick on one banker and one bank, do yourself the favor of checking the personal trading record of one of Financial Entertainment TV’s favorite bankers and Talking Heads, Dr. Sherry Cooper.
Ask yourself why she disposed of so much BMO stock at the top of the stock cycle for BMO, which co-incidentally was when all the credit market kafuffle hit the news.
Dr. Cooper may be a fine person – I wouldn’t know – but I surmise she is much like any banker – any human being – who is risk averse when facing reality. The issue isn’t about individual bankers, including Talking Head bankers, it’s about the honesty of the relationship between the bank and its stakeholders – depositors, shareholders, bond holders, employees and vendors.
My point to all this is that I don’t think there is near enough honesty at HB&B today, and their insurance is not capable of holding the industry together. When the People realize who ultimately will be holding the bag, they too will do what Dr. Sherry Cooper did, and sell their stocks. There is a big liquidity crisis on the horizon. I cannot say more other than I believe it will become apparent as soon as the current commodity bubble pops.
Remember, gold is the last dancer off the floor, and then the music stops…”
Brian,
The Article in Harper’s by Eric Janszen was an excellent read.
It may protend the future.
Maybe most of the next CANSLIM canidates will come from the Alternative Energy arena with Al Gore as the poster child.
I am sure Josh will help us in that regard.
I think the one that comes after Alternative Energy is likely to be Biotech. Computer power and DNA analysis will be so powerful in 10 to 15 years that it will launch with the help of venture capital and government another bubble.
Interestingly, maybe this coming bubble of Alternative Energy will be a focus on the world outside of us with its need of energy and supplying WALMART; whereas the following bubble of Biotech will be a focus on the world within our bodies and minds.
A random thought: I always thought of the Terminator Movies as Computer Hardware outside of ourselves where as the Matrix set of Movies are like (almost invisible) system software that framed our paradigm of the world around us.
It looks like the mass psychology of the people, governments, and the stock market (which really is mass psych applied to buying and selling) is to seek out God-like futures for us to place our hope in.
Another way for mankind to not live life fully in the present but instead to try to play God.
Best regards,
Bob Martin
that above article is funny…….as always……..dont make investment decisions based on one’s opinions…..ESPECIALLY ECONOMISTS……i only skimmed the 1st half but does the guy really think that the world markets don’t understand the banks financial situations and that everyone is missing that ? i doubt it.
read this this weekend from hedge fund manager blog “The CRB Index is up 122.3% from the October 2001 low, but is 37.7% higher in just the last six months even as global growth decelerates. In my opinion, this type of parabolic move in commodities is unsustainable and has many of the characteristics seen during other blow-off tops.”
Fantastic stuff gentleman!!!! Excellent reads, Brian and Dave.
Bob, very “mind-bending.” I enjoyed the depth of the statement!!!
Extremely thought provoking. Makes me want to watch Terminator and the Matrix.
Ork, I believe you could be correct. The charts are “STARTING” to show this. However, I do not see this particular point in time as being a “blow-off.” There is still plenty of room to run.
Josh,
Thanks for the feedback!
I am new to your site i.e. within the past 40 days.
It is wonderful to finally find someone (you) who is ruthlessly honest with themselves and the market.
I have made every mistake one can make in dealing with the stock market. So I have learned that I (and no one else) am my own worst enemy.
Management of Risk needs to always come first.
I am very grateful to you for your realistic view of the world and the obvious passion you possess to help others!
E.g. fear and greed/mass psych of the market/fundamental analysis/ t.a./economic/ and so forth).
I am excited to learn from you and make some money.
It is so difficult to find someone who trades with the correct mindset and a time frame that I can work with.
So thanks again!!
Bob Martin
Yes, I recommend, for maximum results that you ONLY consider going long CANSLIM criteria longs and stay away from the shorts and the speculative longs. That is, of course, until you start making and KEEPING money. Once you do that, you can and WILL do whatever you want. But to keep the losses manageable and to focus ONLY on the best, stick with just the CANSLIM stocks.
My dream is to hold EVERY stock I go long at least 12 months for long-term capital gains. However, the 200 DMA keeps me out of IMA, C, GS, and every other stock down 50% since November.
Thank you for the great feedback. Rest well knowing that this game, while NEVER easy, is nothing I ever worry about anymore. I know that there will always be 1999 and 2003 market environments that produce these HUGE winners that can give us annual returns of 500% and MUCH higher. I also know that in difficult markets like this, eventually a CMP builds a nice long base, breaks out, and runs to a 100% plus gain in a short time.
I have seen it too much, to not know it WILL happen again. And like I said, if it doesn’t, thank God I have learned how to short.
However, like Cramer says (but you must also do!) there is always a bull market somewhere. Well, he definitely has one right: AUY. So, so far so good.
ALOHA Bob! I look forward to watching your account and YOU grow. Which I think YOU growing is more important. Because you will NEVER forget these lessons and the day will come when it clicks, IF YOU STICK WITH IT, and you will get your own ‘past big winners.’
Aloha gents!
I would be weary of economists…its all in the charts!
Great postings everyone.
Agreed. I’ve enjoyed reading everyone’s posts.
Before I move on I need to clarify one thing. I did not say that Bill Cara is an economist! I said that his economic analysys seems to have a good following.
His site is actually a free trading blog first and foremost, and within it he discusses macro issues. I stumbled upon it when looking at “Forbes Favorite” listings for trading blogs. He’s been on that list five years straight.
Good luck this week.
wow. you can’t beat that!