I had a few Internet problems today during the market hours and therefore took a detour on some other projects so I apologize for the brevity in my market analysis.
The truth is that I continue to have the same problem I have been discussing for a while now. When people ask me why I am not fully margined, I feel like I am defending my investing. However, what I am really doing is being DISCIPLINED. My methodology has me go long Featured or growth stocks that either have a good base (if it is Featured), has a bullish base (it will be a small to regular size long), or has a perfect max-green BOP, huge volume, and at least a tight-5-week base (this is the longs I LOAD UP on) then I go long. Right now, I have a LOT OF LONGS (over 100). However, not a single one but RINO came close to giving me a chart to get excited about.
Earlier in May and June there were quite a few Featured stocks that got me excited about some large potential gains but EVERY SINGLE ONE has disappointed me with lame gains or a reversal. This is not how my past bullish holdings have acted. If some of you are new to my analysis, all you need to do is go to my OLD blog here and see that in 2005, 2006, and early 2007 (even late 2007; DRYS-FSLR-APPY) I had plenty of longs that produced large gains from very beautiful chart patterns. From stocks like ERS in 2005, HRZ in 2006, or AFSI in 2007, the perfect charts were there. If you go back to my past big winners and look at my biggest winners in 2003 and 2004 you can see that there were TONS of “perfect/hot” charts to “load-up” on. From HIL to EPIC to TASR to IST to AAPL, I had no problem finding stocks that provided huge gains from very tight and nice patterns.
When these patterns show up, that is when I will be fully invested. Until then, I can not let mediocre charts get me hypnotized into buying them. I know some are making huge gains but if any of you know me you know that I ONLY HAVE SKILL. That is why I am not a multi-millionaire. If you think you are just skillful and make that kind of money trading you are wrong. You need to be skillful and then get lucky to be in a raging bull market like I got lucky buying a lot of a very beautiful chart like TASR. However, ERS in 2005, decided to shake me out of 1/2 the position before it ran 550%. Still the other half I bought did excellent and still produced a large enough overall percentage return to make a big difference in my account. I would like to thank BOOM and GIGM of that year also for helping out.
The bottom line, as long as this market goes up, I am bullish. However, I will not show that bullishness in my portfolio to the length I have in the past as long as charts don’t hold up well. If you think I am crazy, I ask if you did not see ADY three weeks ago, ARST/STAR one to two weeks ago, and then today ITRI WSH BDX DRIV OCR and HSC are just a few to go from a normal uptrend to one nasty ugly huge reversal. If you think I saw this kind of action in 1999, 2003, or even 2004-2006 you are wrong. This kind of action started to show up a little bit in 2006 with some more speculative breakouts from “hot” bases. However, it wasn’t until 2007 that some of my best looking setups, after AFSI and TESO, started failing. Bases like INXI and FALC were just two that showed some very bullish setups that ended up sending me for a very nasty ride lower to a cut loss. Then there was last year and now where nothing has shown up but XSI (turned ANCI). Besides that, anything that came remotely close either failed right away or failed right after a short gain. Until this changes, this market is going to continue to go higher without me.
If the market is nearing a pullback (which you would think something is up with my short scans increasing and with another new short today) I would welcome it on lower volume. I would also welcome the pullback to last longer than two weeks therefore we could get some very pretty longs to get long. If after a basing period of at least a month it wants to go up 5 months in a row, I would be fine with that. But we really do need nicer charts before I feel this market is safe to step away from. For now, you have to watch your holdings even during the day for big gap downs if you want to avoid giving up some of your gains. I take giving up some gains, over going crazy (which it what happens when I look at moving charts all day intraday–I need them to stand still 
).
So, I am a bull but I am not extremely bullish until I get nicer charts and short candidates stop showing up again. With the market moving higher, you would think that my short scans would have less stocks showing up. Instead as the market moves up the numbers increase. Very odd. Be careful out there and make sure you take profits when you have them. There is no reason to buy 1,000 of a stock it go up 100% in 1 month and you still have 1,000 shares. You should have 500-700 right now. Why? I repeat, “we still do NOT have the proper bases to get the TASR or 1999 returns.” It is a day traders market almost. Position traders need to buy it right or not buy it at all, in this market.
Aloha for Thursday. I will see you on Friday.
PS: There will be no video tonight due to time constraints.
PSS: This is my final year on Maui after 10 wonderful years here. We are moving to Austin, TX next year. The decision is final and we are house hunting.
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