Online Stock Trading

Stop Calling for a Bottom

Posted on October 26, 2008
Filed Under Market Commentary | 3 Comments

A watched pot never boils.

Stock Market Pundits continue to make “bottom calls” and continue to be DEAD wrong.  The constant watch for a “bottom” will prolong the time table for our stock market bottom.  While the USA will surely suffer more losses, but what will be devistating is the fall of exports coming out of China.  The USA has outsourced its consumer recessionary manufacturing, in essence smothering what potentially could be devistating effects of a declining economy.  So as the “bottom callers” continue to be wrong, the stock market will continue to discount the declining world economy.

At this point in time the market significantly lacks the type of leadership you need to see in order to sustain any sort of uptrend.  Without leadership all secondary indicators like put/call, NH vs. NL, and VIX/VXN.   Even now, these secondary indicators have yet to line up to suggest an uptrend is headed our way.

I’ll reiterate my statement on Friday:  This market remains TOXIC.

MS

This Market is Toxic

Posted on October 24, 2008
Filed Under Market Commentary | 1 Comment

Just stay away from this market, it is sick.  We are not even close to having anything of substance to grab any sort of huge winners.  More to come this weekend, but there is only so many ways I can say Cash is King.

Tread Carefully.

MS

Volume Rises for the Second Straight Day as Stocks Fall Further

Posted on October 22, 2008
Filed Under Market Commentary | 1 Comment

For the second straight day stocks end in the red on higher volume.  Back to back distribution days spell trouble for this market.  Last Thursday’s Follow-Through day was weak at best, failing to close at the rally’s high and lack of new leadership was the key in spotting this faulty follow-through.  This market is not lending itself any huge winners, it simply is for those who want to gamble and trade intraday.  Day Traders love volitility, but for those who studied stocks that run 300%, 500%, 1000% or more know that this isn’t the time for those types of stocks.  The stock market is going to continue to suffer losses and force market participants to give up and we’ll see our bottom.

In the face of an ugly market its best to stay on the sidelines.  When the odds are against you, its best to step aside.

Best of luck

Market Speculator

Stocks Finish on the Highs of the Day but Volume Lacks

Posted on October 20, 2008
Filed Under Market Commentary | 1 Comment

There are two aspects of the market that I pay very close attention to:  Price and Volume.  Both tell a story and both are very important to this speculator.  Today’s market certainly saw a bullish move, finishing off the day on its highs.  However, a sign of misfortune for the market was the inability for insititutional players to step up and support the move.  Volume finished lower by 30% or more across the board suggesting the buying was enemic.  This market is far from being the type of market I want to be in.  For the trader that needs repeatable action, this market is for you.  However,  the more patient trader (non-day trader) I am going to wait until the market provides a better opportunity to buy stocks.

The reason I do not day trade is because I am not personally built to trade the way a day trader operates.  I for one, do not need “action” every second of the day.  Understanding the way you operate is the number key to operate successfully in the market.  AAII proved that the CANSLIM method was highly effective and Gil Morales showed the method to be powerful after racking more than 10,000% returns from 1998-2005.  Many are out there trying to find the bottom here and the most successful strategies show that picking bottoms is not important. 

The collapse of the VIX and Put/Call ratio today shows that there is relatively no fear in the market.  Preliminary data shows there were only 8 New Highs while there was 113 New Lows notched today.  This isn’t the type of readings you would want to see beginning a new bull market.  Even with the Follow-Through Day this market is very weak and is beign avoided on my side as I sit and wait for the right opportunity to get long.

Enjoy

Market Speculator

No Positions

Stocks Get Follow-Through but End the Week Sluggish

Posted on October 18, 2008
Filed Under Market Commentary | 3 Comments

Thursday marked Day 5 for the NASDAQ’s attempted rally, it finished with a follow-through day.  There is much excitement that came with Thursday as news out of Omaha citing Buffet was buying American stocks that morning.  For all the excitement the market only saw 8 new highs; not exactly the type of strength you need to see for a follow-through to be successful.  This week was a day trader’s dream environment, but being able to trade consistently year in and year out as a day trader is next to impossible.  Jesse Livermore recognized this and turned to building longer term positions catching 1,000% or more in gains.  Sadly, our market is not setting us up for any of these winners.  It will continue to be be choppy and whippy and geared towards those who will day trade.

This market will not change it’s stripes any time soon.  It is best to study the past big winners and learn how they setup, run, and top.  I feel this is the only way to prepare for the next great bull market run.

If this market turns, has great leadership and accumulation I will simply change my tune.  In the meantime, its the sidelines for me.

Enjoy

Market Speculator

Stocks Are Showing Their True Colors

Posted on October 15, 2008
Filed Under Market Commentary | 1 Comment

Cash continues to be King

I can not imagine what it would be like if I bought after Monday’s market session.  However, I know stock market history and during bear markets you will see the largest percentage gains.  January 3, 2001 the NASDAQ gained 14.17% and 3 months later the market was down more than 30%.  This illustrates the point that although the market had a huge one day gain it is not the time to jump in.   The market today showed it is continuing the process of working out the deleveraging and pricing in an Obama presidency.

At the moment the Earnings on the S&P500 is at $52, Earnings Estimates for next year $60.  Historically, the price to earnings ratio on the S&P500 is around 12.00.  This pins the S&P500 at roughtly 720, almost 200 points from where we are now.  I am not one to be a foundamentalist but this argues the point that the leverage that was in the system has propped up equity prices for far too long.

My positions remains the same, cash is king.

Market Speculator

Stocks Can Not Hold a Bounce from Extremely Oversold Conditions

Posted on October 14, 2008
Filed Under Market Commentary | 1 Comment

Once again stocks show their true colors in higher volume.  The stock market continues its extreme weakness as traders failed to keep stocks above water.  No matter what the world governments will try to do to prop up the markets they will fail.  Markets can not be helped, the natural cycles of the economy will continue to happen and there isn’t anything our government can do to fix it.  Rather than price fix, governments should stand out of the way and let true Free Markets work.  Our stock market will head lower as it works out the massive deleveraging process.

It will take considerable time to have new leadership emerge, but more importantly a new bull market.  Cash continues to be king.

Market Speculator

Welcome to a Liberal World

Posted on October 13, 2008
Filed Under News Articles | 1 Comment

Our Free Market has already been taken over by socialism…is Freedom of Speech next? 

Notice how if you do not agree with Liberals they want to attack you. They want you to believe their way is the right and only way. Sound familar? Al Qaeda wants to bring a holy war because the West is not Muslim. These terrorist will not negotiate nor accept an opposing view, its their way or death.

Let’s get back to our Constitution and remove Government in our lives. Getting back to true FREE MARKETS.

MS

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