Online Stock Trading | As Bears rejoice in victory, are we ready to “Sell in May” and go away?

As Bears rejoice in victory, are we ready to “Sell in May” and go away?


Filed Under Market Commentary |

Indexes across the board endured brutal selling pressure today with volume increasing. The NASDAQ composite taking another direct hit logged its 6th distribution day in 4 weeks. As the bears stick this feather in their cap is it possible we are just taking a breather only to go higher?

Leading stocks, those with superior growth in earnings and sales along with strong relative strength have faired quite well. I’ll point to AMZN, for our lovely IBD Forum gamers. AMZN has been highly touted by short sellers calling a top in this one. However, there is too much strength fundamentally and technically that they will be proven wrong here. The overall theme here is that we still have way too many ppl calling for a top here. Which, oddly enough never works out for the mass “newbie” trader population.

Let’s focus on the lovely new bread of “newbie” traders. Message boards are filled with “newbies” calling this market “easy” and are balloning in confidence. Festering overconfidence in traders leads to a move away from sound trading rules developed over this past century i.e. Bill O’Neil’s CANSLIM method. Straying from a method such as CANSLIM, a proven growth strategy. For example:

wpos should still be shorted on valuation, folks

pe over 100….gimme a brake !!
peg at 2.47….gimme a brake !!
market gonna crash hard…kobe say it is

if this fair game, google oughta be valued at 900dollar !!!

and

loaded up on the QIDs, market go up, I make money, the market go down I make money, lol

That sounds like the Barron’s commercial to me, lol

I am starting to invest in stocks for 2007. I am just a newbie but my goal is to beat the S&P my first year investing.

When on earth did the Stock Market care about what PEG ratio a stock had, even P/E? Land Rover is way overpriced with all its quality issues yet they never drop the price of a luxury good? Why? You have to pony up and pay for quality.

All “newbies” aside we haven’t seen a colosal breakdown in leading stocks. Normally, we would be seeing this breakdown as distribution days pile up. Although I would welcome a correction here which I have stated many times, I just think we may still have some room to go higher. Even if we head sideways until mid-June.

Aloha,
Market Speculator

marketspeculator@gmail.com

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