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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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moxie717:
This is a strange market right now because yesterdays winner is todays loser. There doesn't seem to be any continuity in any sectors because of all the cross currents where last months negative news that walloped the market doesn't have any impact today. We are being buffeted by a fast moving current so remember this is not a good time to test your ability and it is easy to lose money. Oil is up, oil is down, gold is down and now it is up, financials are recovering, wait, they're down on bad news, but last week they were up on bad news. Yesterday's best etf is today's worst. I am still 90% cash and the 10% in the market is just a frustration every day and I walk away from the computer in contempt for the way the market is in a bear trend.
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Rank: Advanced Member
Joined: 8/14/2008
Posts: 232
Location: Memphis
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stockman wrote:
This is a strange market right now because yesterdays winner is todays loser. There doesn't seem to be any continuity in any sectors because of all the cross currents where last months negative news that walloped the market doesn't have any impact today. We are being buffeted by a fast moving current so remember this is not a good time to test your ability and it is easy to lose money. Oil is up, oil is down, gold is down and now it is up, financials are recovering, wait, they're down on bad news, but last week they were up on bad news. Yesterday's best etf is today's worst. I am still 90% cash and the 10% in the market is just a frustration every day and I walk away from the computer in contempt for the way the market is in a bear trend.
stockman~I too feel frustration at the way the Market is acting these days. For many years I have been a full blown Bull. It's really hard for me to adjust to this Bear Market. I do know how to Short, but I don't like to. Now I just wait for the Dow's RSI to hit sub 30 and I buy for the Oversold Rally.
It used to be that the predictive ability of chart reading was much more reliable than it is now that Oil dominates the movements of the Indicies. Now you can have what looks to be a perfect entry on a stock according to the chart pattern and all of the Technical Indicators lining up nicely, and then Oil rallies from the open and the Market dumps. It's very frustrating. I've had a number of trades this year that had to be sold the same day I bought them because Oil messed up my entry day.
Because the Housing Sector still hasn't bottomed, and the Financial Sector has so many problems, with new ones popping up every month, I think this period of the Bear is far from over. I don't care what Jim Cramer says. He claimed last week we have seen "the bottom" on July 13th.
This chart shows two Bear flags. The first one lasted from March until May, and then look what happened after that. The Bear flag we see now is shorter, and it was a nice Oversold Rally, but I doubt if we see new highs in this pattern again. Basically, we are consolidating in a downtrend with the Bear flag chart pattern.
From what I gather watching CNBC every day, Oil has bottomed and will head back up to near $150/barrel by the end of the year. That will be one of the catalysts that send this Market lower. Who knows what kind of trouble is in store for the Financial Sector between now and then.
With Oil heading up, the Housing Sector not at a bottom yet, and the troubles in the Financial Sector, I don't see many good times for the Bulls until next year some time.
 www.market-master.net
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Rank: Newbie
Joined: 8/15/2008
Posts: 3
Location: Ontario, Canada
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Hi Stockman,
I am really impressed with your common sense approach, however I was wondering a few things. Because of my job, I can only be online until 7:30am and then I can go back online after 2:30pm.
My question is: When you find a stock in the evening, do you buy it that evening or do you wait to see what the market is doing in the first half hour for example?
Also, in using your method, I am finding too many stocks. How do you whittle away at the potential buys?
Thank you for your insight on these issues.
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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Newathis:
Thanks for your comment. I wait until morning and watch the stock, the market, what oil is doing and what the major news of the day is. From my previous comment, you should've seen that my method in this market is being buffeted and my small losses every day. Even my healthcare issues are starting to decline so my conclusion from last week is that being long right now is more risk than I am willing to take and I am going to liquidate my 10% as profitably as possible unless I start seeing some gains.
To answer your other question on picking the best of many good stocks, you want to find stocks that have the biggest percent gains in a category, are above resistance and show a step increase for the last few weeks so you would look at the graph by day and week. A stock that has one big increase for the last week are stocks I watch, but don't buy because it could be a one time news situation. Suggest you go to new highs on the main screen and after you pull them all up by clicking on one, hit charts and look for what I just described. You are looking for stocks above resistance and being in this category, they are momentum stocks. When you see the right graph, click on it and see what category it is in. There are so many treacherous categories right now so you need some judgment. Example would be airline in that if oil reverses tomorrow, you will get crushed and lose 10 to 20% in a day, I know because I have been watching the best increase categories and this is the best in the service sector. I look at the best stocks in the best categories. This worked well until all these cross currents in the bear market make the risk/reward unacceptable and my conclusion is to not be long in this market until there is some stability. I think we are entering a very tough period for investors so if you decide to use my method, I hope you make more money faster. Start with small dollars that you can lose without causing a problem and use tight stops. In my opinion, you would be better off on your schedule to buy and sell in the afternoon so you can see the news and the direction of the market. If it doesn't work, get out fast and preserve your capital until the market becomes more stable. Let me know if you have other questions.
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Rank: Newbie
Joined: 8/15/2008
Posts: 3
Location: Ontario, Canada
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I agree with you, in that if I cannot see how the market begins in the morning, I might be better off to see what I can accomplish after 2pm. I was of the impression that most of the action is in the morning, but I guess that means that most of the risk is there as well.
Thanks
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Rank: Newbie
Joined: 8/28/2008
Posts: 4
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Stockman, I enjoy reading your posts regarding your strategies, and I believe you're on to something. Also good to see you've pulled back during this most recent dip. Are you still 90% cash? If so, is the market beginning to look good to you again? What sectors, stocks? Thanks, Tom
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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Tom:
Thanks for the complement. Since I wrote my last opinion that you read, I was fed up with the inconsistencies from day to day and wild swings, I kept losing small amounts every day even in previous momentum stocks including healthcare which had been doing so well. I sold everything except a few so now 98% interest income. I have been watching daily the group screener in the top blue bar to assure myself that I was right to be out. I am looking for a continuing pattern for at least a week to a month of continuity in a sector. I was previously making big gains on not one or two stocks, but dozens in basic materials so the money was coming in faster than I could keep track of it. What I have been seeing is the sectors by day were different from the week and the week was different from the month which to me is a continuation of money switching sectors daily. If you look today after a 200 point increase, it is distorted by the large numbers, but thin trading and these gains have been followed by profit taking. I have also been watching all the stocks that were working for me since finding Finviz and they number in the hundreds and the few that are up are staying in the same price range. Even looking at the new high graphs today on the main page which was a treasure of great momentum stocks that are above resistance are one day wonders that had to have a 200 point day to get there. I am also watching the top etf's and they change every day. This weeks big gain is last weeks loss. All the great ways to use Finviz show me the same thing.
A lot of words to tell you that it looks like small gains can be had on single stocks where you get a one or two day gain and you are out. To me, small gains for a lot of work and not worth my time.
Confirmation to me that I am right is that most of the panel on Fast Money is saying get in and get out on individual stocks with your 5 or 10% gain in a few days where before they talked about categories. Tech keeps coming up on the show, but the best ones look to be bouncing off resistance so staying in a range. If I see a pattern developing where I think the money can start flowing again, I will put out an opinion like I did on healthcare when that started to get bigger. I am watching skf, double down financials and it is approaching the bottom of a channel because of the gains in the market. The pattern from here has been profit taking and the daily news is that more banks will fail and more mortgages will reset to higher interest rates so the potential to make good money is possible because it can move 10% in a day so down is just as likely as up. It moves so fast that you have to watch with tight stops.
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Rank: Newbie
Joined: 8/28/2008
Posts: 4
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Excellent post, Stockman! Kind of confirms my uneasiness about the market as well. Seems prudent to be in mostly cash for the moment. Thanks for the generosity of sharing your thoughts!
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Rank: Newbie
Joined: 10/4/2008
Posts: 1
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 216
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I am excited because it feels like the direction of the market is now firmly biased to the downside. The last few months have been up and down, bear rallies and a few down periods. No consistency where you can put your money without getting your head handed to you. The average investor in the world has now seen the President of the United States say on world television that we are in trouble. We've been told it will take weeks to months to get the bailout organized and implemented. A gift from the Fed now of lowering interest would set up the perfect scenario of a relief rally that would allow us to short the market. Remember that rallies lately have been shortened to only a few hours, but we may get one on this news that lasts a little longer.
About a month ago when I started this thread I suggested to you to consider bear market etf's. If you need help on locating these on Finviz, go to the beginning of the thread in stock tips that is titled "Looks like we are going lower". You can short individual stocks and make money, but with these etf's, you can make substantial money riding the market lower. If you had followed my suggestion, here are the top etf results for the last month::
smn +60%
sdk +43%
sij +40%
ssg +36%
There are twenty four bear etf's at 20% of higher. I told all of you the market was going lower on September 5, I explained how to research them and I suggested there was an opportunity here to get money faster. We had the opportunity to get an average return of 30% in the last month on substantial dollars invested while the whole world was screaming headlines of the markets being in trouble. I believe I have made my case to all of you that the market is going lower and events have proven me to be right. I say to all of you again that we are going
lower
and we have a major opportunity here. I am excited because if this proves to be the earnings announcements period where results are below expectations, it will be hammered on every newspaper and evening news and will reinforce the impression that the market is in trouble and it will go lower. I am excited because if the affluent clients of hedge funds keep wanting their money, the funds will continue to have to sell their stocks to get cash. I am excited and if I am right, you will be excited because I tell you, my fellow Finviz investors, we have an unbelievable opportunity to make money faster. If you agree, please join me because I have been invested in these etfs for the last 30 days.
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