Well, the year is over with respect to trading and I'd like to give both my thanks and my best wishes to each of you. As we look forward to the new year, we need to redouble our efforts to make this the best year by reducing our mistakes and enhancing our good attributes. So, to one and all, have a happy new year and I'll see you here bright and early on Monday where we will look to get off to a fast start.
The Daily Dose of Trading Comments
Here you'll find short quips concerning the market mood and direction posted intra-day as the market dictates and time allows. You can find TATs strategy here. Comments here are from a trader who trades for a living.
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- Slow listless type trading
- Small players in the sandbox today
- Mixed session so far
- Christmas is upon Us
- The Bull Within Us
- Merger news stoking gold again
- Tis the Season
- Little time remains
- Bears tried to sell it back down!
- Readers chime in ...
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- Current Posts
Friday, December 31, 2004
As we head towards the close, we are seeing some slow trading but nevertheless positive action once more. These markets seem destined to go out at or near the highs of the year.
We have repositioned much more towards neutral looking to protect against a potential strong start to the year which is customary yet not convinced of it's staying power. That's pretty much a summary of what the year has been all about ... almost but not quite.
We have repositioned much more towards neutral looking to protect against a potential strong start to the year which is customary yet not convinced of it's staying power. That's pretty much a summary of what the year has been all about ... almost but not quite.
The new year always brings time for reflection ... that seems to be part of what starting a new year is all about. What did we do good, bad, so-so. How can we improved.
I've been spending a lot of time considering why this year produced mediocre returns. At 15% gains for the years, that's certainly not a knock out punch. We can get by, but we need to get back to the 30% to 40% range. So what was differrent. Here's the list I came up with. I'd love your feedback if you see otherwise.
1. The market was range bound most of the year and that significantly reduced our ability to produce outsized gains. In a range bound market you have to sell the pushes upward and buy the pushes downward. We didn't take advantage of what the market was offering until after the summer.
2. We were too quick to the trigger on many issues not allowing them time to play out. Although we did improve greatly on the idea of scaling in and out of positions, we didn't allow our winners time to run farther as we scaled out too early. We need to be more patient in our exits on winners.
3. We had one bad month were we leaned more on fundamentals, not technicals, and took a crap shoot. In reflection, that may have been partially a result of trying to make something happen. That set of mistakes took two months to recover from. Again, protecting our capital has to be the golden rule and we don't press a trade unless we really do have the odds on our side.
4. As part of the above, going into earnings, we need to keep some positions open (so we can get the outsized gains) but we also need to keep them small relative to our normal sized positions. We need to see if the early earnings reports are bought or sold (does the market support the good ones or even the bad ones) and use that as our determinant. We may need to start looking into a way to hedge a particular company (options) into a report so that we need not exit prior to the report.
These are the items that stand out in my mind. Always something to work on. I encourage you to reflect on your trading and consider how to improve it. It's not something that should be once a year but instead a few times during the year as it's never a bad thing to do.
The markets have worked their way back to red here as I write. Not a lot happening. We have pretty much flattened out our positions into the new year and are likely about done for the day. If we get a bit of weakness into the close, I'll finally lift those couple of shorts I've been yapping about. Outside of that, I continue to focus on my computer systems. I'm setting up another system to allow me to monitor more information real time and hopefully improve my reaction times.
I've been spending a lot of time considering why this year produced mediocre returns. At 15% gains for the years, that's certainly not a knock out punch. We can get by, but we need to get back to the 30% to 40% range. So what was differrent. Here's the list I came up with. I'd love your feedback if you see otherwise.
1. The market was range bound most of the year and that significantly reduced our ability to produce outsized gains. In a range bound market you have to sell the pushes upward and buy the pushes downward. We didn't take advantage of what the market was offering until after the summer.
2. We were too quick to the trigger on many issues not allowing them time to play out. Although we did improve greatly on the idea of scaling in and out of positions, we didn't allow our winners time to run farther as we scaled out too early. We need to be more patient in our exits on winners.
3. We had one bad month were we leaned more on fundamentals, not technicals, and took a crap shoot. In reflection, that may have been partially a result of trying to make something happen. That set of mistakes took two months to recover from. Again, protecting our capital has to be the golden rule and we don't press a trade unless we really do have the odds on our side.
4. As part of the above, going into earnings, we need to keep some positions open (so we can get the outsized gains) but we also need to keep them small relative to our normal sized positions. We need to see if the early earnings reports are bought or sold (does the market support the good ones or even the bad ones) and use that as our determinant. We may need to start looking into a way to hedge a particular company (options) into a report so that we need not exit prior to the report.
These are the items that stand out in my mind. Always something to work on. I encourage you to reflect on your trading and consider how to improve it. It's not something that should be once a year but instead a few times during the year as it's never a bad thing to do.
The markets have worked their way back to red here as I write. Not a lot happening. We have pretty much flattened out our positions into the new year and are likely about done for the day. If we get a bit of weakness into the close, I'll finally lift those couple of shorts I've been yapping about. Outside of that, I continue to focus on my computer systems. I'm setting up another system to allow me to monitor more information real time and hopefully improve my reaction times.
Two things as I'm still running behind and have now coupled that with computer problems.
1. ACe's follow up post brings out an important set of points. One, tops tend to be rounded, not vertical as bottoms are more likely to be. That means there is usually time to exit or to turn. Granted.
2. ACe believes that the drop doesn't come until the April time period. That I don't know but what he's saying is really be viewed in line with my thinking and that is that there will likely be opportunities on both sides of the tape these first three months of the year. I believe that January will not be as nice as everyone expects and is why I've become so defensive here. Can we make another 5 to 6% run. Most certainly. Does it come right away? I don't think so.
3. Momentum is hard to kill. We've seen it before; most recently with the current run. When markets get going in one direction or the other, it takes a lot to slow them and turn them. They are like a supertanker. They don't typically turn on a dime and the turn usually takes time to develop.
As for today, I've been a busier than I expected as I flatten out into the new year. Have added a couple longs in EXBD, GENZ, VISG. Have also added another short in STSA. Internals are a bit negative this morning and it looks to be another sleeper overall.
1. ACe's follow up post brings out an important set of points. One, tops tend to be rounded, not vertical as bottoms are more likely to be. That means there is usually time to exit or to turn. Granted.
2. ACe believes that the drop doesn't come until the April time period. That I don't know but what he's saying is really be viewed in line with my thinking and that is that there will likely be opportunities on both sides of the tape these first three months of the year. I believe that January will not be as nice as everyone expects and is why I've become so defensive here. Can we make another 5 to 6% run. Most certainly. Does it come right away? I don't think so.
3. Momentum is hard to kill. We've seen it before; most recently with the current run. When markets get going in one direction or the other, it takes a lot to slow them and turn them. They are like a supertanker. They don't typically turn on a dime and the turn usually takes time to develop.
As for today, I've been a busier than I expected as I flatten out into the new year. Have added a couple longs in EXBD, GENZ, VISG. Have also added another short in STSA. Internals are a bit negative this morning and it looks to be another sleeper overall.
Having a hard time getting started today. These markets should have been closed as they were last week. I've two items on my agenda today. Adding a couple long positions and taking off a couple short positions. I'm looking to add a small cap or two for the opening of the new year. Something like VISG is appealing.
On the short side, I would like to get the drift today on AMZN and the QQQs to remove. There we are bucking momentum and we need to lift the risk.
It's likely going to be quite slow today and not a lot happening. By afternoon, they will likely have rolled up the sidewalks and called it a day. Whatever there is to do will come this morning.
On the short side, I would like to get the drift today on AMZN and the QQQs to remove. There we are bucking momentum and we need to lift the risk.
It's likely going to be quite slow today and not a lot happening. By afternoon, they will likely have rolled up the sidewalks and called it a day. Whatever there is to do will come this morning.
Thursday, December 30, 2004
It was another day of nothingness; nothing here nor there. Tomorrow promises to be a continuation. I'm out of here in body now after having been out in mind for a while now. Off to do some family things. If you have any position squaring before the start of the new year, tomorrow provides that opportunity. I'm really just looking to pull another short or two and look to add a bit more to the INTC setup. We will start fresh again next week for the beginning of our fourth year in the spotlight. Some times it gets a bit hot and sometimes we do so dumb things, but there's one thing about us that's a bit different from any other trading site you might read ... we tell and show it like it is. No gloss, no glimmer, just a lot of truth. If we do something dumb, we more or less say it was dumb. No one has a crystal ball and no one really can predict the future. Although Wall Street would have you believe that as would countless other predictors who wish to sell you a bag of goods. The main thing involved in making money when trading is to have a reasonably solid strategy, good portfolio and risk management so that you protect your capital. If you do that, you'll eventually rise to the top just like sweet butter in a jar of cream!
The market has pretty much flatlined here and I doubt a recessitation attempt will even help. Today and tomorrow are pretty much in the books already as nothing is likely to stir things one way or the other. If you are active today, I'd have to wonder doing what. Staying awake is the biggest problem you face most likely.
I'm off to do some other things and will check back in towards the close. Unless we get some weakness in our short positions, we most likely do nothing into the close.
I'm off to do some other things and will check back in towards the close. Unless we get some weakness in our short positions, we most likely do nothing into the close.
ACe Talking: Reading Lesson
Let me explain what I was saying earlier, for those who either cannot understand English or who have their heads up their backsides.
The charts suggest we are working higher, although I remain a skeptic. However, when you get patterns like, for example, the Transp Index, which breaks a very significant top (ie the 1999 high) and tests it successfully, you have to go with the trend. However, 2005/6 is not going to be a favourable environment for shares. This does not mean we go lower now. As the 2003/4 scenario showed us, we can hit the heights in mid January 2004, and still be at those same heights in March. So why rush to short in January for a 1 or 2% correction when you can wait till March?
Also, remember that the longest ever first mini-bull market bounce in a long-term bear trend is 30 months, which was achieved twice. This would take us into April.
Also, remember that even after a great end to 2003, we still had a 5-6% rise in January 2004. That would take us to the hallowed turf at 1260, which is where I go short. For those starting the shorts right now, I believe you are misguided.
I hope this is clear. If not, perhaps I will try and speak in American.
ACe
Let me explain what I was saying earlier, for those who either cannot understand English or who have their heads up their backsides.
The charts suggest we are working higher, although I remain a skeptic. However, when you get patterns like, for example, the Transp Index, which breaks a very significant top (ie the 1999 high) and tests it successfully, you have to go with the trend. However, 2005/6 is not going to be a favourable environment for shares. This does not mean we go lower now. As the 2003/4 scenario showed us, we can hit the heights in mid January 2004, and still be at those same heights in March. So why rush to short in January for a 1 or 2% correction when you can wait till March?
Also, remember that the longest ever first mini-bull market bounce in a long-term bear trend is 30 months, which was achieved twice. This would take us into April.
Also, remember that even after a great end to 2003, we still had a 5-6% rise in January 2004. That would take us to the hallowed turf at 1260, which is where I go short. For those starting the shorts right now, I believe you are misguided.
I hope this is clear. If not, perhaps I will try and speak in American.
ACe
Uh oh! Now I'm scared!!!
I just read ACe's comments from this morning and when our resident bearish view turns bullish, can the top be far away? I'm not joking here. When the last of the bears begin to question their position, their views, then we are indeed getting too bullish. This only reinforces my view that you have play it very safe going into the new year.
I just read ACe's comments from this morning and when our resident bearish view turns bullish, can the top be far away? I'm not joking here. When the last of the bears begin to question their position, their views, then we are indeed getting too bullish. This only reinforces my view that you have play it very safe going into the new year.
The overall positive momentum persists this morning as another low volume trading day emerges. I've really done nothing of size outside starting that INTC position before the bell. Will use weakness in that issue if it occurs to increase the size. Just bought a little IIIN down 8% or so to trend support line. The steels and construction stocks are seeing profit taking it appears. Not expecting much today barring some exogenous event. More likely to be slow and dull.
With but two days remaining to year end, the markets are levitating again at or near their yearly highs. With almost all money managers making their money in the last two months of this year, it's no wonder that we don't see much of a correction/pullback taking place here. It's to everyone's interest to leave it be. Seasonally, the last of the year and the first two days of next year are typically very bullish. So far this looks no different.
The problem is that unlike most years, we are sitting right at multiyear resistance levels. I have promised and article on what I'm thinking for the new year and I'll find a way to get it out in the next few days, but suffice it to say, there seems to be a lot of reasons for this year to not start out with quite the bang of past years. Instead, it seems that after the much anticipated buying spree that ususally starts the year, there may be very little follow through come middle to end of January. In fact, the earnings season that starts the second week of January could be the catalyst for the selling.
As a result, I expect to be reasonably flat going into the new year. A large portion of our portfolio will likely be parked in cash ... a nice and safe place to view the action. What will we take long? There's an old theme that plays out each year with the big money managers. They sell their dogs for the year in the big caps and they buy them back come the first week of January. The biggest dog I've been playing around with lately is INTC. It has lost a good 40% of it's value this year and the selling pressure of late has it looking on the charts. After breaking a downtrend line for the year, it's drifting right back to that line currently and despite the rally in the semi's yesterday, it was unable to lift. Our largest holding going into the new year on the long side will likely be concentrated in this stock as I would expect it to see some good buying pressure to start the year. The risk is back to $22.5 and it's currently trading but .75 cents higher now. Ought to at least trade back to $25 and likely higher this time around. With earnings but a couple weeks away, it should rally towards that date. That's the best idea I see on a slow end to the year.
The problem is that unlike most years, we are sitting right at multiyear resistance levels. I have promised and article on what I'm thinking for the new year and I'll find a way to get it out in the next few days, but suffice it to say, there seems to be a lot of reasons for this year to not start out with quite the bang of past years. Instead, it seems that after the much anticipated buying spree that ususally starts the year, there may be very little follow through come middle to end of January. In fact, the earnings season that starts the second week of January could be the catalyst for the selling.
As a result, I expect to be reasonably flat going into the new year. A large portion of our portfolio will likely be parked in cash ... a nice and safe place to view the action. What will we take long? There's an old theme that plays out each year with the big money managers. They sell their dogs for the year in the big caps and they buy them back come the first week of January. The biggest dog I've been playing around with lately is INTC. It has lost a good 40% of it's value this year and the selling pressure of late has it looking on the charts. After breaking a downtrend line for the year, it's drifting right back to that line currently and despite the rally in the semi's yesterday, it was unable to lift. Our largest holding going into the new year on the long side will likely be concentrated in this stock as I would expect it to see some good buying pressure to start the year. The risk is back to $22.5 and it's currently trading but .75 cents higher now. Ought to at least trade back to $25 and likely higher this time around. With earnings but a couple weeks away, it should rally towards that date. That's the best idea I see on a slow end to the year.
ACe Talking: Confused
With the best two years of the usual pre-election ramp behind us, it's time to consider the weakness of 2005 and 2006. Well, that was the plan. The problem is these damn charts, which are telling a different story. Take the S+P 500 for example. The weekly chart gives us a very clear reverse head and shoulders pattern, and if you go by the book, with the neckline at 1150-60 now broken, we have a target in the 1500's. Now that seems to be the stuff of fairytales, but I am only telling you what I see and hear.
I also recommend you take a look at the European stock markets. Take the Dax for example. Having cleared resistance at 4170 from January, I see daylight till the 2001 lows and 2002 highs which come in at around 5400. The index is currently at 4250, so we are looking at a 28% rise. The CAC tells the same story. If we break the 2004 highs of 3850 (currently 3830) then we are looking at the 2002 highs at 4700. The FTSE is heading for the 2002 highs of 5400, about 600 points away.
But how can we achieve these gains in the face of the negative headwinds we face in 2005 and 2006? I'll save the fundamental chat for the New Year, but it is clear that we should face an end to this current bull in the next 4 months. Quite what sort of gains we can pack into that time frame we will have to wait and see. But as I see it now, we still make new highs on a variety of indices, and until that stops, we will see everything get dragged up. One example I have been looking at is the DJ Transportation Index. It took a few days to clear the 1999 high of 3797, but we finally did it 2 days ago, and yesterday was the retest. We passed, and held above 3800. Now let's see how far we can rally into new territory. Same goes for the Smallcap and Midcap indices.
Remember, the topping process takes time, so we should get a warning. let's all be alert in 2005. For now, the green light is still on. The S+P 500 chart of last year looks almost identical to the current one. If it plays out, we get the high early January. But we also get those highs in February and March, after small corrections. As I said, don't rush it.
Have a good one. Back in 2005.
ACe
With the best two years of the usual pre-election ramp behind us, it's time to consider the weakness of 2005 and 2006. Well, that was the plan. The problem is these damn charts, which are telling a different story. Take the S+P 500 for example. The weekly chart gives us a very clear reverse head and shoulders pattern, and if you go by the book, with the neckline at 1150-60 now broken, we have a target in the 1500's. Now that seems to be the stuff of fairytales, but I am only telling you what I see and hear.
I also recommend you take a look at the European stock markets. Take the Dax for example. Having cleared resistance at 4170 from January, I see daylight till the 2001 lows and 2002 highs which come in at around 5400. The index is currently at 4250, so we are looking at a 28% rise. The CAC tells the same story. If we break the 2004 highs of 3850 (currently 3830) then we are looking at the 2002 highs at 4700. The FTSE is heading for the 2002 highs of 5400, about 600 points away.
But how can we achieve these gains in the face of the negative headwinds we face in 2005 and 2006? I'll save the fundamental chat for the New Year, but it is clear that we should face an end to this current bull in the next 4 months. Quite what sort of gains we can pack into that time frame we will have to wait and see. But as I see it now, we still make new highs on a variety of indices, and until that stops, we will see everything get dragged up. One example I have been looking at is the DJ Transportation Index. It took a few days to clear the 1999 high of 3797, but we finally did it 2 days ago, and yesterday was the retest. We passed, and held above 3800. Now let's see how far we can rally into new territory. Same goes for the Smallcap and Midcap indices.
Remember, the topping process takes time, so we should get a warning. let's all be alert in 2005. For now, the green light is still on. The S+P 500 chart of last year looks almost identical to the current one. If it plays out, we get the high early January. But we also get those highs in February and March, after small corrections. As I said, don't rush it.
Have a good one. Back in 2005.
ACe
Wednesday, December 29, 2004
So we end pretty much where began ... flat. Not a lot of opportunity to do much and not much reason to try either. We continue to piddle around, keeping high levels of cash and waiting. Not much more to say. It's back to the hoops where my 10 year old is teach this old dog a few new tricks. See you tomorrow.
Flat, flatter, flattest; that's an apt description of the action today as we really haven't seen any action of significance. The oils are catching a bid again, but outside of that the action is just plain dull.
We haven't been doing much today as we concentrate more on family enjoyment rather than trading at this period of time. The market is not always so affording so when the chips stack up such that I can enjoy my family more than would normally be the case, that's what I do.
Our focus has been rather narrow of late and will continue that way into the close today and the year. No sense in doing much between now and then from what I can see given where we are and what's happening.
We haven't been doing much today as we concentrate more on family enjoyment rather than trading at this period of time. The market is not always so affording so when the chips stack up such that I can enjoy my family more than would normally be the case, that's what I do.
Our focus has been rather narrow of late and will continue that way into the close today and the year. No sense in doing much between now and then from what I can see given where we are and what's happening.
Although it feels like the air is slowly coming out of this market today, the headline indexes aren't showing much give. Internals remain mixed and volume slow. I've continued to build a few short positions believing that once the seasonals positives are out of this market we will likely see some downside action.
Just like the fabled white knight riding to the rescue, on que the chip stocks find strength this morning. Up better than 1.25% they are the driver this morning keep the markets on a solid footing. Without them, yesterday's strength would be todays weakness. I've put out a few short positions this morning and am trailing the one chip left in our long positions but as has been the case for this week, I'm not really looking to do much into the end of year.
We have laid down very specific measures of whether you are a successful trader or not. Those measures are based on two factors; do you make money and do you outperform the averages of the indexes you trade on. By definition, if you make money in a down year, you outperform. In an up year, as this one has turned into over the past couple months, you have to outperform the averages. This year, we look to leave the year at around 15% returns and again will outperform the averages. That's what we have done each year since the start of this web site. It's has occurred in down markets (2002), up markets (2003), and now sideways markets (2004). It's a testament to the theory that active money management that centers on protecting your capital, trading the technicals and mixing in simple probabilities works.
As this year closes, I hope that this site has and continues to benefit the readers. The feedback from individuals is generally positive and I appreciate the fact that the benefits outweigh any negatives. It is at times like these, when we reflect a bit that we realize the impact that we do have. Our written words are currently read in some 23 countries by thousands of people. It's hard to fathom that the world of communications has evolved to the point that someone like myself can actually do something they truly enjoy and still have a positive impact on a number of individuals that I don't really know. I remember when I first embraced the Internet, back in it's infancy and truly didn't grasp the awesome power that was being unleashed. Back then it wasn't nearly what it is now, but it only goes to show just how far and how fast things can change. Trading is no different. The markets evolve before our eyes and though we can't order it to do what we want, we certainly can profit by it's volatility and evolution.
So, as we head into the end of this year and look forward to the best, I wish all of you the best in health and prosperity in the coming year. Hopefully we can all work together to profit into the new year as there will certainly be opportunities to do so. That's a given.
We have laid down very specific measures of whether you are a successful trader or not. Those measures are based on two factors; do you make money and do you outperform the averages of the indexes you trade on. By definition, if you make money in a down year, you outperform. In an up year, as this one has turned into over the past couple months, you have to outperform the averages. This year, we look to leave the year at around 15% returns and again will outperform the averages. That's what we have done each year since the start of this web site. It's has occurred in down markets (2002), up markets (2003), and now sideways markets (2004). It's a testament to the theory that active money management that centers on protecting your capital, trading the technicals and mixing in simple probabilities works.
As this year closes, I hope that this site has and continues to benefit the readers. The feedback from individuals is generally positive and I appreciate the fact that the benefits outweigh any negatives. It is at times like these, when we reflect a bit that we realize the impact that we do have. Our written words are currently read in some 23 countries by thousands of people. It's hard to fathom that the world of communications has evolved to the point that someone like myself can actually do something they truly enjoy and still have a positive impact on a number of individuals that I don't really know. I remember when I first embraced the Internet, back in it's infancy and truly didn't grasp the awesome power that was being unleashed. Back then it wasn't nearly what it is now, but it only goes to show just how far and how fast things can change. Trading is no different. The markets evolve before our eyes and though we can't order it to do what we want, we certainly can profit by it's volatility and evolution.
So, as we head into the end of this year and look forward to the best, I wish all of you the best in health and prosperity in the coming year. Hopefully we can all work together to profit into the new year as there will certainly be opportunities to do so. That's a given.
Looks like the zig is in store today. Zig down Monday, zag up Tuesday, now zig down again on Wednesday. Still the oil inventory report to hit soon and that could zig or zag. Really though, the early positives are outweighed by negatives. I shorted a bit more on strength and have taken a little more of the long off the table. Playing very small here though.
So yesterdays strength cancels Mondays weakness and we continue to grind with positive momentum and a year end fast approaching. Unless you are willing to set your sites on pockets of momentum and chase them with short time frames, this market offers a lot of nothing right now. There are pressures on both sides of the tape to keep it from going up too much or down the same. Until end of year, that is likely to remain.
We get the oil inventory numbers today and that could provide some movement for a while. Same with housing numbers. Other than that, it's gonna likely be quite again. Looking forward, the earnings reports start to hit the street the second week of January. My work suggests selling pressure should start to materialize sometime the first week of January for a corrective phase. I believe we are at a juncture where a more deep correction should occur, one that takes us back enough to worry those long. I don't want to be holding a lot of inventory into that situation and thus have chosen to end this year quite flat with a slight negative leaning at the moment. It's anticipatory stance and we may have started it a bit too early as the first days of January are usually pretty positive. If we get some weakness the remainder of this week then we can pick up a few issues to correct the current bias. For now our mantra remains to sell strength and buy weakness all at a moderate pace staying mostly in cash.
We get the oil inventory numbers today and that could provide some movement for a while. Same with housing numbers. Other than that, it's gonna likely be quite again. Looking forward, the earnings reports start to hit the street the second week of January. My work suggests selling pressure should start to materialize sometime the first week of January for a corrective phase. I believe we are at a juncture where a more deep correction should occur, one that takes us back enough to worry those long. I don't want to be holding a lot of inventory into that situation and thus have chosen to end this year quite flat with a slight negative leaning at the moment. It's anticipatory stance and we may have started it a bit too early as the first days of January are usually pretty positive. If we get some weakness the remainder of this week then we can pick up a few issues to correct the current bias. For now our mantra remains to sell strength and buy weakness all at a moderate pace staying mostly in cash.
Tuesday, December 28, 2004
I'm calling it a day a bit early here. Nothing really to hang around for as I've been semi-comatose most of the day anyway. The late strength is still hanging in there and although we are net short at this point, I don't have a strong leaning to the short side (read that I don't believe the market heads significantly lower this week).
Instead, we are simply working individual charts and keeping risk to a minimum as we end the year. Booking gains or trimming profits on strength and selling short into the same strength but all of it at a very moderate rate. The desire is to keep a little on both sides of the table coming into January but to start looking for a real correction finally as the new year gets underway.
Have a great evening and see you back here tomorrow. Maybe we will catch a good trade or two come morning.
Instead, we are simply working individual charts and keeping risk to a minimum as we end the year. Booking gains or trimming profits on strength and selling short into the same strength but all of it at a very moderate rate. The desire is to keep a little on both sides of the table coming into January but to start looking for a real correction finally as the new year gets underway.
Have a great evening and see you back here tomorrow. Maybe we will catch a good trade or two come morning.
A slow day today and a slow week most likely gives one time to pursue other activities now that we have moved mostly to cash. I've been enjoying my kids today; shooting hoops, playing some backgammon, etc. One of the benefits of trading is that you can work from anywhere and work your own hours. Given the setups today, I'm not inclined to do a lot. If you want to chase momentum, you can as there are a lot of gunners still out there. If you are mostly in cash and protecting at this point, then enjoy some of the wonderful opportunities that life affords you and wait for a better point to deploy your capital.
Market looks to be setting up for a decent finish today. I'm net short at this point, but mostly in cash as I've alluded to above.
Market looks to be setting up for a decent finish today. I'm net short at this point, but mostly in cash as I've alluded to above.
The market has that swagger about it today but I'm sorry, I can't get too enthusiastic about anything right here. I've been paring the long holdings further on the strength and raising cash. I'm suspicious of any move in this holiday trading environment and am also concerned that a number of the drivers of this run are about to expire. We will sit in cash for the most part, just picking at a few trades here and there but nothing of substance.
By the way, those Internet plays were duds and as a consequence, we've dumped them and moved on.
By the way, those Internet plays were duds and as a consequence, we've dumped them and moved on.
Consumer confidence numbers gave the market some confidence and we traded up quickly as a result. I continue to believe that all this up and down is pretty random and you are best off to slowly sell into strength or short and to buy weakness or cover. All of this is said with the idea of keeping it small. I've done precious little today and expect that to remain the mantra for the remainder of the week. Gains to protect at the moment and I'll sit comfortably in cash for the most part. No reason to make any big bets here. If we do, it'll be on a short intraday leash.
The flip side of the AMZN short is to embrace this Internet strength while it lasts and look to buy a name or two. I've spent some time this morning looking for setups and have taken on some small positions in a couple names in that group. Take a look at RETK and CMGI. Also DSCM although I couldn't get any at a decent price early.
The early strength is to be questioned again. The chips are weak again and unless they turn it's likely this will fizzle quickly.
I continue to keep risk low. The metals behavior is questionable here and that rising wedge looks bearish so I've stepped away from them as well.
The early strength is to be questioned again. The chips are weak again and unless they turn it's likely this will fizzle quickly.
I continue to keep risk low. The metals behavior is questionable here and that rising wedge looks bearish so I've stepped away from them as well.
Yesterday we attempted to work a quick trade on AMZN. One thing that isn't always clear in posts here and elsewhere is the time frame. Each trade has it's own time frame. A trade to short AMZN was based on a short time frame. Just as the buy on VISG yesterday morning pre-opening had a very short time frame, the AMZN short was the same idea. You get in at what appears to be an extreme and you attempt to catch a few quick points on the trade and get out. You don't hang around looking for more than is there.
This morning AMZN catches an upgrade and they are off to the races again. Looking back at that chart from yesterday, the next logical resistance area is the $44.5 to $45 region. Consider the fact that AMZN will have tacked on some 16% or more in two days to get to this area and it doesn't take a genius to realize that the rubber band is being stretched. I'll be watching this stock again today as the risk/reward is getting better for a quick counter trade.
This morning AMZN catches an upgrade and they are off to the races again. Looking back at that chart from yesterday, the next logical resistance area is the $44.5 to $45 region. Consider the fact that AMZN will have tacked on some 16% or more in two days to get to this area and it doesn't take a genius to realize that the rubber band is being stretched. I'll be watching this stock again today as the risk/reward is getting better for a quick counter trade.
Futures are firm this morning after a late day swoon yesterday. As we have said before, it's hard to make much sense of volume tells at this stage of the game as the holiday trading distorts those reads too much. That said, yesterday's volume was roughly equal to Friday's and unless we see a volume spike on an up day, the suggestion is that we are just having slow spiky holiday trading and nothing more ... yet.
Yesterday we began to lighten up our long positions in order to position ourselves for what we expect to be a weaker early January than normal. It's not wise to give up on the long side, and we don't expect to do so until we get a better read suggesting such, in fact, we would and likely will buy back some shares we let go on further weakness here. It's very much two-sided trading right now where we should sell into strength and buy weakness.
Unless you intend to chase the momentum trades, it's likely to be a slow somewhat random set of trading so the best bet is to stay out of trouble and limp out of this year with the gains you already have.
Yesterday we began to lighten up our long positions in order to position ourselves for what we expect to be a weaker early January than normal. It's not wise to give up on the long side, and we don't expect to do so until we get a better read suggesting such, in fact, we would and likely will buy back some shares we let go on further weakness here. It's very much two-sided trading right now where we should sell into strength and buy weakness.
Unless you intend to chase the momentum trades, it's likely to be a slow somewhat random set of trading so the best bet is to stay out of trouble and limp out of this year with the gains you already have.
Monday, December 27, 2004
Well, the market provided another intraday leg down into the close today as the late attempted rally couldn't hold. I got a little fancy with my AMZN looking to cover for a small profit and reopen the short a bit higher. Ends up not having anything short there anymore as the late day swoon affected it's price as well. In fact, it's trading after hours right about where I wanted to cover for a quick trade on the intraday charts. So it goes. We can explore it again tomorrow as it's likely to spike back up to test today's highs at the least.
Overall the market had a bad smell to it today and we steadily raised cash all day as a result. Sometimes there's good reason to make a stand and other times it makes much more sense to fold up the tent and wait for a while. As I said earlier, I don't expect a sharp drop that holds into the end of year, but this market has moved a long way since August and there's a backdrop of evidence that suggests the sledding is about to get rougher. Unless you have an edge that I don't see, I'd play it safe for now.
Overall the market had a bad smell to it today and we steadily raised cash all day as a result. Sometimes there's good reason to make a stand and other times it makes much more sense to fold up the tent and wait for a while. As I said earlier, I don't expect a sharp drop that holds into the end of year, but this market has moved a long way since August and there's a backdrop of evidence that suggests the sledding is about to get rougher. Unless you have an edge that I don't see, I'd play it safe for now.
Earlier I was talking of backing away from most risk and just looking for short term setups based on spike or pullbacks. Here's an example of what I'm talking of. Take a look at an AMZN chart today. It has a history of high beta volatility squeezes such as what's taking place today. It has squeezed right up to resistance on a daily chart. This is a short term trade looking for some sort of pullback off this resistance area today or sometime in the next day or two.
We are finally starting to see real signs of a stall at these levels. With crude oil trading down $3 a barrel and the market not rallying, either the connection between lower crude and higher stock markets is finally broken or we have divergence. I believe it's the latter.
I have sold down my holdings steadily all day; partly to protect against risk into the end of year and partly because the top of this latest run feels near. It's hard too imagine a sharp pullback that sticks into the end of year but the market never ceases to amaze so don't count anything out. Better safe than sorry my momma used to say.
I have sold down my holdings steadily all day; partly to protect against risk into the end of year and partly because the top of this latest run feels near. It's hard too imagine a sharp pullback that sticks into the end of year but the market never ceases to amaze so don't count anything out. Better safe than sorry my momma used to say.
We have been more aggressive in reducing our long holdings today than I anticipated coming into the day. I don't like the way the market is trading today and am unwilling to carry too much risk into the end of year. I'd much rather keep the cash levels higher and look to trade around spike and pullbacks that occur intraday as the thin volume should provide that opportunity this week. We are down to roughly 30% long, 8% short and the rest cash at this moment.
The market took a quick dump after we noticed the real struggle taking place. This thin holiday trading can give nasty surprises and you have to keep your emotions in check as best you can. We have taken a few profits this morning and are unwilling to make any big bets into year end. We have had another successful trading year based on our definition of success and don't intend to do anything goofy into year end.
Although we clearly still have positive vibes in this market, the difficulty with prices climbing higher and higher is starting to be felt. I'm watching long positions carefully and looking to trim here and there as this week unfolds. The mo-mo boards continue to hop though so it's too early to pull in the horns just yet.
I've made some purchases this morning but not a lot. Just jettisoned that VISG trade into the early bounce strength. We'll see how it works from here. Still not finding any news on the reason for such a fall.
I've also added a couple more short positions as we slowly position for next week and the expect pullback again.
I've also added a couple more short positions as we slowly position for next week and the expect pullback again.
The mo-mo crowd is starting early today as the stock board I keep on momentum stocks is plastered green early. Stocks like ROXI, EYET, NVDA, EGHT, STEMP, BUTL, etc. all are showing 2 and 3% and greater gains pre-opening. Looks like a full court press to start the day in this group.
I've been trying to nibble at NEM and PAAS again pre-opening and did pick up some VISG that's down some 10% on news pre-opening. Big run up there last week which we got a piece of an exited Friday. Looks like the market makers playing games early. We will see.
I've been trying to nibble at NEM and PAAS again pre-opening and did pick up some VISG that's down some 10% on news pre-opening. Big run up there last week which we got a piece of an exited Friday. Looks like the market makers playing games early. We will see.
We continue along in the twilight zone of trading where reality and fantasy meet and no one is sure which is which and who is who.
Futures point to a higher market with oil dropping over a dollar a barrel and retail sales being touted as generally stronger than expected. What we really face is that feel good momentum again this week on lower volume; the last full week of feel good stage before the new year begins and earnings began to roll out and about.
My concerns have been growing lately and though I've learned over the years that you don't stand in front of a train unless it shows signs of stopping and reversing, I also have learned that you don't try to ride it right up until the supposed last stop either. Sometimes it just doesn't make it to the last advertised stop.
The Santa Claus rally was supported by a short term oversold condition that has just about ran it's course. Although volume is hard to read at this time of the year, the signals of late have not been encouraging. The tide appears to be turning and it won't likely take long once the new year arrives to see some sort of pullback develop.
Until then, we continue to work the long side mostly and grow more defensive as that time arrives. This week will be all about finding and taking on a few more select short positions and attempting to work the long side further.
Short term, I still like the metals at this juncture although they are more of an in and out trade rather than an outright hold as the pattern could easily be interpreted as a bearish wedge. So far the metals stocks have not embraced the bullion that continues to trade higher (gold and silver).
We abandoned the oils and they will likely be of interest again if they can come back in on this commodities recent weakness. They are putting some decent bases together and we may have acted to quickly to cut them all loose on that big inventory drop last week. Don't believe we should chase them here though.
Elsewhere, I've been taking on lower beta stocks like some banks which are showing nice breakout patterns. Just looking to capture some points on lower volatility stocks with respect to those we hold overnight.
All in all, the time is coming where we need to be a bit more careful and keep the time frames short. This week will likely see continued choppy trading and it's not wise to get yourself to heavily invested in anything in a low volume stock. The volatility squeeze could ruin your holiday spirit.
Futures point to a higher market with oil dropping over a dollar a barrel and retail sales being touted as generally stronger than expected. What we really face is that feel good momentum again this week on lower volume; the last full week of feel good stage before the new year begins and earnings began to roll out and about.
My concerns have been growing lately and though I've learned over the years that you don't stand in front of a train unless it shows signs of stopping and reversing, I also have learned that you don't try to ride it right up until the supposed last stop either. Sometimes it just doesn't make it to the last advertised stop.
The Santa Claus rally was supported by a short term oversold condition that has just about ran it's course. Although volume is hard to read at this time of the year, the signals of late have not been encouraging. The tide appears to be turning and it won't likely take long once the new year arrives to see some sort of pullback develop.
Until then, we continue to work the long side mostly and grow more defensive as that time arrives. This week will be all about finding and taking on a few more select short positions and attempting to work the long side further.
Short term, I still like the metals at this juncture although they are more of an in and out trade rather than an outright hold as the pattern could easily be interpreted as a bearish wedge. So far the metals stocks have not embraced the bullion that continues to trade higher (gold and silver).
We abandoned the oils and they will likely be of interest again if they can come back in on this commodities recent weakness. They are putting some decent bases together and we may have acted to quickly to cut them all loose on that big inventory drop last week. Don't believe we should chase them here though.
Elsewhere, I've been taking on lower beta stocks like some banks which are showing nice breakout patterns. Just looking to capture some points on lower volatility stocks with respect to those we hold overnight.
All in all, the time is coming where we need to be a bit more careful and keep the time frames short. This week will likely see continued choppy trading and it's not wise to get yourself to heavily invested in anything in a low volume stock. The volatility squeeze could ruin your holiday spirit.
Thursday, December 23, 2004
With the day winding down and volume tailing way off, the randomness is likely to increase. I'm sticking a few sell orders out there in case you get those goofy blips higher and will see if we can cherry pick anything. Other than that, we are pretty much through here.
I did start a couple short positions and have sold down the longs some today. There's likely one more good week of upward bias that should protect the downside but after that, it's not nearly as likely in my books. We need to start preparing for that thought.
I'm signing off early here today. Have a Merry Christmas wherever you may be. Enjoy those you love today, not tomorrow and thanks so very much for your continued support as many of you continue to do so; some in more than one of the ways that are possible.
I did start a couple short positions and have sold down the longs some today. There's likely one more good week of upward bias that should protect the downside but after that, it's not nearly as likely in my books. We need to start preparing for that thought.
I'm signing off early here today. Have a Merry Christmas wherever you may be. Enjoy those you love today, not tomorrow and thanks so very much for your continued support as many of you continue to do so; some in more than one of the ways that are possible.
With the day winding down and volume tailing way off, the randomness is likely to increase. I'm sticking a few sell orders out there in case you get those goofy blips higher and will see if we can cherry pick anything. Other than that, we are pretty much through here.
I did start a couple short positions and have sold down the longs some today. There's likely one more good week of upward bias that should protect the downside but after that, it's not nearly as likely in my books. We need to start preparing for that thought.
I'm signing off early here today. Have a Merry Christmas wherever you may be. Enjoy those you love today, not tomorrow and thanks so very much for your continued support as many of you continue to do so; some in more than one of the ways that are possible.
I did start a couple short positions and have sold down the longs some today. There's likely one more good week of upward bias that should protect the downside but after that, it's not nearly as likely in my books. We need to start preparing for that thought.
I'm signing off early here today. Have a Merry Christmas wherever you may be. Enjoy those you love today, not tomorrow and thanks so very much for your continued support as many of you continue to do so; some in more than one of the ways that are possible.
The markets have been steadily selling back down after the early bump higher but given the time of the year it is, I would expect some buying to materialize before we are done today. The trading is somewhat random though and for a portfolio like ours, that can complicate things as some of our stocks are fairly thinly traded and the moves can be outsized as a result. Such conditions remind you of the fact that you need to steady yourself and not assume to much risk is these stocks as they will make you pay otherwise. If there's one New Years resolution for us to work on, it's to develop a little more tolerance for these small caps stocks volatility factors and to use the volatility more to our advantage than disadvantage which we have been guilty of in the past.
It was a pretty ugly start to the day in our portfolio and we are doing our best to do as little as possible today. We did add some metals back on in NEM and PAAS as the charts look like they could finally be finding their footing. Yesterday I was afraid that they were ready to break down and backed away but it appears that they may be ready finally and I've taken a decent sized stake as a result.
The general market has that look about it as if it's determined to move higher regardless. That's good as we are still reasonably long.
The general market has that look about it as if it's determined to move higher regardless. That's good as we are still reasonably long.
With today marking the final trading day before Christmas, expect a bustle of activity and really choppy trading as the participants dwindle and the volume thins. It's one of those days that you really want to be careful to not do too much as green can turn to red in a hurry.
The more I look at these indexes and the way they are performing, the more concerned I'm becoming that once the holiday cheer wears off, we could finally get that significant retracement that has failed to materialize for so long. I've began concentrating on finding some short positions plays and am monitoring when to put those plays into work. My thinking up until this week was the second or third week of the new year. Now I'm thinking the second or third trading day of the new year. I will be putting another longer article out in Naked Trades soon detailing the thoughts.
That thought pattern leads me to consider the fact that I'm not looking to add much more but instead to concentrate on working what we have on the sheets more so than looking for new names. That will likely be the way we work this through years end.
Lots of economic data due up shortly. The opening will likely be affected by that barrage.
The more I look at these indexes and the way they are performing, the more concerned I'm becoming that once the holiday cheer wears off, we could finally get that significant retracement that has failed to materialize for so long. I've began concentrating on finding some short positions plays and am monitoring when to put those plays into work. My thinking up until this week was the second or third week of the new year. Now I'm thinking the second or third trading day of the new year. I will be putting another longer article out in Naked Trades soon detailing the thoughts.
That thought pattern leads me to consider the fact that I'm not looking to add much more but instead to concentrate on working what we have on the sheets more so than looking for new names. That will likely be the way we work this through years end.
Lots of economic data due up shortly. The opening will likely be affected by that barrage.
Wednesday, December 22, 2004
It was one of those days to day. The general indexes continued to move higher, especially the listed issues. They helped to drag the NASDAQ up to resistance. Our personal plight was not as well as we were heavy in the oils and the early inventory numbers walloped that group. Sometimes it's that way. You have a good situation in place, you call what appear to be the right plays, but you lose yardage. So you pick yourself up, head back to the huddle and do it again.
After the bell we have some blowups in tech and some ok numbers as well. UTEK, a small holding looks to be a blowup. When this happens, I rather quick to dump it and move on. That's one of the reasons we spread our bets and try not to play too heavily in one single issues. Even having lots of smaller issues that are in one sector can hurt as well like the oils did earlier today.
I'm out of here. See you tomorrow where we get the last day of trading before Christmas in. Volumes will likely thin and will be even more choppy than what we saw today.
After the bell we have some blowups in tech and some ok numbers as well. UTEK, a small holding looks to be a blowup. When this happens, I rather quick to dump it and move on. That's one of the reasons we spread our bets and try not to play too heavily in one single issues. Even having lots of smaller issues that are in one sector can hurt as well like the oils did earlier today.
I'm out of here. See you tomorrow where we get the last day of trading before Christmas in. Volumes will likely thin and will be even more choppy than what we saw today.
There are days and then there are d ... a ... y ... s! Today is one of those. We make a good play over here and a fumble over there. So it goes.
On a day like today, I keep working just as I always do but it's not always as productive as you wish. Still, you know that if you keep working the boards sooner or later things will click and some good trades will be made.
The overall positive position of the market continues and we continue to work strictly long as a result. If it weren't for the seasonals I would be more worried, but right now they favor higher prices and with breakouts in the DJIA and the SPX, it's hard to do anything but work the long side still. Tech continues to lag in general and, given our thesis, that's probably a good sign.
On a day like today, I keep working just as I always do but it's not always as productive as you wish. Still, you know that if you keep working the boards sooner or later things will click and some good trades will be made.
The overall positive position of the market continues and we continue to work strictly long as a result. If it weren't for the seasonals I would be more worried, but right now they favor higher prices and with breakouts in the DJIA and the SPX, it's hard to do anything but work the long side still. Tech continues to lag in general and, given our thesis, that's probably a good sign.
Today the word is to stay out of the basic materials, the metals, the mining, the oils, etc. Two days ago, the world look to be embracing them again. This quick rotation in and out of sectors cuts to the bone. If you aren't booking gains as you go, you end up facing a reasonably large whole to climb out of ... especially if you are late to the move.
That's just the way it is right now and as we continue this move higher, it's likely to become even more so. Just a reminder to myself and you that we have to book as we go here ... not wait for the big payoff. That's the second reminder in a week!
The general market outside of the above is doing well. Breadth is good, volume is good comparatively and the positive tone remains. I don't see oil being able to make a comeback anytime soon and that bodes well for the rest of the market. We have our sleeves rolled up now and are looking to try and book a few gains before the bell rings as we work a few issues with a big larger size.
That's just the way it is right now and as we continue this move higher, it's likely to become even more so. Just a reminder to myself and you that we have to book as we go here ... not wait for the big payoff. That's the second reminder in a week!
The general market outside of the above is doing well. Breadth is good, volume is good comparatively and the positive tone remains. I don't see oil being able to make a comeback anytime soon and that bodes well for the rest of the market. We have our sleeves rolled up now and are looking to try and book a few gains before the bell rings as we work a few issues with a big larger size.
It's been a frustrating busy day so far with the indexes breaking to new highs but one sector we had put a lot of effort and money into, the oils, getting whacked. We had to dump almost everything in that sector as a result; shoot first and ask questions later. Now we focus where the market is favorable instead and look to take advantage of the momentum that the oil slick has created.
We were ran out of most of our oil positions outside the integrated stocks on that oil inventory number a half hour back. Sweeping drop in that commodity has lit a fire under the stock market for now.
Today doesn't have the same feel as yesterday but it still feels positive here as the momentum is hard to deny. I had a lot of orders on the table early to see if I could pick up any strays early but am pulling most now and concentrating primarily on what's on the table.
Something that we have said in the past and that bears repeating is that the largest amounts of profits and losses occur near the end of runs, be they bullish or bearish. In other words, at the turning points is when you see the greatest opportunity. Recognize that this doesn't have to be interpreted as the end of a major move. It could be an interim move or even the minor move.
Now that the problem with that statement is that you can both win or lose or even win and lose. Naturally, the wise guy (or lucky) wins and wins. I suspect we are nearing the end of an interim move here and the task at hand is to do our best to win/win. Because the move has been up, we are almost fully invested and trying to squeeze as much performance as we can out of the move. As we near the end of the year, we have to recognize that all good things come to an end and so will this move. We have to be especially dilligent to look for subtle signs that tell us that this is about to happen. Breaks of trend lines. Volume characteristic changes. Sentiment. Seasonals. You name, there is plenty to look at and for.
Now the real question you must be wondering or asking is when? Is it now? Two weeks from now? Two months?
Predicting the future is not really the strength of technical anaylsis as much as TA allows you the lower risk opportunity to stay one step ahead of what is coming down the pipe. Right now, there are small signs that we could be peaking but with the breakout on the DJIA, and the SPX and NASDAQ rubbing up against resistance breakout levels again for the move, unless we see a lack of follow through, a pick up of volume again on one or more down days, it's hard to believe it's happening right now. My prediction would be a week or two into January, but we'll have to evaluate that when the time comes. For now we play it day by day and continue to move like a butterfly and sting like a bee.
Now that the problem with that statement is that you can both win or lose or even win and lose. Naturally, the wise guy (or lucky) wins and wins. I suspect we are nearing the end of an interim move here and the task at hand is to do our best to win/win. Because the move has been up, we are almost fully invested and trying to squeeze as much performance as we can out of the move. As we near the end of the year, we have to recognize that all good things come to an end and so will this move. We have to be especially dilligent to look for subtle signs that tell us that this is about to happen. Breaks of trend lines. Volume characteristic changes. Sentiment. Seasonals. You name, there is plenty to look at and for.
Now the real question you must be wondering or asking is when? Is it now? Two weeks from now? Two months?
Predicting the future is not really the strength of technical anaylsis as much as TA allows you the lower risk opportunity to stay one step ahead of what is coming down the pipe. Right now, there are small signs that we could be peaking but with the breakout on the DJIA, and the SPX and NASDAQ rubbing up against resistance breakout levels again for the move, unless we see a lack of follow through, a pick up of volume again on one or more down days, it's hard to believe it's happening right now. My prediction would be a week or two into January, but we'll have to evaluate that when the time comes. For now we play it day by day and continue to move like a butterfly and sting like a bee.
Tuesday, December 21, 2004
After some fits and starts the past few days, Santa did decide to head back to Wall Street and brought good cheer along with him. It was clear from the early tone that today had a good shot at being a trend day higher. The strength in technology was key as well as the general underlying positive internals.
We jostled between a few positions today having to reduce some exposure where things were not acting well but adding exposure elsewhere. Towards the end of the day we began booking some partial gains as well. For the most part though, we continue to lean quite long here believing that this market is interested a push towards the end of the year as the momentum continues to be the story. If we see some technology follow through now we will indeed get a pull higher into the new year.
Hoped you were able to knock out a few good trades today. With but two days remaining in the week and but a week after that remaining in the year, the bulls reasserted control today and look to be taking no prisoners.
We jostled between a few positions today having to reduce some exposure where things were not acting well but adding exposure elsewhere. Towards the end of the day we began booking some partial gains as well. For the most part though, we continue to lean quite long here believing that this market is interested a push towards the end of the year as the momentum continues to be the story. If we see some technology follow through now we will indeed get a pull higher into the new year.
Hoped you were able to knock out a few good trades today. With but two days remaining in the week and but a week after that remaining in the year, the bulls reasserted control today and look to be taking no prisoners.
Our patience with this market is finally yielding some dividends. This time I'm starting to put some stops under some of the higher flying ones to capture some partial takes if we begin to falter. The mo-mo folks are busy today running up the price in a number of small stocks. They are a pretty good tell on how much momentum the market has. When they are active, the momentum builds and begins to show through many shares, not just the high flyers.
Now that the listed issues are bumping back up against their previous highs on the DJIA and over 1200 again on the SPX, we'll have to see if this move can muster more adherents. The NASDAQ holds the keys I suspect and my attention continues to be centered on what it wants to do. If it does catch a move towards higher highs, we will most likely see new highs in the listed issues as a result.
With less than an hour to go, the underlying strength is good and I've continued to stay long on the whole although we have removed and added names as the market dictated. If tomorrow brings follow through finally we indeed will have that fabled Santa Claus rally afterall.
Now that the listed issues are bumping back up against their previous highs on the DJIA and over 1200 again on the SPX, we'll have to see if this move can muster more adherents. The NASDAQ holds the keys I suspect and my attention continues to be centered on what it wants to do. If it does catch a move towards higher highs, we will most likely see new highs in the listed issues as a result.
With less than an hour to go, the underlying strength is good and I've continued to stay long on the whole although we have removed and added names as the market dictated. If tomorrow brings follow through finally we indeed will have that fabled Santa Claus rally afterall.
Despite some good underlying statistics, I've been forced to reduce some holding as the stocks are not acting well. We have to recognize that anything can happen and though we believe another move higher is still in the cards, it's the last move we are looking for rather than just the start of another series. When you get towards the end of a move, you have to be a bit more careful and a bit more determined to cut things loose quicker. That's the nature of the game.
We are seeing strength in the basic commodities related stocks and technology. Most underlying indexes are positive save utilities and internet related issues. We are trying to stay as long as possible here looking for the anticipated year end rally to develop.
We are seeing strength in the basic commodities related stocks and technology. Most underlying indexes are positive save utilities and internet related issues. We are trying to stay as long as possible here looking for the anticipated year end rally to develop.
The early tone is positive. A little pullback here off the early enthusiasm is met with some buying. That's not what we have seen lately.
This morning looks to be a positive opening again. Lately that hasn't meant much but I suspect the momentum folks are itching to get it going again into the holidays. INTC catches another upgrade as they did yesterday. We'll see if it holds today. We bought some yesterday expecting a march back towards $25. The SMH could buoy this market and get the last of the bears to capitulate. I've been looking for as much for a while now and believe that will likely be the signal that interim top is near. At least that's the thesis I've been running with for a while now.
Strap on your helmets as I expect there to be some volatility today. If there is going to be a year end run, it likely starts today; tomorrow at the latest.
Strap on your helmets as I expect there to be some volatility today. If there is going to be a year end run, it likely starts today; tomorrow at the latest.
Monday, December 20, 2004
With the third straight day of selling pressure evident, the indexes held pretty well again. There will come a time in the not to distant future where support or resistance levels will be tested and potentially break, but so far, the moderate selling pressure isn't creating any intensity in selling, more like a buyers strike.
This morning we saw some run and gun action as the momentum boys looked to get the market hiked higher. I was watching action in the names like ATVI, ISSI, VIRL, STTS, STTI, NGEN, etc. For the most part, the push was higher earlier and it looked to have a rosy color to the rise. When the follow through failed to materialize though, we got that slow drift lower and finished the day flat lined.
It's too early to suggest the worst is over or that the best is yet to come but the bias remains higher and I've been careful to continually booking partials both for profits and risk containment as this market mulls around. The key part is that we continue to leave significant long positions in place looking for that Santa Claus rally to materialize with gusto and push us significantly higher in the issues we are carrying. Whether we get what we want remains to be seen, but leaning long here continues to be the way to play this market at this juncture.
This morning we saw some run and gun action as the momentum boys looked to get the market hiked higher. I was watching action in the names like ATVI, ISSI, VIRL, STTS, STTI, NGEN, etc. For the most part, the push was higher earlier and it looked to have a rosy color to the rise. When the follow through failed to materialize though, we got that slow drift lower and finished the day flat lined.
It's too early to suggest the worst is over or that the best is yet to come but the bias remains higher and I've been careful to continually booking partials both for profits and risk containment as this market mulls around. The key part is that we continue to leave significant long positions in place looking for that Santa Claus rally to materialize with gusto and push us significantly higher in the issues we are carrying. Whether we get what we want remains to be seen, but leaning long here continues to be the way to play this market at this juncture.